Why hotels should start worrying about Airbnb
Airbnb is about to steal massive market share from hotels.
It has teamed up with three travel management companies—American Express Global Business Travel, BCD Travel, and Carlson Wagonlit Travel—giving their clients the opportunity to book on Airbnb.
Airbnb has been building a corporate based platform, Airbnb for Business. The partnerships will send their clients there.
These companies have massive clout in the market and lots of high profile clients.
AmEx GBT’s clients include IBM, McKinsey, and Microsoft. In 2015, it reported $30 billion in sales. Airbnb has become its “preferred supplier” which means it can offer their clients negotiated rates and business expenditure tracking. Carlson Wagonlit Travel generated $24.2 billion of sales in 2015 and 92 per cent of them came from corporate bookings. BCD had $23.8 billion in sales.
With these partnerships, travellers will be able to book their own accommodation for business trips on Airbnb with their corporate email address. Alternatively, companies' travel managers can do it for them. The Airbnb data will be integrated into the company travel managers’ systems, allowing itineraries to be planned and tracked so that companies can see how much cheaper accommodation could be. And with Airbnb, they would be better able to monitor bookings than they in the past.
This is a massive development because many hotels still believe Airbnb is just a home-sharing start up for students and people taking the odd holiday. They think Airbnb would leave their core customers, business travellers, alone. All that is about to change.
The AMEX deal is about to go live in the United States and will be operating in Australia and other markets before the end of the year.
“Business travellers want the freedom to choose accommodations that align with their personal and professional tastes," said American Express Global Business Travel's vice president, global supplier relations Wes Bergstrom in a statement.
"At the same time, traveller safety and security are a top priority for companies … [with Airbnb] our customers can further evolve their travel policies and offer their travellers the ability to book preferred accommodations."
by Leon Gettler, July 15th 2016
