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AirBNB helps boutique hotels

Brilliant online travel companies like AirBNB are slowly squeezing the hotel industry particularly in tourist destinations like the Caribbean. Many travellers are now discovering that in the Caribbean all the beaches are public, this means everyone has the right to be on them. Where once hotels seemed to have control over their stretch of beach that is no longer the case and they are now having to compete with small businesses that are sprouting up just to rent beach chairs to AirBNB guests. What this means is that you don’t have to stay directly on the beach to have the beach experience. And travellers are starting to realize a quite villa, or boutique resort  on a hill above the ocean can offer much better culturally rich experiences… and much better views.

The first victims of AirBNB are the “garden view” hotel room suites. Why would anyone choose to pay for a small garden view room, when they could rent a large room in a home with a view of the ocean for far less, and get free access to a number of beaches?

In Barbados a family can rent a 4 bedroom home through AirBNB with a pool, an awesome view of the ocean, and public beach access 5 minutes away, for just under $300/night. Compare this to one Superior room at the Marriot hotel in Barbados for $220/night and it is easy to see why the hospitality industry is in turmoil.

Add to this the rise of “Beach Clubs” like Nikki Beach and there is little reason to rent a room at a large corporate hotel.

So what is the answer? How can corporate hotel chains survive when AirBNB has so completely changed the playing field?

They have to start adapting to the change and offer more than just a room. They need to take a lesson from the small boutique hotels that are succeeding by attracting travellers with “experiential” opportunities. For starters, the land costs for a boutique hotel smart enough to know they don’t have to be right on the beach, are much lower. Boutique hotels offer travellers the chance to experience local culture and many of them set up partnerships with local businesses. Successful boutique hotels provide on site programming (yoga and cooking classes, nature hikes etc.) giving travellers more than just a room on the beach, but a memorable experience.

Corporate hotels have to change the way they do business. Sweeping policies that once guided their developments need to be strategically evaluated. For example here is a quote given by a development manager at the Marriott  “We are currently interested only in a beach location for a luxury or an upper-upscale brand in Barbados.” That kind of archaic thinking is why so few of the large hotel chains succeed on islands like Barbados, where boutique hotels owned by private families control the luxury market.

Corporate hotels have a choice – change now or slowly watch their profits wither.

Fairmont Royal Pavillion

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