Blurring Lines, Hotels Get Into the Home-Sharing Business

Hotels largely stood by as home sharing companies like Airbnb began offering travelers a chance to bypass a standardized hotel room and, instead, live like a local.

But hotels are no longer standing by. In fact, they are beginning to get into the private home-rental market themselves, mostly at the high end — but with a difference. They say they can consistently provide service that is up to hotel standards.

Most home sharing guests leave positive reviews of their experiences, but when they do complain, it is often about cleanliness, last-minute cancellations by the host, problems with check-in or an unmet need at the property they have rented. The hotel companies say their private lodgings are vetted, outfitted and maintained to hotel standards. In addition, the hotels say, services at their lodgings are provided by company employees rather than homeowners.

Hotel companies were “in bit of denial” about competition from Airbnb, said Makarand Mody, assistant professor of hospitality marketing at Boston University. “Now, they see it’s the same travelers, just choosing different accommodations based on the occasion or situation.” Guests who stay in a hotel for a business trip may prefer a multi-bedroom apartment in an interesting neighborhood for family vacations, rather than connecting hotel rooms.

Adding private home rental is a way to capture more of the customers’ total travel spending, Mody said. “If I’m a Marriott customer, Marriott wants me to be able to find all my lodging needs on their website,” he said, “whether it’s a business trip or family reunion.” It is only natural, he said, for hotel portfolios to include a new type of accommodation that the market wants.

AccorHotels, which operates hotels and other properties in 100 countries, has entered the home sharing market over the past two years by acquiring companies already operating there. In 2016 it bought Onefinestay, which was founded in London in 2010 and rents upscale private homes and apartments. Accor has also purchased Squarebreak, which offers home rentals across a wider price spectrum, and Travelkeys, which manages vacation properties, like condominiums at beach resorts. The properties all offer check-in with a company employee, 24-hour support services, professional cleaning and hotel-style toiletries. Private home rental is complementary to hotel offerings, said Javier Cedillo-Espin, chief executive of Onefinestay.

The company is actively adding properties in Europe, Asia, Australia, the Caribbean and Hawaii, Cedillo-Espin said. “As a customer told me, ‘Give me more destinations and I will stay with you more times,'” he said. “That’s the model we’re going for.”

Adding private homes to the Accor portfolio also allows the company to test and learn about new markets. Contracting homes to rent in a new area, like a small island in the Caribbean, is faster and less expensive than building a hotel, Cedillo-Espin said. “It’s a way to understand the market, see who the target customer is and get a feel for the future of the area.”

Hyatt Hotels Corp. has taken a minority investment stake in Oasis, which rents out 2,000 homes in 20 cities. The goal is to “serve high-end travelers across more dimensions of their lives,” said James Francque, head of transactions at Hyatt.

Local staff at Oasis properties, called sidekicks, act as registration desk, bellhop and concierge, meeting guests at the property to check them in, showing them the amenities on site and offering advice on local attractions and restaurants. Oasis’ homepage displays the Hyatt brand, and World of Hyatt loyalty program members can earn or redeem points on Oasis stays. The partnership with Oasis also offers Hyatt guests some options in cities or neighborhoods that currently lack Hyatt hotels, Francque said.

Marriott International Inc. recently started a six-month experiment in London with about 200 homes managed by HostMaker. The homes are grouped with the Tribute Portfolio Hotels collection, which Marriott acquired from Starwood in 2016. The Tribute Portfolio Homes, as they are called, offer personal check-in, professional cleaning services and on-call service help, and meet a list of safety and security standards. Homeowners are offered advice on how to design their properties to improve the guest experience.

A curated and managed collection of homes can help travelers who do not always delve into the fine print or know all the questions to ask, said Cathy Enz, a professor at Cornell University’s School of Hotel Administration. A female college student of hers, who had rented an Airbnb for herself this summer during an internship in Los Angeles, was aghast, she said, to learn that several male guests would also be living there during her stay.

“The description didn’t offer any clue that there might be other people staying in the apartment,” Enz said.

The Oasis website promises to offer “only good surprises.” Private home rental is an exciting opportunity for the industry, Enz said. Hotel companies are well-positioned to offer the combination of a custom, authentic, local experience and the consistent services that hotel customers expect. “Travelers staying in private homes still want easy check-in, a clean place and someone to fix any problems immediately,” she said, and hotel companies are expert in the “hospitality systems, standards, mechanisms and infrastructure to take care of them.”

The hotels are not the first to rent and service furnished lodgings. AKA owns 11 buildings in urban centers, and, it says, has rented furnished apartments with hotel amenities for over a decade to “marry a luxury hotel with a high-end condominium.”

Airbnb has been making changes to deal with the concerns that come when renting a stranger’s home. In February, it started Airbnb Plus, a set of 2,000 listings in 13 cities that have been inspected by a staff member to meet a set of 100 requirements, like minimum Wi-Fi speeds and strong water pressure. The property’s hosts also need to have high ratings for their lodgings to be considered for Airbnb Plus. The company has also named 400,000 “superhosts” who have high overall ratings and high ratings for responsiveness from former guests. They also have to have been a host at least 10 times a year and have never canceled without an extenuating circumstance.

Entering the home-sharing market is not without its risks for the hotel industry. “Our guests may not end up seeing enough value in it for us to focus on home sharing,” Francque, of Hyatt, said.

It is also not clear how to best expand the business or how to make it profitable. Managing the safety, quality and cleanliness of thousands of homes in disparate areas is far more complex than managing sets of similar hotel rooms under one roof, Enz said.

Francque agreed. “It’s a tough model,” he said, especially as travelers continue to change what they are looking for. “We want it to be efficient and high touch.”