By Jo White, managing director at launch marketing specialist Five by Five
The travel industry is a fascinating case study of the impact of a pioneer brand when it launches into an existing market.
Since its inception, Airbnb has flourished as its low prices and easily accessible format opened up rooms and destinations worldwide.
The disruptor launched in 2008 and now operates in more than 34,000 cities in 190 countries and its inexorable rise continues.
At the Cannes Lions this week (the premier annual advertising conference), Airbnb’s founder and chief executive Brian Chesky discussed how it plans to go beyond just helping people book accommodation and instead will look at how it can shape the entire travel experience.
This suggests a move towards pairing hosts and guests for city tours and more. At Cannes, Chesky said, “Almost 20% of the trips [booked through Airbnb] are 30 days or longer. This is a huge movement. It’s not so much about ownership, as about access.” He then revealed a new platform, Nightat.withairbnb.com, which encourages brands and advertising agencies to create unique accommodation experiences for consumers.
So if you run an already-established company in the travel experience space, you might be worrying your days could be numbered. However, when a brand is a pioneer within a sector it also causes existing brands to reevaluate the market as a whole and their position within it. With the right preparation you can ensure that you can ride the waves of this disruption.
Firstly, to ensure you can future-proof your business, you need to ask whether the products or services you offer are truly customer-centric.
Airbnb is so successful because it prides itself on putting the customer at the centre of everything it does. It recognised the customer need for a seamless experience, greater choice and flexibility and, most importantly, value for money. It therefore offered a ‘home from home’ with all the facilities you’d expect: free Wi-Fi, a fridge, parking space, laundry and ironing facilities and so on.
So what are the needs of your current customer and importantly how can you attract the new, free-spending millennial market?
The hotel industry is actually a great example of established businesses rising to the challenge of the disruptor (in this case Airbnb) in the past few years.
Millennials have an interesting take on spending money: their trade-up trade-down mentality reveals a generation that is happy paying a premium price for brands such as Apple and Beats, but simultaneously has driven the success of budget clothing chains such as H&M.
This has had an effect on hotel giants and their offering too. For example, Marriot has recently introduced its Moxy Hotels and AC hotels, both chains are specifically targeted towards a millennial market, offering fast Wi-Fi, cheaper prices and chic styling. This has been replicated by Best Western and its chic urban boutique hotel Vib.
Hilton has also followed suit with its newly announced ‘Tru by Hilton’ range. Hilton has adapted the layout of its typical hotel room. There are no closets or bathtubs, but instead an open space with hangers and hooks on the wall and an elongated vanity and stand-up shower. It will even substitute a desk for a multifunctional chair with a tray that includes a spot for a tiny laptop or tablet.
Meanwhile, Richard Solomons of hotels giant IHG sees the importance of focusing on customers. He recently told the FT, “There’s a very large group of people who want to have an interest in being loyal to a brand. We see it in every walk of life…They have got confidence in the brands. You build that confidence. You build trust.”
These changes are a direct reaction to the shift caused by Airbnb. For too long, new product development in large hotel chains was neglected – there was simply no imperative to change things up when the money was rolling in. But Airbnb’s disruption has now forced them to create a product portfolio that is future-proofed.
So for businesses in the travel experience industry, it’s important to ensure your offering is geared for the modern consumer.
Individual or authentic experiences are a particular draw for millennials, and we have seen a number of new websites launching that cater for those seeking a different travel experience.
Spotted by Locals uses vetted “Spotters” to create mobile and online city guides from local perspectives, while Vayable uses millennial insiders to create and lead personalised, private tours in art, fashion, design, eating, drinking, architecture, history, outdoors, or cultural experiences.
Meanwhile Kuoni has launched a new travel brand called Brite Spokes, which offers ‘a wide variety of thematic trips, exclusive experiences and personally enriching adventures’.
So, for established brands in this space, you need to react quickly. Do this, and you can surf on this wave of disruption. If you fail to change your offering in time, you could be washed away.