We have seen hotel operators expand in traditional hotel segments through M&A, says Ben Smith, Vice President, Global M&A at JLL Hotels and Hospitality. Platforms like Airbnb are an extension of what traditional hotel companies have been doing all along, and in one view not so dissimilar to apartment hotel operators. It is not overly surprising that hotel operators would also be interested in acquiring home rental platforms.
Accor now has 8,500 addresses in the luxury private rental market.
Travel companies too are keen for a slice of the actionand revenueof these alternative accommodation platforms.
Expedia acquired
HomeAway in November 2015, and last year opened an Asian office in Singapore as part of its growth plans in the region.
Collaboration and consolidation ahead
Its not just a case of global players buying up the market disrupterscollaboration is also another way to go. Luxury collection,
Châteaux & Hôtels, for example, announced a joint initiative with
Airbnb in 2016 whereby it would offer culinary experiences as part of
Airbnbs Trips venture and put its rooms up on the website. Such creative partnerships between hotel companies and alternative accommodation platforms could also be a way for the latter to grow beyond their existing business models.
Recent research from JLL suggests that home rental sites and the alternative accommodations market account for approximately 10% of hotel room bookings in the top global gateway markets such as New York, London and Paris. However, the number of rooms offered by these online platforms is showing some signs of slowing or plateauing growth in urban gateway cities due to the regulatory environment and the number of willing hosts reaching a structural cap.
This may be one reason why Airbnb splashed out on
Luxury Retreats to build its presence in the high-end home rental and service sector. And there could well be more consolidation between home rental platforms.
The lodging industry is still one of the most fragmented consumer industries and there are clear economies of scale, so it is likely that there will be further consolidation going forward. M&A will continue between traditional hotel companies, but will likely also involve home rental and online distribution platforms, adds Smith.
Evolving with the times
As the vacation home rental market matures, its also driving innovation among the hotel groups to stay ahead of the curve.
Marriott International is targeting travelling families and groups of friends by creating communal spaces such as a kitchen and lounge area outside rooms in its
Element brand.
New hybrids are also springing up, such as the
Ovolo groups Mojo Nomad where guests can live and work at selected Ovolo hotels in Hong Kong and Sydney.
Zoku, a new hotel in Amsterdam, which is dubbed as a combination between
Airbnb and a
WeWork coworking space," already has plans to expand internationally despite being less than a year old.
While disruption from home rental sites and alternative accommodations remains relatively small in the grand scheme of the global lodging sector, change is rippling through the sector. As the sharing economy continues to develop, more innovative products and new business models will help to meet the evolving needs of modern travelers and in turn, shape the future of the industry.
