Ok, I’ll admit it.
I rose my eyebrow just a bit when I saw the WSJ article about AirBnB‘s surprising projected evaluation for $10B, which would put it ahead of some pretty established lodging companies like Hyatt Hotels.
But in effect, I shouldn’t be all that surprised. In school we studied how hospitality trends have been shifting over the last few decades in favor for smaller properties that offer unique, often less classical, experiences to a rising niche market – the young, working professional. It’s a market that grew up with the internet and consists of adventure- and experience-seeking millennials who are sick of the same vacation spots their parents dragged them to every summer. And how has the hospitality industry responded? Well, I think the article says it all…
Of course I don’t think this means an end to any sector of the industry as we know it. There will always be (and for the sake of tradition, should always be) a place for the stiff elegance of a Four Seasons and the cater-to-your-every-whim service mentality of a Ritz Carlton. And on the other hand, I wouldn’t make such strides in saying that the industry can afford many concepts like AirBnB, or it’s more experienced cousin, the free-lodging leader, CouchSurfing. But there is something to be said for the surge of concepts introduced by hotel giants like Starwood (Aloft), InterContinental (Hotel Indigo), and Hyatt (Hyatt House) that seem to target a new value-consciousness that hinges on unique, quirky, localized guest experience, and less on the frills of butler gloves and pillow-mints.
So where am I going with this? Well, back to the eyebrow and how I wasn’t surprised about the article. I recently launched a new entrepreneurial endeavor, SAYHELLO Creative, a branding, translation, and strategy firm for small hotels and restaurants in Italy. Basically I design logos, build websites, and help craft social media marketing strategies, targeting rural communities with B&Bs, vacation villas, restaurants, and the new hill town lodging craze, the albergo diffuso (scattered hotel) where hotel rooms are dispersed in different houses within a small village. The properties you’ll find in some of these towns are unbelievably amazing: guest rooms built into Tufa caves; rooms with an unreal views of snow-capped mountains or the sapphire-blue coast; rural country homes where 35€ a night buys you a private room, three home-made-from-scratch meals, and the company of the owner who will take you around and give you the local’s grand tour. But if you don’t live near the town (or speak Italian) you would never know these places exist. If they have a website, it’s not one you’d give explore for very long (i.e. it’s sketchy). And if they don’t they’re probably relying on an OTA that will keep 10-15% of your 35€.
The business of the small lodging concept works in the micro-economic environment of these hill towns, and efficient management of them could stimulate the town itself relieving some of the pressures from the ongoing European economic crisis which has particularly effected these already struggling small towns. So in the spirit of my millennial-ism, I’m offering services that will connect their properties to the growing market that will appreciate them.
In conclusion, I’m happy for AirBnB. And not just because 2 of the founders went to my graduate school alma mater. But the article gave me some confirmation in what I’m doing, and that what we see happening in our industry can finally be measured against the established giants. So is this the beginning to a resurgence of the good ol’ BnB? I don’t know, but it just might raise a few eyebrows.