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Can Marriott really beat Airbnb in the luxury home rentals market?

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INTERNET MARKETING NEWS

Can Marriott really beat Airbnb in the luxury home rentals market?

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A Marriott Homes & Villas property in Anguilla.

Marriott has added yet another product to its already teeming portfolio of 30 hotel brands, spanning 7,000 properties across 130 countries.

From next week, Homes & Villas will give travellers access to 2,000 premium and luxury homes in more than 100 destinations across the US, Europe, the Caribbean and Latin America. Expected to cost between $200 to $1,000 a night, these “highly-curated” homes include a cottage set in six acres of Californian wine country and an oceanfront villa in Anguilla, complete with a private beach and personal butler.

The hotel mega group believes its Homes & Villas product will “complement the core offerings of Marriott’s hotel portfolio”, adding close to 40 new “leisure destinations” to the mix.

Seemingly taking a swipe at Airbnb, vice-president of Homes & Villas, Jennifer Hsiech, says the new product will offer consumers a “seamless booking experience” that helps navigate the “increasingly complex and uncertain set of home rental choices.”

The business first trialled home rentals last year as part of a pilot in selected European cities. After discovering the average stay during the pilot was more than triple a typical hotel stay, Marriott is convinced its pitch to the premium home rental market is a winner.

While a move to sell home rentals through its Marriott Bonvoy loyalty app is already in the works, from next week any travellers searching on the Marriott website for a stay of three-plus nights, in a location where there is a luxury home, will be served links to Homes & Villas properties.

The hotel group is sure it can steal a march on rival Airbnb by offering premium homes from a “trusted travel company” tied into loyalty benefits. This is based on the insight that 90% of people who rented a home during the pilot phase were Marriott Bonvoy members.

READ MORE: Inside the launch of Marriott’s new loyalty programme

As with its fleet of hotels, Homes & Villas travellers will be able to earn loyalty points for every rental stay, which can be redeemed for exclusive experiences at their chosen property, from game nights and gourmet cooking to BBQs.

And with that Marriott may have thought it had the premium rental market all sewn up. The problem is that no sooner does the hotel mega chain make a move than news emerges Airbnb is poised to launch what it describes as a “new category of urban lodging”.

The home rental disruptor is planning to take over 10 floors of Rockefeller Plaza in Manhattan and turn them into 200 apartment-style suites with living rooms and kitchens, available exclusively through Airbnb.

The rooms have been designed to offer a “curated, authentic NYC experience” typically reserved for locals. The move into property also gives Airbnb a foothold in the New York market, where strict rules mean it is illegal to rent an apartment for less than 30 days without a permanent tenant present.

This is Airbnb’s latest move into the hotel market ahead of its hotly anticipated initial public offering (IPO) later this year, following the acquisition of booking platform Hotel Tonight in March.

It is clear that both Marriott and Airbnb are aggressively attempting to carve out a position in each other’s territories and both believe the premium end of the market is a fertile hunting ground.

However, there are problems. Marriott is adding yet another brand to an already crowded portfolio of hotels as diverse as the luxurious St Regis, millennial friendly Moxy and eco-chain Element. Is it really possible to cover all these bases and still deliver a great experience, even if you are the world’s largest hotel group?

For Airbnb there is a potential perception issue. Can the travel brand that invites you to ‘live like a local’ actually appeal to the modern luxury consumer in a city as competitive for hotel space as New York?

In Marriott’s case tying the new proposition to loyalty is a smart move as it gives existing customers an incentive to splash out on renting a home and then use their Bonvoy points to amplify the ‘experience’. Plus, unlike Airbnb, Marriott has already made a name for itself at the luxury end of the spectrum through existing brands such as Edition and The Ritz Carlton.

From a business perspective, rentals also represent an easier way to bring the Marriott brand to new locations, rather than incurring the cost of building a hotel.

Yet despite the rationale, it remains to be seen whether Marriott can win the battle for luxury and achieve cut through for its Homes & Villas brand in a fiercely competitive market cluttered with rivals all vying to stay one step ahead, while also ensuring it does not cannibalise its existing hotel chains in the process.



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