Disruptive impact of peer-to-peer giant Airbnb on hotel sector played down

The emergence of room sharing platform Airbnb has seen very little impact on the hospitality sector, despite the huge valuations placed on the website.

The emergence of room sharing platform Airbnb has seen very little impact on the hospitality sector, despite the huge valuations placed on the website.

Brian Reeves, chief executive and founder of GOPPAR Digital, told an Open Destinations London Technology Week event this week that disruption has been constant in the travel sector.

He told delegates that the main impact of Airbnb has been to increase the size of the market and that travellers who like staying in hotels continue to like staying in hotels.

“We do not see any downturn in terms of website visitors and room nights,” said Reeves. “Disruption is not in evidence.

“They are democratising travel but they are making the pie bigger, like Ryanair in the early days of low-cost flying, it’s attracting a lot of new demand. Airbnb are doing the same thing.

“If Airbnb are going to eat into hotel share they are not going to eat in to brands that offer a set experience. If anything it’s going to eat in to people building new experiences like boutique hotels.”

Reeves said hotels were in a prime position to exploit the world of big data to disintermediate and disrupt the travel distribution eco-system.

But he urged them to focus on growing net Revenue Per Room (Revpar) rather than just Revpar, by understanding the true cost of sale in all channels to look at demand optimisation.

“What we are trying to do it look at the way we generate demand online, actually get behind the cost of distribution. “When hotels think about distribution there’s a huge opportunity for disintermediation but it’s poorly understood.”

Reeves said hotels were striving to gain greater control of inventory, including digital marketing assets like imagery, rates and availability, channel management and direct contracts.

He said hotels were looking for digital omnipresence on every site possible and manage that to develop intelligent strategies around revenue management, distressed inventory and early bookings.

Reeves said that previously serviced apartments had been considered to be the next big disruptive entity, but that had not proved to be the case.

Although playing down the disruptive influence of Airbnb, he picked out rival homestay site Onefinestay, which has attracted investment from Hyatt, as a potential disruptor.

In the realm of metasearch, Reeves said Google has “put a massive stake in the ground” integrating hotel price ads at the top of search results and pushing organic results further down.

“The biggest challenge is trying to get hotels to understand the transaction cost per click, as opposed to paying for a booking.

“They are not comfortable yet paying a click cost for a visitor and transposing that in to a cost per visitor model.”Reeves said he expected both Google and TripAdvisor to work on backend functionality to solve that problem.

He singled out app HotelTonight for its approach to mobile in hospitality and highlighted its recent Escapes venture, for getaway weekend deals, as a development to watch.

“They use the real estate available really, really well. From a usability perspective you could not design it a lot better. They also look at user behaviour on mobile.”

The app has proved itself to be a great way to get rid of distressed stock to a closed user group and volume now means it is offering the ability to track rates to get the best discount.

Reeves said the OTA space is extremely noisy and too homogenous, the opportunity being for firms that develop niche, curated content aimed at specific customer interests.

And he said an opportunity that’s waiting to be exploited is CPC gateway technology to give hotels daily control of their presence on metasearch sites as they already have on OTAs.

If this is solved OTAs will be forced to engage with hotels in a demand-based way so they can help them in the areas where they need business.

Where OTAs have succeeded is in on playing the consumer psyche, so that 64% of people believe they get a better deal with the agent than on the brands own site.

This is compounded by the fact that 61% of people continue to price comparison after they have decided where they want to go.

Hotels are fighting back with tools like Triptease’s price tracker, but the goal is to “get more existing visitors to convert, then you can start to spend more to attract more visitors,” said Reeves.