Company takes aim at Airbnb with new home-rental platform.
Hotel chain Marriott International Inc. is now joining the home-sharing space with its own home-rental business, reports The Wall Street Journal. Marriott’s new venture is an attempt to challenge those at the top of the industry like Airbnb, as home-sharing has become an increasingly popular section of the lodging world.
Beginning next week, Marriott plans to offer accommodations in approximately 2,000 high-end houses throughout 100 markets across the United States, Europe, and Latin America, according to The Wall Street Journal. Marriott’s U.S. home-rental platform will be one of the first in the country offered by a hotel. The platform follows a pilot program in Europe and is the next step in Marriott’s plans to take the business global. Marriott found that guests in Europe often stay more than triple the standard hotel length, and customers are more attracted to rental units that featured additional space, a kitchen, and laundry facilities for those extended stays. In Europe, the home-sharing properties have a 24-hour support line and in-person check-in at the location through Hostmaker, Marriott said.
Guests can book their home-rental reservations on Marriott’s website, according to the company. They can earn and redeem Marriott loyalty points the same way they would if they reserved a room at any of the company’s hotels.
However, Marriott International is not the only hotel chain looking to join the home-sharing fray. Hilton Worldwide Holdings and Hyatt Hotels have reportedly been looking into the home-rental business, too. Initially, hotel executives didn’t see companies like Airbnb or Expedia’s HomeAway as competition, but now believe they are cutting into their business—especially when it comes to guests like large families and leisure travelers.
Meanwhile, Airbnb is moving towards the traditional hotel business. The company announced in March it acquired Hotel Tonight, Inc., which gathers inventory from hotels and offers discounted rooms. Airbnb also invested in the hotel booking company Oyo Hotels & Homes. According to The Wall Street Journal, Airbnb is looking to diversify its offerings before it goes public.
Once Marriott begins its home-sharing venture, it will have to abide by any local restrictions that exist for short-term rentals. However, people familiar with Marriott’s thinking said its executives decided the potential revenue in the home-rental market is worth dealing with those regulations.
“It’s clear that the home-sharing phenomenon is here to stay, and hotel companies want to make sure they get their piece of this pie,” Hotel Investor and Wall Street Lodging Analyst Ryan Meliker told The Wall Street Journal.
Marriott International and other hotels interested in the home-sharing business should understand the risk involved. For starters, many major hotel operators work on management and franchise basis and license their brands to hotel owners. The moment they offer home-rentals, there’s a chance they’ll alienate their hotel partners because they’ve created competition for them. Additionally, they’ll have to maintain the same fire and safety requirements in their residential buildings that they do in their hotels, which can be challenging as some residential building stairwells are too narrow to meet the hotel operators’ code.
While other global hospitality brands have tried their hand at the home-rental business, they have not had much success, according to The Wall Street Journal. Hyatt purchased a minority stake in onefinestay, a company that lets travelers rent upscale private homes. However, the Paris-based hotel company acquired onefinestay in 2016 and two years later announced it had turned in a “negative performance.” Hyatt also invested in Oasis Collections and incorporated the home-rental’s listings into its distribution systems and loyalty program only to end its affiliation with Oasis last year.
In the meantime, Airbnb is looking to attract business travelers and is not shying away from the competition Marriott International or any other hotels entering the home-sharing industry present.
“We welcome them to the party and wish them bon voyage,” Airbnb’s Head of Policy and Communications Chris Lehane said.
Not all hotels are on board, however—including Hilton.
“We really view home-sharing as a different business,” Hilton Chief Executive Officer Chris Nassetta said in a statement. “We may think differently in the future.”