Choice is a funny thing. It may or may not exist at all, but while it doesn’t apply to family, the good news for the hospitality sector is that it does apply to your customers. If you don’t want JD Vance eating at your restaurant, you don’t have to have JD Vance eating at your restaurant. So there.
Of course the thing about JD Vance is that he’s an American and say what you like about that, but they sure do know how to tip. And in this realm of crushed margins, a bit of tipping warms the cockles of your hard-pressed team.
So you may want to broaden your horizons on who you want as a customer and be a bit less picky.
This was spelled out this results season, where the hotel sector seems determined to continue to eat itself. At Marriott, conversions remained a significant driver of growth, representing nearly 30% of both room signings and openings during the first half of the year.
The group is also expanding its horizons down the chain scales, most recently with the launch of its latest collection brand in the midscale to upscale segment, Series by Marriott. Much as we prefer to avoid generative AI here at NewDog, we appreciate that playing with words is not everyone’s idea of a fun night in and that the likes of ChatGPT can act as a useful inspiration for, say, conjuring new brands. And the cheap version’s free, in case anyone in Bethesda wanted to give it a crack.
Anyway, CEO Tony Capuano told analysts: “We created Series by Marriott to bring established quality regional hotels into our portfolio and to further our reach among value-conscious travellers,
provide additional choice for our existing Marriott Bonvoy members and guests, and offer more affiliation opportunities and growth for local owners.”
One place where the company is deploying AI is into the Marriott Homes and Villas platform, where the guests are reportedly hopped all the way up with joy, which takes us seamlessly into Airbnb’s earnings call, where the model is less about using AI to handle guests and more about telling guests and hosts duke it out while it backs away slowly into the shadows, trying not to let its sack of gold jingle on the way out.
There’s much for hotels to envy about Airbnb’s model, which is all the distribution and none of the responsibility, having created a self-managing community run by mutual review. The Chinese have been looking at a similar system for years, although its nowhere near as advanced as Airbnb’s. There cannot be many hoteliers out there who haven’t fantasised about being able to review their guests, or, by doing so, manipulate them into spending the 24 hours prior to checkout cleaning the room to operating-room grade.
Possibly with this in mind, Airbnb CEO Brian Chesky told analysts that, years on from the platform’s purchase of HotelTonight, it was thinking of making more acquisitions in the sector, although of course he was still looking to convert hotel guests to Airbnb, mandatory pre-checkout floor waxing notwithstanding.
Chesky was eager to talk about how the group was going to reaccelerate – 10% growth just isn’t enough – and part of that was looking at pricing, which in many markets has seen the platform pipped by hotels. The other part was supply and, although Chesky didn’t specifically say “cities like Barcelona binning us off is making me scream into my pillow”u, he did say that in “supply constrained” locations, it would be nice to have some hotels to pick up the slack.
Who will Airbnb be competing with in this sector? OYO, with its distribution-only cheap route to market? The Airbnb brand is stronger, but will a marketing push for hotels muddy the water for guests?
Chesky did appreciate that where there are hotels, there are loyalty programmes, something driving Capuano’s 30% conversions rate. He told analysts: “ If we were to do something, I don’t think it would be a traditional points programme. I think it would be something much more interesting and novel. I absolutely think you should see something from us in the future. Not imminently, but in the future.”
It’s going to be totes amazing, whatever it is. He doesn’t know what, yet, but it’s going to be brilliant-er than anything hotels can do.
Is this going to present investors with a more tempting offering than the battling hotel brands? Do guests see Airbnb as a cheap family-friendly option, or can the brand stand alone for hotels? Will it buy Hotel du Vin? Will it spark Marriott and Accor to merge? We look forward to the first play by this USD77.75bn hospitality company, which has so far been hiding in plain sight.
