CHECK IN

It’s time for hotels to really, truly worry about Airbnb

Obsession
Getting There
Obsession
Getting There

The latest update from Airbnb could easily slip by. The company said today (July 12) that it’s partnering with three travel management companies—American Express Global Business Travel, BCD Travel, and Carlson Wagonlit Travel—to give their clients a chance to book on Airbnb.

When the home-rental site is busy suing San Francisco, facing potentially crippling regulations in New York, and struggling to prove its platform isn’t racist, that announcement feels comparatively trivial. But it should have hotel proprietors quaking at their reception desks.

The partnerships will funnel customers to Airbnb for Business, the corporate-focused platform that Airbnb has been slowly building. AmEx GBT, whose clients include IBM, McKinsey, and Microsoft, reported $30 billion in 2015 sales. It is adding Airbnb as a “preferred supplier,” meaning Airbnb will be able to offer negotiated rates and business expenditure tracking. Carlson Wagonlit Travel handled $24.2 billion in sales in 2015, with 92% coming from corporate bookings. BCD did $23.8 billion.

As Airbnb has matured from a small home-sharing startup to a modern hospitality behemoth valued at $25.5 billion, the hotel industry has reassured itself that Airbnb would leave its core customers—business travelers—untouched. People who booked on Airbnb, the argument went, were casual vacationers. They were college students backpacking around Europe during spring break, families looking for something other than a jam-packed room at Homewood Suites. Business travelers, by contrast, had more particular needs and were often tied to traditional hotels by their specific loyalty programs, such as the popular Starwood Preferred Guest.

The hotel industry largely clung to this view despite mounting evidence of the Airbnb threat: data from Bank of America Merrill Lynch showing Airbnb made up between 5% and 7% of hotel demand in big US cities; a survey from Goldman Sachs finding people who stayed in Airbnb once were likely to prefer it in the future; a report from Certify that said business travel spending on Airbnb grew 261% in the US and 249% internationally in 2015; and Airbnb’s valuation surpassing the market capitalization of every major hotel company.

Airbnb for Business isn’t that big yet. From July 2015 to January 2016, just 50,000 employees of some 5,000 companies used it to complete bookings, a sliver of the 80 million nights Airbnb was thought to book across its platform in 2015. But partnerships with AmEX GBT, BCD Travel, and Carlson Wagonlit Travel show that Airbnb for Business, if still young, is on its way to being taken seriously by the corporate community. It’s time for hotels to start doing the same.

home our picks popular latest obsessions search