Marriott International has become the first major hotel company to launch its own home rental platform, taking aim at the business at the heart of Airbnb’s success.
The world’s largest hotel operator will offer more than 2,000 homes in 100 destinations across Europe, the US and the Caribbean on its new Homes & Villas platform, and comes just as Airbnb pushes further into the hotel industry ahead of an expected initial public offering.
Stephanie Linnartz, Marriott’s chief commercial officer, said the platform reflected an “ongoing commitment to innovation as consumer travel needs evolve”. It will give customers the chance to use the “space and amenities of a home backed by a trusted travel company”, she added.
Homes & Villas will come under Marriott’s recently relaunched “Bonvoy” loyalty scheme, which aims to cement a more direct relationship with customers. The move by Marriott comes just weeks after Airbnb made a succession of acquisitions in the hotel sector.
In March, the tech company, which was valued at $31bn in its latest fundraising in 2017, acquired boutique hotel booking site, HotelTonight. Earlier this month, it took a stake in Indian hotel franchise, Oyo Hotels & Homes to extend its reach in Asia.
Until Marriott’s home rental programme, much of the effort of the world’s biggest hotel groups in countering online competition has been to improve their customer loyalty programmes. Groups including InterContinental Hotels and Accor have either improved or relaunched their loyalty schemes, including offering more enticing benefits such as free rooms and tickets to events.
Accor and Hyatt have both introduced home rental brands but only through acquisitions. Accor only added Onefinestay to its points scheme two years after it bought the brand.
US consumers spent more on Airbnb last year than they did on either Hilton or InterContinental Hotels, according to Second Measure, which analyses credit and debit card transactions.
Customer retention was also stronger at Airbnb, where 40 per cent of customers who use the platform in 2017 did again last year, the research found. By contrast, the percentage of consumers who booked again a year after their first stay at Marriott, Hilton and IHG has fallen between 24 and 29 per cent in the past six years.
Liam Brown, Marriott’s president of Europe, the Middle East and Africa, said that loyalty schemes are a “critical part” of the company’s strategy, enabling it “to bind our guests as close to us as we possibly can”.
The stakes are high for the $539bn hotel industry because loyal customers are typically more valuable ones. Although such programmes have long been a key battleground to win over customers, Airbnb’s push into the hotel industry has injected extra urgency into the revamps.
Richard Clark, an analyst at Bernstein, warned that hotel brands needed to find a way to make their points more relevant to those who travelled less often and did not build up enough points to cover a night at a hotel.
Despite hoteliers efforts, Keith Barr, chief executive of IHG, cautioned “the average person has two and a half loyalty cards in their wallet,” so “owning” a customer was not possible. Instead “it’s about being really pragmatic and saying who are the customers that I can be first choice with on every occasion”.