This was published 1 year ago
Airbnb versus hotels: Hotel industry still not providing decent alternative to Airbnb rentals
Airbnb has its problems, but right now the hotel industry is not offering a reasonable alternative.Credit: Getty Images
It doesn’t take much pondering to understand the success of Uber. The ride-share company swooped in and disrupted a taxi industry that had been allowed to grow lazy due to a lack of competition, whose model was unreliable and whose customers were treated with disdain.
Every cab ride was a mystery before Uber. When would it turn up? Would it ever turn up? Which way would the driver go? How much would the whole thing cost? You never knew, and cab drivers didn't care to tell you.
But then along came this fancy new app that solved all of those problems and did it at a fraction of the price. Never mind the fact that Uber is now far more expensive that it once was, or that the company has clearly operated with an aggressive "beg forgiveness rather than ask permission" approach – its tactic of establishing a loyal customer base, and then letting the legal details take care of themselves, has clearly been successful.
The taxi industry was ripe for disruption. And so, you could argue, was the hotel industry.
Here was another behemoth that had been allowed to grow lazy. Hotels had a lock on supply for accommodation, and so travellers were forced to put up with the product hotels offered them. That meant small rooms at high prices. It meant families having to splash out on two or three rooms just to fit everyone in. It also meant outrageous gouging for small conveniences like finding a few drinks in the fridge in your room, or doing a load of washing, or connecting to the Wi-Fi signal.
It's hardly a surprise that when a company came along offering to fix all of those issues, plus allow travellers a window into local life by being able to live in the home of one of those locals, it would prove popular.
And Airbnb is popular. Phenomenally so, really. The company's annual revenue jumped from $US400 million ($640 million) in 2014, to almost $US6 billion last year. Travellers can now rent entire houses or apartments – or even castles – or share them with others across the world.
I was an early adopter of Airbnb, immediately drawn by the opportunity to access areas of cities I had never been able to stay in before, plus enjoy conveniences like washing machines, kitchen facilities, coffee makers and work desks with Wi-Fi access that were included in the price of the property, which was often less than you would pay for a small hotel room.
I joined Airbnb in 2012, before the service had even launched in Australia. I've used it ever since. I like it, as do so many others.
However, it's now become clear that the success of Airbnb has had consequences, probably unintended, though not exactly addressed by the company, either. As more and more people are encouraged to put their apartments or houses up for short-term rental on Airbnb, rather than take long-term local tenants, so those long-term rental rates have risen to match the scarcity, forcing residents out of areas they may have lived in for a lifetime.
In encouraging tourists to stay in areas that seem cool and local, the Airbnb model forces out all of those people who made it so.
There are plenty of other issues too, from residents who suddenly find themselves living in what is effectively an unregulated hotel, to local businesses who suffer during off-seasons when all of those apartments are empty, to the illegality of Airbnb listings in certain cities. Plus, have you seen the cost of Airbnb's "service fee" these days?
The hotel industry has reacted over the last decade or so. You see far more properties now that are friendly to digital nomads and other long-term guests. You see more effort put into on-site bars and dining – something Airbnb can't offer. You see more effort put into social, communal spaces – again, something you won't get at a private apartment. You see hotels making more effort to be reflective of place, to capture what's special about a destination rather than just offering cookie-cutter facilities.
But still, it's not enough. I want to use Airbnb less. I recognise the deep social issues it is causing around the world, and I don't want to be part of that. But at the same time, the hotel industry hasn't caught up, particularly not for families or bigger groups of guests.
Show me a hotel that can offer enough space for two parents and two kids (that's not an expensive luxury suite), with rooms that allow some people to be sleeping and some to be awake, that offer laundry facilities and a place to cook your own food, and do all of this at an affordable price, and I'll stay there without a second thought.
There are apartment hotels, sure, which are increasing in popularity – though they don't really exist outside major cities or tourist centres, particularly outside Australia.
About the closest the hotel industry can offer to that – oddly, in a coming-full-circle kind of way for me – is a youth hostel. Hostels have most of those facilities, as well as some of the unique benefits of staying in a hotel. The only thing is, at the moment you can never be totally sure of the sort of crowd you'll be sharing that hostel with.
I go back and ride in normal taxis every now and then, to see if they've caught up, to see if they're better than Uber. And mostly, they're not. Still too expensive. Still too unwieldy.
The hotel industry is doing a much better job of fighting back against Airbnb. And I want it to succeed. But it's still not there.
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