Home-share companies are expanding into the hotel industry, it is becoming increasingly difficult for hotels to compete. Marriott International combatted the overtake by joining the competition.
The hotel chain confirmed its plans to expand their company and create a new home-rental business named Homes and Villas by Marriott International aimed at targeting Airbnb and other home-share companies.
Marriott International will offer its guests accommodations in approximately 2,000 upscale homes throughout 100 different locations across the United States, Europe and Latin America.
The listings vary from a luxury one-bedroom houses for $200 a night to a castle in Ireland for $10,000 a night. The offer stands protected by the brand name and its reputation as one of the world’s largest hotel groups, making the move a surefire benefit tactic.
However, it is still threatened by the established leader of the short-term rental industry, Airbnb, who has made sure that new market entrants do not have an easy road to success.
Marriott International is not the first to have attempted this move. Back in 2016, Accor S.A. purchased Onefinestay, a London-based luxury home-share company. That acquisition ended in a $288 million write-down in 2018.
Hyatt Hotels shared the experience in 2017 when its premeditated investment in another luxury-home rental group, Oasis Collections, resulted in a $22 million impairment charge in 2018.
Airbnb has made its own move to ensure its dominance in the home-share industry stays secure by making their own expansion towards luxury homes. In 2017, Airbnb bought Luxury Retreats which is currently offering almost 5,000 listings.
Recently, Airbnb has announced its partnership with RXR Realty LLC to create 200 apartment-style luxury suites within 10 floors of the 75 Rockefeller Plaza in New York. Airbnb’s focus on luxury listings has made it difficult for Marriott International to pitch something new into the luxury rental option.
Since its founding in 2008, Airbnb and other home-share companies have erupted into the hospitality scene by offering an alternative way of living when traveling.
The offer of having all the amenities of a home when away from home excited customers who were ready for a change from the traditional hotel experience.
Marriott International’s attempt to innovate their company shows a good step towards the future and with the right cards, they can establish themselves as a home away from home.
