New Marriott division clashes with Airbnb

As hospitality companies feel competition from the booming colocation industry led by Airbnb, Marriott International has decided if you can’t beat them, join them.

The company, whose brands span from the Courtyard by Marriott bargain to the Ritz Carlton, is extending a home-sharing experience to a full-fledged division that will rent you a villa in St. Barts, a mountain home at Lake Tahoe or an Irish castle. .

The company is betting big on a market where other hotel companies have yet to succeed. The new Homes & Villas by Marriott International will offer 2,000 luxury properties around the world, ranging from a one-bedroom house for $200 a night to this castle in Ireland for $10,000 a night.

The new division extends an experiment last year which offered 500 accommodations in Europe.

“The demand numbers are forcing hospitality companies to fundamentally rethink who they are,” said Makarand Mody, assistant professor of hospitality marketing at Boston University’s School of Hospitality Administration.

In a study he and his colleagues published this year, Mody found that revenue per available room, a common hotel performance metric, fell 2% in 10 major U.S. cities since Airbnb emerged in 2008. Airbnb’s disruption of business, he added, “has been a wake-up call to the hospitality industry that there is a need for innovation.”

Marriott homes aren’t flatshares in the sense that the landlord gives you the keys or the door code, but the term has effectively been extended to include rentals managed by third-party companies. Its partners, including LaCure and Loyd & Townsend Rose, veterinary homes for unique design and attractive locations.

Marriott said its trial last year convinced the company to go for it. Nearly 90% of tenants were members of its loyalty program, Marriott Bonvoy. Most were traveling for pleasure and, with an average stay of five days, spent three times as long at the establishment as the typical hotel guest.

“People stay at different hotels for different travel purposes,” said Stephanie Linnartz, global chief commercial officer at Marriott. “Sometimes it’s a cool weekend with friends at a beach house, then a kids soccer tournament and you need a Courtyard,” referring to Marriott’s cheaper brand. “House sharing is another offer.”

The company’s plan, said Chekitan S. Dev, a professor at Cornell University’s SC Johnson College of Business School of Hospitality, “prevents any migration of lodging nights from traditional shared hotels in the family.

Marriott isn’t the first hotel company to dabble in home sharing. In 2017, Hyatt invested in Oasis Collectionsoffer houses with premium linens and concierge assistance, but sold it a year later. AccorHotels owns the collection of homes with similar services called OneFineStay, though its 2018 year-end financial report said the investment has yet to pay off.

Hotels’ early efforts to compete with Airbnb – which offers more than 6 million accommodations on its platform – illustrate the differences between traditional hotels, which can offer 300 similar rooms in one location, and a colocation service, which rents unique units to thousands. Parks. Experts say hotels are being challenged in the rental world to provide the consistency they normally control and to learn how to manage remote properties.

“Hotel brands come with a stamp of approval, but it’s harder to enforce,” said Eric Breon, CEO of Vacasa, a vacation property management company, which recently acquired Oasis. “There is a lot more personality in people’s homes. They bought the beach house and furnished it. It’s not a hotelier to whom Marriott can say, “This year, we’re only doing oval mirrors, so you have to get rid of the squares.”

Marriott’s solutions to these challenges have been to stick to luxury properties and contract with property management companies who take care of on-site logistics, including providing premium linens, high-speed Wi-Fi, in-person assistance, and extras like cribs and high chairs. Extended houses and villas have a minimum stay of 3 nights.

“Most travelers prefer hotels, so it’s still a robust market,” said Lorraine Sileo, senior vice president of travel research firm Phocuswright, who found that consumers prefer hotels versus alternative accommodations at a ratio of two to one. Hotel-branded homes, she added, may appeal to travelers who want assurances of “cleanliness, safety and amenities and don’t want a cookie-cutter hotel but aren’t willing to share an apartment with a stranger”.

A Key Selling Point for Marriott Bonvoy Members could be youhis ability to earn points and spend them on villa stays. The company plans to integrate its experiential rewards offerings — like taking a local cooking class or attending a concert — with its rentals.

“When you get your vacation rental home in the south of France, you’ll be able to book a bespoke wine and cheese tour in the village at the same time,” Ms Linnartz said. “Everything will be connected and interdependent.”