How hotels can beat Airbnb: The secret power of local stories

How hotels can beat Airbnb: The secret power of local stories

By Kirk Cheyfitz, Story Co-founder

The U.S. hotel industry has been spending millions waging legal and political war against Airbnb. The hotel business is battling its fast-growing rival mostly by telling stories to judges, regulators and elected officials in courts, city halls, statehouses, federal agencies and on Capitol Hill.

The lobbying is going fine, but the lodging industry’s representatives and most individual hotels — especially the big chains — are consistently failing to tell the one, core story they need to tell travelers: Hotels, just like Airbnb rentals, exist in a particular locale. Hotel staffs, too, are mostly local people with nuanced local knowledge.

In short: anything an Airbnb host can do, a decent hotel could do better. Probably much better.

Decent hotels have long experience answering travelers’ questions, guiding them to local treasures and giving them directions. But travelers won’t realize any of this until hotels begin to tell local stories about local culture. So far, Airbnb is winning hands down at hyper-local storytelling.

 

What do travelers really want?

When it comes to travel trends, the research is in. Younger travelers care less about their rooms, more about communal spaces where they can socialize. They want local design and décor, abhorring the we-look-the-same-everywhere sterility of many chains. They avoid tourist-trap restaurants and entertainments, seeking unique, engaging experiences recommended and frequented by locals. They want to become immersed in local culture.

Airbnb’s marketing and advertising is firmly focused on helping travelers get what they want. For Airbnb, which owns no real estate, the “product” is the destination experience and the insider gateways to destinations are the hosts whose houses and apartments are slowly eating away at hotel bookings.

Airbnb markets the authenticity and deep local knowledge of its hosts, who are positioned as guides and confidantes. Hotels seem to remain stuck in the days when they bragged about their mattresses.

Even when hotel chains overtly attempt to revamp their marketing to combat Airbnb, they get it woefully wrong. A recent Advertising Age story trumpets, “Feeling the Heat from Airbnb, Loews Hotels Plays Up its Human Side.” But the creative, executed in traditional-looking, TV-like spots cut to differing lengths as pre-roll for YouTube and Instagram, is a vague, generic and clichéd appeal to “wander” and “stoke the fire of your curiosity.” The closest the spots come to expressing concern for people’s individual goals is this line: “...we know travel is a human need, so we treat our guests like, well, human."

The long form of these spots is on the chain’s YouTube channel, where it attracted a bit more than 600 views in its first six weeks. This tiny number speaks eloquently to the fact that the spot contains absolutely no information that is at all useful to any real traveler making a real decision about a specific destination.

Looking at the travel research, it’s clear that getting treated “like, well, human” is neither specific enough nor local enough to gain any ground for Loews or any other hotel. For the sake of thoroughness, I went to the Airbnb site just after looking at the Loews spot. The first thing I was offered was an “intimate whale watching experience” in a small boat that puts out from Newport Beach, CA, just south of Loews’ signature Santa Monica property. Airbnb doesn’t own a single piece of real estate in any destination, but it has managed to own individualized and hyper-local experiences.

 

How one hotel group out-locals Airbnb

The truth, of course, is there’s no good reason for Airbnb to own “local” unchallenged. Most hotel staff members are locals, after all. A hotel’s staff and guests arguably form a unique community where people who know the local culture are ready and willing to share their stories and recommendations with traveling experience-seekers.

An example of a small hotel group that understands all this is Rome Luxury Suites, which operates small hotels clustered around a single famous neighborhood. The group’s marketing is limited, but stresses that each property “has its own special sense of place, one rooted in the history of Rome and the Spanish Steps neighborhood.”

Bringing this promise of localness vividly to life, each arriving guest is handed a 48-page booklet that appears to have been hand-written and signed by the group’s owner, Alberto Moncada. In his introduction, Moncada explains that the neighborhood’s buildings and streets “have been frequented by my family for centuries.” You get the feeling Moncada knows the town. Pen-and-ink sketches of local landmarks add to that feeling.

The booklet lays out a highly personal, highly useful insider’s guide to the people, manners, architecture and peculiarities; the restaurants, cafés, bars, craft shops, clothing boutiques and varied sights of the neighborhood and of Rome. At one point, Moncada directs you to “a men’s hat shop that looks almost the same as when my grandfather bought his hats there.” The group’s staff, of course, is trained to incorporate all this local knowledge and add to it as they answer travelers’ questions, make suggestions and so on.

Rome Luxury Suites’ multi-channel marketing is nothing to write home about, but the group shows one way a hotel can beat anyone at the “local” game.

 

What’s a hotel chain to do? Own local experiences.

The hotel business has assembled and pushed numerous negative stories about Airbnb, an internal report from the American Hotel and Lodging Association (AHLA) reveals. These stories range from “the working teacher whose apartment complex is overrun by drunken tourists, to the tenants who are evicted so their landlords can create an illegal hotel...,” the report says.

Most recently, the war on Airbnb escalated wildly when Local 6 of the hotel workers union joined the Hotel Association of New York (not affiliated with the AHLA) to back a TV spot suggesting Airbnb rentals are havens for terrorists. The trade publication Hotel Management said the spot alleges Airbnb is “aiding and abetting those who want to cause harm.” Airbnb responded by pointing out the ad is “misleading, plays to xenophobic fears, and is beneath the dignity of the hospitality industry.”

The negative lobbying efforts have resulted in some regulatory and legal victories over Airbnb. But nothing so far has put a dent in Airbnb’s growth.

The Airbnb website has come a long, long way from the bad old days when it looked almost exactly like a mediocre hotel site — featuring solely rooms and prices. Now, true to the brand story it’s telling, the site opens with “Experiences.” On a recent visit, these included an urban beekeeping tour in London, kitesurfing lessons on the Malibu beach and a pub crawl through Dublin’s music scene. There’s a lot of very specific information for travelers here.

Airbnb’s experience-centric storytelling has driven exponential growth. In the summer of 2010, Airbnb reports, “roughly 47,000 people stayed with Airbnb hosts.” By the summer of 2015, that had risen to “17 million total guests.” That was roughly 36,000% growth in five years. Annual numbers “nearly doubled” again during 2016 alone, says a study by commercial real estate giant CBRE that was commissioned by the AHLA.

Airbnb remains tiny compared to the traditional hotel industry. U.S. hotels collected $245.4 billion in revenue and taxes in 2015, says an AHLA report by Oxford Economics. Airbnb hosts in the U.S. are estimated to have taken in $5.7 billion in the year from October 2015 to September 2016, says the CBRE study, which quotes AirDNA, a company that tracks Airbnb data for the vacation rental industry. That puts Airbnb at roughly 2% to 3% the size of the hotel industry. So it’s the growth rate that has the hotels freaked. The hotel business is scared of what Airbnb might become, not what it is.

Given everything — the research, the current trends — it’s pretty clear that if hotels want to compete more effectively against Airbnb, they have a lot of work to do. Some of this work is long-term — things like differentiating the look and feel of each property to reflect the locale. But one thing they can do immediately is to start telling their own true, authentic and unique stories of local experiences and like-minded communities, of curated culture and new ways to travel.

Hotel groups need to market each hotel as a local phenomenon and focus on local experiences. They need to create truly useful hyper-local content and distribute it in ways that serve travellers best. They need to launch blogs and social pages. They need to make videos and photos that are constantly updated. They need to promote the local knowledge stored in their staff members. They need, in short, to become valuable sources of hyper-local insight into the wonders of each property’s location. And they need to resist the temptation to fall back on cheaper, more generic marketing that portrays the chain or group as some kind of monolith that’s the same everywhere.

All the lobbying and advertising in the world will do the hotel business absolutely no good without such a sweeping change in hotel storytelling.

Hey, Ad Land, Wake Up to Net Neutrality!!

Hey, Ad Land, Wake Up to Net Neutrality!!