“Our guests don’t want the Airbnb feel and scent”
– Christopher Norton, EVP of global product and operations at the Four Seasons (Fast Company 184/April 2014)
If I would be running hotel chain at the moment, I would not be saying comments like one above. I would be trying to learn meticulously what Airbnb is doing well and taking some cues to my existing business. Some of the hotel companies are already experiment with it, like W Hotels and Desks Near Me collaboration.
There are two major trends driving the sharing economy which are affecting your business as well :
1) Digital tools have enabled global sharing economy services. This provides adequate scale for the companies to make financial sense. For consumers this means user-friendly services and tapping into global offerings.
2) Ownership is not cool: experience is the new Rolex. Owning stuff is not ecological or smart: people are increasingly more investing in services and experiences.
Sharing economy is not a means to an end. Where it has already been successful (accommodation & transportation), it is actually improving the current experience. Majority of Airbnb users could use hotels as well, but they are bored with existing Hotel offerings and want more personalized experience. Uber works best in markets, where there are problems with Taxi services or public transport. Consumers are ruthless: they select the best service nevertheless of how it is produced. It works other way around as well. When trying to reach mainstream success, your experience has to be able to compete with “normal” offerings as well. Price plays naturally part as well, but only low price cannot be the competitive difference for the new services.
It is likely that many sharing economy initiatives will fail and badly. Some of them will succeed and in big way. Airbnb founders will not be the only billionaires emerging from sharing economy. That is why brands should experiment with sharing economy initiatives now, when their category has not yet been disrupted with the strong sharing economy player.
Other option is to only concentrate on suing the new competitors and hope that they go away. Unfortunately, that is not a winning solution. Successful companies have to grow and constant innovation is the only way for that growth.