Hotels deal with digital disruption
Digital operators like Airbnb are emerging as a serious threat to the hotel industry.
Airbnb is on the verge of finalising $555 million of funding, securing Google Capital as a backer. With a market capitalisation of $30 billion, Airbnb now has the same value as the Hilton and Hyatt combined. It also boasts 1.5 million listings, more than the Starwood and Mariott combined following their merger to create the world’s biggest hotel company.
The extra funding would help Airbnb test out more digital tools but the hotel industry is already working in that space.
Mobile Commerce Daily reports that the Hilton hotel chain is using beacon technology to provide travellers with amenities and activities.
Needless to say, these are the digital tools that other hotels will pick up.
TFE Hotels chief executive Rachel Argaman says digital intruders like Airbnb, online booking and travel advisory businesses were not having that big an impact on the industry.
"Airbnb operate in parallel to us with a very different product. We see them as a valuable distribution partner. We distribute all our hotels on Airbnb," Argaman told Fairfax Media.
"The challenge is about retaining customers. We're happy to pay 3 per cent commission on Airbnb to acquire a new customer.”
And she said the hotel were adapting the change, creating a sense of place for travellers.
"Our lobbies are transforming. They are living lobbies. Reception is tucked away in the corner. They are like a social lounge: a place to be, to eat, to drink, to dine and to socialise," she said.
This is a strategy that has allowed TFE, which has the Adina, Medina, Rendezvous, Vibe, Travelodge and TFE Hotels Collection brands, to keep expanding. It’s adding another 16 new venues over the next five years and another 10 are in the pipeline.
According to Argaman, TFE is achieving 85 per cent occupancy in its portfolio of 70 hotels in six countries.
And that’s regardless of Airbnb.
by Leon Gettler, September 28th 2016
