At a time when hoteliers are fighting against the conditions imposed by online travel agencies and have been facing new competition from AirBnb for years, some are adapting a strategy that is bizarre to say the least: using AirBnb as a distribution channel for their rooms.
Hoteliers between a rock and a hard place
We knew that OTAs (online travel agencies) were a soft drug for hoteliers: it’s hard to get by without them, even though the commissions they charge are dramatic for their business. Basically, they are a major distribution channel in terms of volume, but generate very little margin. And they’re not necessarily more advantageous for the customer, which is why we always recommend booking your hotel directly. But while the bigger players manage to survive in the power struggle with the OTAs, the same cannot be said for the smaller independents.
Alongside this, hoteliers have seen the arrival of a new player, AirBnb, which has turned the codes of tourism upside down and, no matter what anyone says, presents them with a convincing alternative for a certain type of clientele and a certain type of tourism. The big groups have responded to this phenomenon with Home and Villas at Marriott and One Fine Stay at Accor. A response that only addresses the upper end of the AirBnb clientele, but which has the merit of existing.
But some have recently adopted a highly original strategy: selling their inventory on AirBnb, which in effect amounts to choosing their evil: relying on one competitor to avoid another.
Marriott hotels on AirBnb
Recently, specialized sites have noticed that hotel rooms can be found on AirBnb, and more specifically, rooms belonging to the Marriott group. It’s not difficult: just type the name of a brand + Airbnb into Google and you’ll see.
Just a few examples…
It’s especially surprising to see that these are Marriott Group hotels, since just a few days ago, in an exchange with financial analysts on the occasion of the presentation of quarterly results, LeenyOberg, Marriott’s Executive Vice President and Chief Financial Officer said
“So while OTAs probably account for 14% of total bookings, don’t forget that our direct channels account for over 76% and half of that figure comes from digital channels.” When you consider that the industry average is probably around 30% direct bookings, it’s hard to say that Marriott has a vital distribution channel problem.
So why?
Why are Marriott hoteliers distributing their rooms on AirBnb?
On the face of it, you’d think they’d be targeting a certain clientele. Indeed, I think AirBnb customers would be perfectly at ease at Moxy, for example. But the argument falls apart when you find Sheraton hotels and, even more so, the luxurious St Regis in New York at an unbeatable price ($1000 for direct booking).
Boosting occupancy rates by multiplying channels? This wouldn’t be shocking, and in fact all the group’s hotels use OTAs to complement their direct channels. But what’s strange about this is that sometimes the rooms offered on AirBnb seem to have completely disappeared from the inventory on the site, making them inaccessible to customers wishing to book directly.
To save money? AirBnb takes a 3% fee from the hotel, compared with more than 20 for an OTA…that makes sense.
To cheat? It would seem that this practice is “unconventional” and merely an opportunistic strategy on the part of the hotelier, so one wonders how the income is accounted for, especially if the rooms are taken out of inventory. Is it included in the basis used to calculate the royalties paid by the hotelier to the group?
And let’s go one step further: in cases where these rooms (you’ll notice that there are only superior rooms or suites) are removed from inventory, they are no longer available to upgrade a “normal” guest. One hotelier (again, Marriott) has been known to remove unsold suites from inventory on a daily basis, so as not to have to use them to upgrade guests “automatically” under the loyalty program.
What’s more, a customer who is a member of the loyalty program and sees a good deal in using AirBnb should not benefit from being a member of the program if he books in this way. A win for the hotelier.
But what does Marriott think?
At this stage we don’t know much more, but the real question is whether these practices are endorsed by the group, or whether they are the isolated practices of “rogue hoteliers”. One thing’s for sure: it doesn’t help the brand!
While we await a possible reaction from Marriott, we still wonder how such practices could have gone under the radar.
Image : Marriott Bonvoy by II.studio via shutterstock
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