Hotels go for home-rental market

DALLAS • Hotels are unlocking new room for growth by doing what home-sharing rivals like Airbnb do - provide a chance to bypass a standardised hotel room and live like a local resident.

Hotels are beginning to get into the private home-rental market, mostly at the high end.

The hotel companies say their private lodgings are vetted, outfitted and maintained to hotel standards.

In addition, services at their lodgings are provided by company employees rather than home owners.

Hotel companies were "in a bit of denial" about competition from Airbnb, said Mr Makarand Mody, assistant professor of hospitality marketing at Boston University.

"Now, they see it's the same travellers, just choosing different accommodation based on the occasion or situation."

Guests who stay in a hotel for a business trip may prefer an apartment in an interesting neighbourhood for family vacations.

Mr Mody said: "If I'm a Marriott customer, Marriott wants me to be able to find all my lodging needs on its website, whether it's a business trip or family reunion."

AccorHotels, which operates hotels and other properties in 100 countries, has entered the home-sharing market over the past two years by acquiring companies.

In 2016, it bought Onefinestay, which was founded in London in 2010 and rents upscale private homes and apartments.

Accor has also snapped up Squarebreak, which offers home rentals across a wider price spectrum, and Travelkeys, which manages vacation properties such as 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 Mr Javier Cedillo-Espin, chief executive of Onefinestay.

The company is adding properties in Europe, Asia, Australia, the Caribbean and Hawaii, he added. "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 an island in the Caribbean, is faster and less expensive than building a hotel.

Mr 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 has taken a minority investment stake in Oasis, which rents out 2,000 homes in 20 cities.

The goal is to "serve high-end travellers across more dimensions of their lives", Mr James Francque, head of transactions at Hyatt, said.

Marriott International 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.

Entering the home-sharing market is not without risks for the hotel industry. 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, said Ms Cathy Enz, a professor at Cornell University's School of Hotel Administration.

NYTIMES

A version of this article appeared in the print edition of The Straits Times on July 04, 2018, with the headline 'Hotels go for home-rental market'. Print Edition | Subscribe