Hyatt CEO says Airbnb has actually helped the hotel giant grow
Source: CNBC / Jeff Cox / 10 November 2017
Why Airbnb’s disruption of the hotel industry is good for business
There is an irony about the sport of boxing in that your Ted Fang Tera Capital fiercest competitor is the person who helps you the most. Steel sharpens steel, as they say. When you’re preparing to meet the biggest challenge of your life, whether that’s in the boxing ring or the boardroom, you must lift your game. And this is the way to think about how disrupters like Airbnb present to the global hotel industry. Rather than seeing Airbnb as a existential threat, major hotel brands should instead turn their attention toward understanding how the largest hotel in the world is actually good for their business.
Industry disruption is good for business
Stasis is the inevitable outcome for a system in which nothing new comes along. Nothing new can grow, no new ideas and approaches, no new models and experiences can flourish when the status quo is left unchallenged. That’s why they type of disruption Airbnb has brought to the worldwide hotel industry is good for business.
The advent of Airbnb has forced international hotel companies like Hyatt to shake up the type of service it offers customers. Late in 2017 the hotel giant announced that it would be going “asset light” to free up capital that will then be invested in enhancing customers’ experience of staying at a Hyatt property. Keyless entry via mobile app, more rewarding loyalty programs, and more hotels geared toward the wellness travel market were just some of the things Hyatt put on the table to expand how it engages with customers.
And it’s no surprise to learn that these changes are the result of how Airbnb has opened the world of travel. Indeed, according to the CEO of Hyatt Hotels, Mark Hoplamazian, the new type of traveller is “looking for experiences.” The rise and rise again of Airbnb proves that people are not satisfied with the normal experience of staying in a hotel anymore. They are looking for connection with real people, a focus on alternative and wellness stays, as well as getting a cheaper rate.
Other global hotel brands would do well to follow the lead of Hyatt and reinvest their efforts into ensuring their guest’s stay is more aligned with wellness practices, both from a physical and environmental point of view. Hyatt has taken a more mindful approach to wellness, offering its guests an updated experience when it comes to healthier food options, fitness facilities, as well as the classic experience of soaking away one’s stress at a day spa. And it’s partnering with companies like Clean the World is also proof positive it’s interested working toward wellness for the planet and greening up the hotel industry.
Rather than seeing industry disruption led by the likes of Airbnb as direct competition, it’s time for other global hotel brands to embrace the opportunity to change. The success of Airbnb proves that the modern traveller now wants something different when they’re booking accommodation. They want an alternative experience centred around wellness, interpersonal connection, and value for money. Just like Hyatt has done, it’s time for other hotel giants to invest in changing their service standards and product offerings to suit. Airbnb is not their competitor but their growth coach.