Hotels With a Lifestyle Focus will Thrive in the Sharing Economy Age – and it’s not hard to see why. The “sharing-economy” philosophy has influenced new business segments such as transport and accommodation, the most prevalent of these being Uber, Lyft and AirBnB. The rise of such shared platforms for business and leisure has meant more travellers are aware of brands and the opportunities of experiencing shared spaces.
Airbnb rose to popularity as its’ founders recognized the traveling public wanted an alternative to traditional hotels. Travelers now want authentic, local, cultural experiences. They have a growing preference for unique experiences and products where authenticity trumps “standardization.” They want more space while also being part of the community. They want to pay for the things that matter most. “The impact of rising affluence, globalization and technology has led to modern hotel guests valuing experiences and the feeling of ‘being connected’ over traditional hotel luxuries,” says HVS Global Hotel Consultancy, London.
And hotels are feeling the heat. “We definitely see Airbnb as a big threat. We come across that in every single meeting we have.” Kurien Jacob, chief revenue officer of Highgate Hotels. Similarly, market research conducted by BDRC revealed that;
- 19% of US travelers used some shared accommodation site in 2014
- 44% of consumers would consider using one in the future
- 66% of millennials and 62% of Gen Xers will use shared accommodations for than once, with 51% of baby boomers becoming repeat users
- And according to Phocuswright research, seven in 10 18- to 34-year-olds took at least one leisure trip in 2014, and while they might spend slightly less annually ($3,217) than older travelers ($3,381), they do travel more on the fly.
But hoteliers are sitting up and taking notice; and some have begun responding to this consumer trend. Major chains have begun rethinking their lodging to appeal to a younger, enthusiastic traveller and have created new brands focused on creating an ambiance with a more unique and local flavor. Call it Radisson Red or Hyatt Centric, Canopy or M Social Singapore by Hilton, Moxy by Marriott, Aloft and Element by Starwood Hotels & Resorts, even Best Western, known for its budget hotels, has announced plans for a new brand called GLo. There are even new independent hotels opening to cater to this growing audience such as Zoku, Citizen M, Yotel and Z Hotels all of which pride themselves as a home away from home.
Whether a boutique, independent or part of a bigger brand, they all have common traits – they are technological more appealing (such as providing mobile check-in and free Wi-Fi), they provide communal lobbies that can service as both a personal office space or “chill” area and they offer baristas and ‘canteens’ with kitchen amenities over the traditional bar and restaurant – it’s all about hotel self-service and interaction / “sharing” of communal spaces with other paying guests. Their interiors are also a world way from their typical standardized look and feel, and are more often then not someway individually entwined with the local community whether it’s through artwork displayed at the hotel or locally served food. “Our business is not just heads in beds. It’s not just a functional stay anymore. It’s not just a clean shower and a comfortable bed. It’s more about providing an experience.” – Toni Stoeckl Marriott, VP of Lifestyle Brands, Marriott.
There is no doubt that the sharing economy has changed the way people want to experience a destination. Hotels with a cookie-cutter experience will have a harder time appealing to the customers most likely to try sharing. But for the hoteliers that do appeal to the sharing economy – they are not only more consistently booked, but also guests tend to stay longer! That can only mean great things in terms of loyalty and a healthy bottom line.
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