Marriott didn’t think of Airbnb and the Homeshare market as much competition but has since launched a Homeshare program. It only goes to prove that their leadership is tone deaf, out of touch and still just doesn’t get it.
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Marriott Hasn’t Thought Much of Airbnb in the Past
Marriott’s CEO hasn’t been shy that he doesn’t think much of Airbnb. Well, actually, according to his daughter he has nothing to worry about – he clearly hasn’t looked into the matter much himself. Here’s the New York Times take on the matter following CEO Sorenson’s comments on stage at an event.
“Mr. Sorenson, Marriott’s chief executive, said he had never used Airbnb to book lodging, but his daughter has. She told him he had nothing to worry about.”
He isn’t the only executive at Marriott that feels that way.
“Any comparison stretches only so far, said Tina Edmundson, Marriott’s global brand officer. She has sampled Airbnb, twice. How did she like it? “It was O.K.,” she said, scrunching up her face a little. “It was fine.”
They just haven’t taken Airbnb seriously to this point and that has guided their awfully miscalculated approach to homesharing.
Slanted Toward Ultra-Luxury Properties
Run a search on Marriott’s new Homes and Villas site for Cabo. Here you go, I’ll make it easy for you. Look at those values!
I get it, they don’t want to sell extra bedrooms in apartments they are focusing on premium homes, after all, it’s Homes & “Villas.” Fine. But there is the premium market and then there is just-for-celebrities premium. When you look at the Cabo search results, $1,300/nt before taxes, fees, and cleaning look like a steal compared to most of the properties available from between $4,000-13,000/nt. The market for $10,000/nt+ properties is so limited that I’m not sure a dedicated website even makes sense to operate, and for Marriott to go in this direction is bizarre.
Fails to Capture Airbnb Market
Even on the rare occasion that Marriott has a property that might otherwise compete with a traditional Airbnb property like this one, it still seems that they miss the boat. With no offense to the homeowners, even in peak summer I just can’t see spending $2600 for their property for a week.
At a comparable Airbnb that I find to be more updated and a better value, the cost is half the price. But unlike the Homes & Villas properties, Airbnb has tons offered above and below this price point. The above property from Homes & Villas was the cheapest available for the Charleston, South Carolina market when I searched. Other markets have some that are cheaper, but they are sparse and less impressive than the less expensive Airbnb choices.
It’s not just the cost that Marriott needs to improve to compete, it’s also the value. The properties are worse with Homes & Villas for a serious premium (in some cases more than twice the cost). You can get great value at less than $100, or $1,500 – it depends on what you’re getting for your money, it’s not just price.
Just Another Example of Marriott’s Tone Deaf and Clueless Management
Marriott’s management didn’t understand Airbnb and the appeal when the CEO’s daughter told him that they have nothing to worry about. Maybe he should look at Airbnb’s latest valuation (estimated at $35-38 bn) compared to Marriott’s current market cap of $43 bn and consider whether they are closer to rivals than an afterthought. Marriott considers Hilton a peer and they have a market cap of only $25 bn. By comparison, IHG (who hates their elites) has a property volume on par with Marriott yet a market cap of just under $12bn. Airbnb is far closer to a Marriott competitor than traditional hotel brands if considering the metrics of valuation and coverage.
Marriott clearly sees that homesharing is a market they should enter. Perhaps they have found a genuine gap in the market, but to say that Airbnb isn’t a threat (though they are nearly the same size business), then to introduce a similar offering shows they no longer believe that. It’s reminiscent of Blockbuster dismissing Netflix on an investor conference call.
However, the reason that Airbnb is successful isn’t solely because they have amazing premium properties customers can book, and it’s not just because they cater to the lower end of the market – it’s because they offer what their customers want. When searching locations (Marriott has said there will be more soon than there are now), the properties in major cities only come into play where they would not compete with a Marriott hotel. That’s not to say they only offer in markets where Marriott doesn’t have a location – Cabo proves that wrong.
They are selling against their own new product by trying to sell their old product. For example, most prominently under the property description is a list of “Home Features” which really demonstrates what the property doesn’t have. How many homestays do you know that have a butler or concierge service generally? This is designed to push guests back to Marriott properties. Airbnb doesn’t tell me what a property doesn’t offer unless I specify that it is important to me.
Conclusion
Marriott delivering a premium-only Airbnb competitor is tone deaf and further underscores that they don’t know why people book Airbnb properties and frankly, don’t care. While I don’t believe that Airbnb will make hotels irrelevant, if Marriott can’t find a way to connect customer needs and wants (both current, future, and those of other brands) to their senior leadership making these foolish choices, they will Bonvoy their company and suffer the fate of Blockbuster while the rest of the world watches Netflix and chills.
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I recently just ended a stay at a Tribute Portfolio Homes / Hostmaker property in London that I booked through Marriott. The property was hands down garbage compared to Airbnb. Marriott should worry. Hostmaker did nothing to help the issue and now I’m going to try to sort it out with Marriott. Hopefully their own Homes and Villas are better than their partnership with Hostmaker.
Great article, I totally agree. As a 5+year SPG Platinum member, and a Marriott Platinum member before that, I started staying at AirBNBs exclusively in the beginning of 2019, and have NEVER looked back. I have 0 paid nights this year at Marriott properties, and I could not be happied. Marriott destroyed SPG elites, and they have no idea the value of AirBNB. Nights in 2019 for me Marriott:3, AirBNB: 40+
Nicely written. The only point where I’d disagree is the listing things that a property doesn’t have. As one example, it’s nice to know if your rental in the keys is waterfront or not. The rest is right on. I’d hope that Marriott would make substantial improvements in the interest of customer service, but they’ve shown time and again that they don’t care about the customer, so it will likely require a financial beat down before things change.
Recent stay in Honolulu. Marriott $197 per night for 1 bedroom suite, microwave & coffee maker included and $23 per day for parking. AirBnB just down the street in Waikiki was $141 per night, full kitchen, beach towels, balcony, 2 bedrooms, and free parking. Yep, Marriott and all other hotel chains should be concerned.
You are only focusing on one tiny segment of the Marriott model. I don’t think you truly understand how a mega hotel chain creates the loyal customers they have.
How so?
Because you seem to suggest that the traveling public in general or Marriott customers specifically only want value properties.
I’m an ambassador level member with Marriott and have done the vacation rental thing a few times. It would NEVER come close to replacing Marriott properties for me. Would I book a home through their new platform in the future? Possibly. Would I he more likely to book a vacation rental now that I can through Marriott? A little bit, yeah.
You seem to think Marriott isn’t offering what their customers want, but Marriott has been in the home sharing biz for a few years, although previously their offerings we’re limited even more (London and a few other destinations iirc). It seems they dipped their toes in and are now expanding their offerings based upon what they saw.
Stan is right. You’re writing this article like a jilted lover. Did you get fired in college from a night audit job at a Marriott?
Lol, no. I wasn’t even a loyalist to them prior to SPG and only SPG platinum for a year or two. I’ve stayed in exactly one Marriott property in the last 12 months. If they want to Bonvoy their business, it’s fine by me, it’s just their consistently odd business choices that interest me.
I think you missed the part where I wrote that value could come at $150/nt or at $1500/nt and that it was more dependent on what you’re getting than the price.
But there are premium properties that are less than $4,000/nt and Marriott doesn’t seem to see that. Search Manchester or Edinburgh – one listing each, both castles so high they don’t even list the price.
By the same token, you’re suggesting that I don’t know Marriott’s market because I’m only focused on value properties, but I’d counter that you’re surprisingly focused on solely the premium product. The chain is predominantly comprised of Courtyards, TownePlace and Fairfields that dot the map with full service hotels in limited locations.
I’m not saying I know Marriott’s customer better than you. I’m saying Marriott knows their customer better than you. This effort isn’t something they just decided to do yesterday. It is the result of a multi year process and for all you know they have the exact sort of properties you want in the pipe, but they are rolling out in a slow deliberate process, or would you rather haphazard, rushed, all in solutions?
Lastly, it’s obvious that this offering isn’t the end all, be all. But what you seem to be missing is that the value is in Marriott. Not the $150 or $1500 a night property. So Marriott customers would be getting EXACTLY what they want – Marriott. By your own words, that doesn’t really describe you, so it should be obvious having more options as a Marriott customer doesn’t appeal to you. I don’t seem the need for the angst though. Ordinarily I wouldn’t go there, but it seems like I’m not the only one picking up that vibe.
I think a good fair bit of the Bonvoy members have been dissatisfied with their experience, inconsistencies with brands, benefits, and hotels being permitted to make their own rules. I’m not on my own there, in fact, I am not really even one of the plaintiffs given that I have abandoned my Platinum status and stayed kist one night in their esteemed presence. Customer service at the brand hasn’t been sterling either, examples are widely available.
My point is simply that the brand that dismissed Airbnb as a non-threat has decided to engage a fraction of their membership at their very top of the market with almost laughable prices and value that is insulting to discerning guests. When better properties can be found for half the price, in some cases even less, perhaps there is a line around the block of loyal Marriott customers waiting to pay $20k/night in Cabo because it’s offered by Marriott and not Airbnb, but I suspect this isn’t the case.
It’s not that I have an ax to grind with Marriott, I personally don’t have a dog in the fight. But for readers that are not infinitely loyal to the brand, for those that may be choosing a hotel chain to which they can trust their loyalty, I don’t think Marriott any longer fits that bill. The launch of Homes & Villas is a brazen admission of their lack of understanding of the thing that drives customer behavior and that is what the post was meant to describe. I apologize if I have failed to deliver that message.
I have used airbnb here in the States, in Canada and Europe since it began. Never have been disappointed. Even the pet-friendly properties are sparkling clean. I never choose the cheapest and if I can stay in a small town or resort area instead of a city, I do. One of my stays in Huntsville, Canada was a renovated 18tth century two story with three bedrooms, acres to hike and eggs benedict for breakfast. Cheek the feedback for your host, avoid apartment complexes, and never go for the cheapest….although I recently chose cheapest for the first time ever when cancelled out of Montreal due to flooding. Stayed in Magog instead. The location was gorgeous and waterfront AND $60/nite. Tempurpedic bed, movies on demand, full kitchen, multihead rainshower bath, huge sectional sofa and free use of a kayak. So I think I agree with the idea that Marriott is behind the times…I wouldn’t trade the wonderful privacy and elegant accommodations I have experienced through airbnb for any hotel room every again.
I don’t like Airbnb. It has had a terrible impact on rental affordability in many places, as owners/ investors seek a higher return…squeezing many people out of the rental market entirely. There are great swathes of Europe where there are very few locals living, as so much has been given over for Airbnb.
I thought about it for a condo I don’t use much, but decided against.
But I agree that Marriott is away with the fairies.
Paolo – I have had good luck with VRBO in Europe, maybe give them a try.
This article is a little bratty.
Care to elaborate?
Do you not think there is money to be made in luxury home rentals?
Of course there is, but it just seems strange that after denouncing the sector they come out with a competitor that serves such an abbreviated portion of the market, valuable or not.
Given the challenges they’ve had with the rest of the business, it just seems like yet another business segment they don’t understand.
Basically , the good economy has made travel for tourists ridiculously expensive, lax hotels are 200 a night plus $40 parking AND. A resort fee. Glad I have prepaid time shares .
I personally believe that you have not researched ALL hotel companies and each of their offerings to see what type of traveler they have been designed for. A seasoned traveller understands that each flag within a brand offers a different level of service. They all have their personal vibe.
I am a regular reader of your articles and find so many inaccuracies and comparisons that make no sense to those whose lives truly revolve around hospitality. I have been on both sides of this world. For many years, my working life required travel where I was in a different hotel 7 days a week. Every 3 months I had a break and was “home” for a week.
This experience has given me a much better look into the travel life that is often described by you. A guest’s stay experience should not be determined ONLY on their present status within that brand. EVERY guest should be treated as if they ARE at the top level in the loyalty program OR the brand wants them to be the next guest to get there. Of course, the comped perks are different. But I want to be welcomed and treated the same as ” I am special” Mr. Stewart. Not a personal slam to you but an example.
The final point I want to make is this: You don’t look old enough to have truly experienced enough in life – probably haven’t been employed in a hospitality career or an actual “job” where you have had to break a sweat just to deliver what a consumer believes they are entitled to. I could be wrong but without these experiences, I don’t believe you to be knowledgeable enough to accurately put pen to paper about this business. I challenge you to find a brand – any brand – that is willing to let you experience 30 days as an employee behind the desk of a hotel. I guarantee you will have a totally different perspective on not only the business but a different view of life.
If I am incorrect, I would to hear about it !
@Terri – You encouraged me to write back if you are incorrect so I want to set the record straight on a few of the comments you made.
You suggested that I have not fully researched ALL hotel chains and that’s correct, no one has, there are far too many to be an expert on all of them. However, for the last two years (longer for some programs) I have been top tier elite (not unpublished or revenue based) with IHG (Spire), Marriott (Titanium), Hyatt (Globalist), Hilton (Diamond), and Best Western (Diamond). I don’t know any other blogger (definitely not traditional travel writers) with an equally broad view at the major brands that represent more than 20,000 properties worldwide.
I welcome any specific inaccuracies (facts not opinions for which we disagree) in my posts as I aim to be as accurate as possible and will gladly correct. To your point regarding your life revolving around hospitality, it sounds like you have me beat but I am close behind at about 200 nights/year.
We agree that every guest should be treated like the hotel’s best customer, that’s how all service businesses should be focused.
You say I look too young in my photo but that photo (like a dating profile) is out of date… and I don’t plan on updating it. However, you’re incorrect that I don’t have the work experience you suggest is required. I worked frontline service jobs in restaurants for seven years starting at 16 when I was full time while in high school. I have worked every job in the restaurant business including managing one when I was just 18 – that meant dealing with irate customers (founded or unfounded) washing dishes, mopping floors, and jumping on the line to cook too. I have had other sweat related jobs since then and have several friends and family members that work for the very hotel chains I discuss on this blog. I have heard all the stories. I object, however, to the notion that I have to work at a hotel chain to comment on them. This is a new phenomenon not just in blog comments but in discussions, and on social media. That’s nonsense. You don’t have to be a chef to know a bad meal, nor a night audit at a hotel to be able to speak to the chain’s flawed policies. If that was the case, nearly every journalist (not saying a blogger is a journalist) would be unable to do their job. Even CEOs would be irresponsible to change company policies if they hadn’t worked that job. It’s an absurd notion and it needs to end.
But after all of that – what on earth does any of that have to do with Marriott’s tone-deaf launch of an Airbnb ‘competitor’?
Allow me to share my perspective from a marketing standpoint. Any company that would permit, approve and disseminate the “Bonvoy” brand campaign (complete with a moronic national TV spot showing someone potentially triggering an avalanche by shouting it from their ski lodge window—lol) is completely incompetent with regards to leadership.
So color me unsurprised at their ignorance of AirBNB’s potential to eat their lunch.
Ditto.
It’s almost as if Marriott wants this to fail so they can say ‘See? This model doesn’t work.’
Absurdly overpriced and seems to completely miss the point of homesharing vs. staying at a hotel. If I want a fairly isolated but high service/anodyne experience, I’ll find a fancy hotel. If I’d rather get a feel for the neighborhood by (sorta) living like a local, I’ll go with Airbnb.
@Dan – “It’s almost as if Marriott wants this to fail so they can say ‘See? This model doesn’t work.’”
This is exactly it.