How Enterprise Hotels Can Leverage A Shared Data Ecosystem to Compete with Airbnb

- 9th Aug 2017

In a previous post titled Hotel Vs Airbnb: How Data can help hotels combat new entrants, we discussed how a networked, decentralized hospitality model is perceived as one of the biggest threats by hoteliers, and how data can be used to fend off this new insurgent.

But Airbnb is no weak opponent. While tracking and accumulating data on your guests throughout their entire travel journey is certainly a great move in the right direction, it may not be enough to outcompete Airbnb in the long run. In this post, we’ll go a step further to show how hotels can better leverage guest data by participating in a shared data ecosystem.


Assessing the Extent of Damage Done by Airbnb

A report by HVS gives an accurate estimate of how Airbnb, the online vacation marketplace, has impacted the hotel industry. Airbnb is said to be siphoning off close to $450 million from hotels in direct revenues per year. Between September 2014 and August 2015, Airbnb booked 2.8 million room nights, compared to just 480,000 nights booked by hotels.The report also forecasts that by 2018, Airbnb will be booking approximately 5 million room nights per year.

Another report by CBRE Hotels has developed what they call the ‘Airbnb Competition Index.’ This compares Airbnb’s Average Daily Room rates (ADR) to traditional hotel ADR’s; the scale of the active Airbnb inventory in a market to the supply of traditional hotels, and the overall growth of active Airbnb supply in that market, into a measure of potential competition. It turns out that New York with an ‘Airbnb Competition Index’ of 81.4 is prone to maximum risk, followed by San Francisco, Miami, Oakland and Oahu.

With a valuation of $30 billion, Airbnb is likely more than the combined worth of Hyatt and Hilton. The table below proves that this is not an exaggerated claim. To compete against a threat so powerful, hotels need to formulate a robust strategy.

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Befriend a Distant State, While Attacking a Neighbor 

Considering how formidable a competitor Airbnb is, a lone battle by any one hotel will probably end in a fiasco. So should all the hotels come together to rise up against the common enemy? Well, Sun Tzu – the military strategist who is credited to have written The Art of War, would probably disagree. According to one of the 36 stratagems, a set of ancient Chinese military directives – when you are the strongest in one field, your greatest threat is from the second strongest in your field, not the strongest from another field, and thus the distant neighbor will make a good ally, however temporary.

How Enterprise Hotels Can Leverage A Shared Data Ecosystem to Compete with Airbnb

Extrapolating this to the hotel industry, it would mean that if hotels joined forces, it would be counter productive because they are in direct competition with each other. Instead, hotels should look towards other industries and form a coalition with those who share a common interest.

Shared Data Ecosystem: Information Partnership Among Interested Parties

The basis of a shared ecosystem is joining forces without merging. And one interesting way to form such a partnership is by sharing customer data. If companies with a common interest come together, they can turn a threat into a business opportunity.

Hotels can partner with airlines, rental cars, media companies, banks, and restaurants, to establish a combined marketing program. Individually, each of these services may not reach a wide customer base but if the offerings are bundled, it could appeal to a much larger market.

To give you an example of how it would be played out, let’s consider the journey of Rachel, a loyalty member of a hotel.

Airport Partner: As soon as Rachel is in the baggage area of a partner airport, the airport sends an API trigger of her status and her estimated time of arrival to the hotel she is going to check into. This will ensure that there is no wait time and her room is ready on arrival.

Hotel Partner: At the hotel lobby, she receives a personalized welcome by a VIP manager since she is recognized as a loyalty member and is escorted to her room.

Media Partner: On entering her room, the hotel’s media partner pushes a special offer to Rachel.

Taxi Partner: Next morning, when she steps out to attend her business meeting, the taxi partner has a cab waiting for her.

Hotel Partner: If she’s back for lunch, the hotel restaurant sends her a coupon to redeem at the restaurant.

Bank Partner: As per a predefined business rule, sometime in the evening, a smart captive portal pops up on her phone connected to hotel WiFi with a pre-approved credit card offer from the bank partner.

Local Services Partner: In the evening, Rachel receives an in-app notification with local activities curated to her historical behavior (determined by the guest Wifi over a period of time), including tickets to a jazz show in the local lounge.

Retail Partner: Her favorite retailer Macy’s is in the local mall and pushes her a coupon valid for the evening during her stay.

Taxi Partner: On the day her check out is scheduled, she has a cab waiting for her to take her to the airport.

In such a shared data ecosystem, all partners stand a chance to acquire new customers and penetrate newer markets. And in turn, the customer stands to benefit the most because she experiences a frictionless travel journey.

Shared Data Partnerships Pave the Way for Frictionless Guest Experiences

Guests choose hotels over informal accommodation for a variety of reasons: personal security, the prestige of a brand and the consistency of service all coming to mind. Real hotels are in a position to implement such partnerships, that can add real value to a guest’s experience throughout their entire travel journey.

Properties using AirBnB as a marketing platform may be extremely transient in nature, but the level of investment and long break-even time of a typical hotel means that its reputation has to be built and maintained over years if not decades. Although the societal and experiential aspects of value continue to be important, the basic functional experience of a guest is often what distinguishes the AirBnB experience from what established hotels can offer. In a world where bad news can travel around the world in an instant and gain momentum as it goes, ensuring a consistent guest experience is of extreme importance.



Proximity MX helps hotels gain actionable insights on guest behavior using existing WiFi or Beacon infrastructure. Request for a free demo by clicking the button below to learn how Proximity MX can help you gain guest insights and engage with them real-time.