My Top 6 Posts of 2013

This has been an amazing year for the Words of Vikram blog. I remember publishing the first post on a beautiful day at Kaaawa Beach Park in Oahu on March 1, 2013 #nostalgia. Today, I am writing this recap from rainy Tokyo. Cue in Passenger by Iggy Pop.

In less than one year, the blog has welcomed visitors from over 120 countries and 1,870 cities worldwide. Thanks y’all! I am thankful for the readers. I also want to give special thanks to my subscribers. You encourage me to stay on top of the issues, and be accountable to my mission of being a catalyst for change without being boring!

Since I do not have comments enabled on my blog, I instead got some passionate emails. (These are great.) I have kept my promise of answering every single email. You’re welcome! I also got to do a few radio interviews. I’ll be on NPR in January. Next stop: TV. Then Hollywood.

Based on distribution, feedback, and analytics (thanks.,Google Analytics)… Here are the top 6 all-star articles ICYMI, plus some of my thoughts on why I think these posts generated interest and conversations.

1. How Airbnb Is Crushing Traditional Hotel Brands

The popularity of this one was truly unexpected. The Telegraph in the UK released some stats on Airbnb that reinforced my belief in its awesomeness, which led me to write this post. The head of hospitality for Airbnb then tweeted and shared my article, which was great. Some folks were not impressed, because they refuse to deal with the reality of today’s online world. Overall, I still think it’s a great list of items that brand hotels should start addressing right away.

2. It’s Time to Burst the Hotel SEO Bubble: What Hotels Really Need to Know

Search engine optimization has always been exciting and controversial. The massive change in how Google views travel websites is impacting hotels worldwide. But a lot of industry people are still caught up in the bubble, and in agency contracts that are out of sync with reality. RIP, Golden Age of SEO. Hello, 100% pay to play.

3. Biggest Myths About WordPress Perpetrated by Hotel Marketing Agencies

This was one of my personal favorites because it’s about WordPress, one of my favorite topics. I’m still waiting for the hotel industry to embrace it as the greatest open source publishing platform out there. Sadly, big box agencies and their pseudo experts love to bring it down. This article was my definitive list of reasons why hotels should embrace open source platforms like WordPress. Owning your online assets is Step 1 of a great online marketing strategy. Of course, the agency shills hated this article, but haters gonna hate, right?

4. RoomKey.com: Hotel Brands’ Misguided Attempt to Become an OTA

This was one of the highest-traffic articles for 2013. Roomkey has got to be one of the biggest collective disasters involving hotel brands in recent years. My article addressed the most fundamental flaws in its development and marketing strategy. There is definitely hope for Roomkey, but it is going to have to pivot (sorry for using an MBA term) big time! This would be a great turnaround project to work on. Meanwhile, look who is bidding on their brand name in Google. Is anybody even watching this site anymore?

Roomkey.com

5. What the Hotel Industry Can Learn From Heads in Beds

If you are in the hospitality business, you must read Jake’s book. (Yes, I am on a first-name basis with the author.) I don’t think anyone has written about the industry the way he has. It takes immense courage to lift the veil on an industry masked in so many layers. This blog post was the first one to jump from online to print. California Hotel & Lodging Association published this article in their annual resource guide. Thanks CH&LA! You deserve high praise for getting the word out on a great book.

6. Death by Data: How Misusing Hotel Analytics Data Can Hurt Your Revenue

This one was close to my heart, and it struck a chord with a lot of people. Many managers and owners are destroying their online presence due to their limited knowledge of how web analytics work today. Using a powerful tool like analytics to justify bad decisions is scary and is definitely hurting the hotel industry’s online revenue. This was my wake-up call for people in power to use smart analytics. I am happy to report that this was one of the most read and circulated articles of 2013.

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How Airbnb Is Crushing Traditional Hotel Brands

In April, I wrote one of my first ever articles about Airbnb’s impact on the hotel industy. It started as a response to the Euromonitor report highlighting how little impact it was going to have. I fully disagreed. While I did not have the numbers to prove it, I have always known that Airbnb’s impact was going to be HUGE based on the steps they were taking, and the rapidly changing needs of the global traveller.

In the few short months since my first article, Airbnb has released some super cool stats that prove what I have always believed: they are changing the hospitality business.

• They created $632 million in economic activity just in New York in one year, and they supported 4,580 jobs throughout the five boroughs.
• They have 500,000 properties worldwide.
• They have found accommodation for 9 million guests worldwide (5 million in just the past nine months).
• Over 150,000 guests stay in one of its members’ properties every night.
• They expect to pass InterContinental Hotels Group and Hilton Worldwide to become the globe’s largest hotelier next year.

This is big news for the hospitality business and hotel brands specifically. The lodging industry needs to brace itself if it hasn’t already.

So, how are they doing so well so quickly? Here’s how they went from startup to market leader in just 5 years.

Good Reviews Trump Brand Loyalty

Over the past few years, I have noticed a very interesting trend: People do not care as much as they used to about hotel brand when they plan their travel. What they care about is a hotel’s location, value, and reviews. Review websites like TripAdvisor have changed the game. Independent hotels that provide exceptional service and value get great reviews on TripAdvisor, and start moving to the top-ranked spots in their cities. This leads to a tremendous increase in brand name searches conducted by travelers who start researching on TripAdvisor and then move to Google search. In the end, this review-driven ecosystem funnels more revenue to hotels that are treating guests well.

To make things worse for hotel brands, Airbnb is spurning an army of independent hoteliers. Brand new entrepreneurs with fresh ideas and energy are surging into the market. All of these new travel entrepreneurs have the three things travelers are looking for – location, service and value. AND, these entrepreneurs are rated within the Airbnb ecosystem by verified users. This is genius! Why? Because unlike traditional and brand hotels who rely on TripAdvisor, Airbnb closes the loop by allowing its users to trustfully book and review their stay. Transparency is a huge turn-on for today’s travel planner. Coupled with general apathy on the part of the big hotel brands, these moves make Airbnb a darling among smart travellers worldwide.

Brands Devalue Themselves

Wise folks have argued that one should not bite the hand that feeds you. There are still legions of hotel loyalty point fanatics (ie, big spenders) out there. Most of them use points accumulated during business travel to take personal/family holidays. Yet every major hotel brand (including Hilton, Starwood, Marriott and Hyatt) has devalued its loyalty point’s value in the past 12 months. Basically, it is taking you a lot more points to purchase “free” room nights. Hilton in particular was pretty harsh on its most loyal customers this year with a brazen reduction in the value of their points. Marriott has taken it to a whole new level by creating a brand new top tier called “Category 9”and updating the category level for over a third of their properties around the world! The extra effort business travellers were making to stay loyal to their hotel brand is quickly losing its value.

This is an extremely shortsighted approach to profitability. It might look great on a balance sheet today, but it is setting up the brands for huge losses in the very near future. This is opening a nice window for Airbnb, as point-obsessed business travellers learn to seek better value via alternative lodging options. I can only imagine what big plans Airbnb has in store for their loyal users.

Airbnb Builds Trust & Community

Another area where Airbnb excels is in building trust and establishing personal connections. The hotel industry has never been particularly transparent. A lot of fancy adjectives may find their way onto a hotel’s user-unfriendly website in the name of marketing. Until the year 2000, there was no place for people to go to find out the truth. This huge vacuum was filled by TripAdvisor’s launch. Since then it has been making well-deserved millions for lifting the veil on an entire industry. Airbnb, unlike the big hotel brand names, is very open about everything. Hosts and their guests communicate before the booking, during the research phase, during the availability search, upon stay confirmation, before arrival – often offering concierge style advice, at check-in (often in person!), and even post check-out.

The host is the brand, and you have access to him at every stage of your travel experience. This is a huge reason why Airbnb has seen tremendous success. Meanwhile, hotel brands are chasing rankings on Google, fighting online travel agents (OTA’s), and trying to use online strategies to boost their reviews, rankings and authenticity on TripAdvisor and other review websites. On Airbnb, there are no ‘fake’ reviews because online reviews were not an afterthought. Expectations, questions and answers are exchanged between host and guest long before the check-in ever happens. This is how they make meaningful connections. Do I remember the guy who checked me into my last hotel room? Nope. Do I remember my last Airbnb host? You bet I do.

Online Marketing Done Right

There is a lot being said about the right way to do online marketing. Hotel brands are struggling to keep up with Google and the OTA’s, who are both moving quickly and with a clear agenda of making money. Meanwhile, the big hotel brand marketing machine is blithely playing Goliath to Airbnb’s David. Every time a hotel brand does a press release stating that they would like to “target the millennial traveler,” it ironically makes the millennial traveller cringe. Hyperbole and buzzword marketing is so 1999. Talking like real people, showing your value, and showcasing your location is the new black.

A classic example of how Airbnb has captured the imagination of an entire generation is their amazing city neighborhood guides. This is the way to reach out to young travellers that are looking to explore the world. The Airbnb online marketing plan is entirely based on location, value and connection. Meanwhile, hotel brands are too caught up in their own hype, are busy funding bad experiments like Roomkey.com, or worse…counting on magical “Big Data” to save them.

Conclusion

For decades, hotel brands have been riding the inertia that was built by big demand, lack of options, and brand loyalty. The reality today is:

  1. Demand took huge hits in the past decade (9/11, global financial meltdown) and can’t be counted on as a strategy.
  2. There are a plethora of lodging options and entrepreneurs thanks to Airbnb.
  3. We have to acknowledge that Airbnb is rapidly becoming the biggest hospitality brand in the world.

And they are just starting. In today’s travel marketplace, brand transparency powered by innovative technology is what the people want. Give travellers the experience they are looking for: value, service, a great user interface, personal global connections, and social sharing. Mix these together, and you have a success story called Airbnb.

 

It’s Time to Burst the Hotel SEO Bubble: What Hotels Really Need to Know

Hotel search engine optimization (SEO) is one of the most debated online marketing techniques in our industry. That’s because its efficacy is hard to prove, and techniques have to constantly change to outmaneuver Google’s updates. Google maintains strict control and secrecy about how they manage and update their search engine results pages. Of course, there are guidelines posted on their Webmaster Central product, and a few utterances here and there. This leaves the floor open for some serious speculation… Cue in the SEO “experts.” I am not an SEO expert, nor have I played one on TV. But I am definitely a trained SEO observer who has been in the industry for a decade, and a huge fan of web analytics and data-driven decision making.

It’s sad to see articles like this circulated in the hotel industry: “Google and SEO: what you should do, should not do, penguin, panic, panda, algorithm,” followed by “please hire us, we have the answer.”  These articles are usually written by the SEO Manager of a big WalMart-style hotel marketing agency. Agencies also circulate baseless, misleading and ridiculous statistics, like:  “56% of hotel revenue is from SEO.”

On the other side, there is a counter-culture saying that SEO is dead and has been dead for a while. Both camps are wrong. Extreme views and made-up statistics like these are harmful to the hotel industry.

So, when did it all get out of hand? What should hotels and travel websites really be doing to improve their Google organic (SEO) revenue? Let’s start by taking a look back …way back.

The Golden Age of Hotel SEO/Remember the Titans?

There was a Golden Age of Hotel SEO? You better believe it! It was 2000-2010. I vividly remember it. A hotel could not only get placement right on the very  top left of the screen for hyper-competitive terms like “hotels in NYC” or “hotels in London,” but could also get  hundreds of thousands of visits and millions of dollars in revenue. There were no maps, no carousels, and no hotel finders.

Now guess who really capitalized on SEO during this Golden Age. If you guessed hotel brands, you are wrong. OTAs like Expedia.com and Hotels.com ruled in the US; Booking.com in Europe made millions. (Their success continues to this day.) Brands like Hilton, Marriott, Starwood and IHG, to name a few, were actually busy shutting down their property-level websites. Hotel marketing types refused to believe in online marketing; they were so caught up in their own hype that they missed the boat to the greatest hotel revenue party on the planet. It was a blunder that is painful for me to bring up, but for the sake of history I must.

Fast forward to today. OTAs still rule Google and rank for some heavy-hitting terms. However, Google any “hotel + city name” term and you will no longer see an independent hotel, or a brand site,  show up on the top half of your screen. Google has taken a machete to the traditional organic results page to push the products that make them money. Now it’s all about the Benjamins (Google Map Ads, Google Hotel Finder Ads, and good old PPC).

2013 might not be the Golden Age of Hotel SEO, but there is much you can do. “Optimize everything” is my philosophy. Here are some things  you need to consider if you are serious about improving your hotel’s website’s organic rankings and online revenue.

1. Open Source or Bust

Owning your brand is bigger then SEO, always has been and always will be. There is one real estate market that is booming in marketing land: it’s called making and owning your brand. Renting your hotel website — your most profitable direct revenue channel — needs to be dropped like a bad habit (or hot potato, you choose). Don’t give away the keys to your online home by building it on a closed proprietary CMS (content management system) that you can’t control, remove or optimize at will.

Instead, get a cool design and then pick any open source CMS (WordPress, Joomla, Drupal) to build it on. An army of developers backs these programs when it comes to Google SEO compatibility. There are also some amazing SEO plugins that will help you get back control of your SEO destiny. A lot of them tie into Google Webmaster Central and help your website maintain up-to-date Google compliance. Bonus feature: You will always own your content, photos, website and reputation. How cool is that! Double bonus: You do not lose your entire online footprint with Google every time you redesign or switch website design vendors. #winning

2. Content Is King in the Google Galaxy

There has never been a better time to invest in quality content. Hotel and travel websites looking for organic traffic need to move away from the trend of image-rich and content-poor websites.

In case you’re wondering why so many hotel websites look so similar (and perform so poorly), here’s the formula:

agency’s website template + agency’s regional sales goals + proprietary CMS + sweatshop content writers

= 1000’s of zombie clone websites

Quality images are crucial for hotel sites, but you also have to give people and search engines something nice to read. Hotel websites stuffed with keywords and faux packages have been dropping fast since the 2011 Panda update. Updates are continuing to target websites with low-quality content. Don’t let your website be average, boring and stuffed with meaningless adjectives. Participate in content generation, and say things about your hotel that really matter to your guests.

3. Aim Smaller and More Specific

You have to move beyond city name + hotel keywords like “hotels in London.” Even if you rank for those keywords (good luck!), the referral traffic is diminishing rapidly.

It’s time to pay attention to Latent Semantic Indexing, which simply means that people are going to search for the same thing in different ways. Target terms travelers use to describe your hotel. Why are people traveling to your location? What are they looking to do? What do they like about your property? Look into your website analytics to find out what search terms are bringing visitors to your website and your blog. Data is available to you through Google Analytics, Google Webmaster Tools and Google AdWords Keyword Tool. Please use it!

To put it another way, always try to solve a problem or answer a question for your guests. Focus on answering the questions they want answered, and you will no longer be a slave to keywords with high volume, diminishing traffic and poor conversion.

4. Google+ Is Not Just an Option, It’s the Law

For a while I was convinced that Google+ was Google’s sour grapes product, because they had failed to be a social network. Of course, Google is way too smart to worry about any grapes. Finally, after seeing how they rolled maps, local and reviews into G+, I get it. Millions of business owners worldwide now have to go and get a G+ account, not to mention read ridiculous and boring articles about why your hotel, blah blah, must use Google+, blah blah, we can help.”

A name and a face to go with content is being required. That’s the game. Google Authorship isn’t a suggestion, it’s a necessity. It identifies that a real person is creating the copy. Every Google account subscriber is asked to sign up for Google+. The search engine weighed up social shares last year and downgraded back links; that’s not a coincidence.

Keyword-laden domains no longer have an advantage. The EMD update might not have affected a ton of sites, but it closed the loophole from the day it went into action.

5. SEO & Analytics: Tame the ROI Monster

Log into any hotel’s analytics profile; the SEO traffic numbers with the tag “not provided” are consistently rising. On October 18, 2011, Google announced that they would no longer pass keyword query data through its referrer string for logged in users. That means that instead of showing organic keyword data for these visitors, Google Analytics will offer you the useful description of “not provided.” Keywords that result in a click on your PPC ad are not included in SEO traffic numbers either. This lack of data is making year-on-year comparisons pretty useless, and making it harder than ever to assign ROI numbers to SEO. Chasing your agency to give you a comprehensive ROI report is just a waste of time.

ROI expectations must be tamed to reflect the change in how SEO data is populating in analytics. Hotels that don’t want to invest in SEO because it is hard to show ROI have a wonderful excuse to dwell in their misguided marketing utopia where you never have to do any SEO. However, smart hotels are still pursuing an active SEO strategy by investing in content, local citations, videos, etc. — despite the analytics and reporting challenges.

Conclusion

Search engine optimization has been drastically transformed over the last decade. The Golden Age is over, and it will surely be missed by the hotels who once made tons of revenue through higher rankings. But it’s time to come to terms with current realities.

Reevaluate your SEO strategy. Are you paying for outdated services? If you’re working with a larger agency, consider that they may be focused on continuing to extract profit from their well-established yet outdated SEO department. Every hotel in the agency system has a big decision to make: continue paying for outdated strategies and promises by hiring “safe” and familiar vendors; or rework your search engine marketing strategy to make the most of current and future search trends.

But keep this in mind. While you sit in meetings deciding whether you want to make revenue with or without ROI reporting, Google is  hustling big-time. Check out their stock price, and their online revenue from click advertising. All arrows are pointing to the sky. They want a better search page for their customers, and more ways to make money through PPC advertising and their other search products.

It’s easy to get confused or caught in the middle when SEO is changing so rapidly. But no matter how much things change, it is always a good idea to do is move away from industrial SEO  strategy and start (or continue) doing the right things: maintain control of your website, keep adding good content, blog about issues that interest your guests, build and optimize your site based on the latest techniques and technology.

Your hotel managers and owners need to get very comfortable with the idea that they will have to continually spend money on expanding website content and buying traffic (PPC). Search changes fast, and there are no guarantees. But that doesn’t mean you should feel paralyzed and stop trying to make the most of your online revenue opportunities.

 

RoomKey.com: Hotel Brands’ Misguided Attempt to Become an OTA

1coyote
How many times have I heard the hotel brands say they are going to “fight and win” the Internet battle against the big bad OTA wolves? It’s easy to see why the hotel brands are angry/embarrassed: those OTAs have done a massively superior job of marketing hotel rooms online.

So what have the brands decided to do? Unite and conquer. It almost sounds like a joke! “Hilton, Hyatt, InterContinental, Marriott, Wyndham and Choice Hotels walk into a bar…” The punchline is a website called RoomKey.com. It’s the hotel brands’ very own “OTA” response. Now at this point, I know a lot of you in the hotel industry already know about Room Key. But guess what? Everyday travellers have no idea what Room Key is. There are a few good reasons for that.

Here is why I think RoomKey.com has been set for failure from the very start.

Using Pop-Ups Is Not a Marketing Plan

I am shocked that Room Key’s core marketing plan got approved. I guess the brands had a few million dollars burning a hole in their pockets. The point is that the approach was discussed, approved and “built” (they acquired hotelicopter.com) and has been actively marketed.

You should know that you are setting yourself up for failure when your core marketing strategy revolves around pop-ups. Now this might have passed for an effective marketing play in… let’s say 1999. Today, pop-ups are so dead it’s not even funny. Really. Pop-ups really suck. The only reason we are still seeing any kind of pop-ups when we exit a site is that Internet browsers have failed to develop at the pace of the Internet (looking at you, Internet Explorer!). RoomKey.com gets the majority of its traffic from a “pop-under” that annoyingly appears when you close any participating brand website.OMG. I know, I am shocked, too! How did this get approved and then funded by the big hotel brands? Hypnosis, maybe? If spam (yes, “pop ups” are spam) is your big idea for traffic generation, imminent slowdown/backlash lies ahead.

Pop-ups for Life!

I had a wonderful opportunity to be on a panel with Room Key’s CEO, John F. Davis III. We met at the 2012 Lodging Conference in Arizona. I remember that I was pretty stoked to meet the founder of Pegasus! I am geeky like that. But what he told Tnooz in an interview that appeared in October 2012 is something that baffled me. John said, “Room Key’s business model was built on the concept of exit traffic, and for a business that is still quite new, only having removed the beta tag from our site 3 months ago, the scale of this exposure exceeds our initial expectations.” It’s pretty obvious to me that Room Key’s business and traffic model revolves around, well, pop-ups. Sadly, they think it’s something new and innovative. There is a reason why nobody has built a brand online using pop-ups. They are SPAM (we just covered this).

Farm to Table to Pop-Ups?

Room Key’s CEO also shared that “the easiest way to express Room Key’s unique position in the industry is to look outside online travel to another relevant consumer trend – in food.  We see real parallels with the farm-to-table movement.” Not sure the farm-to-table example is even close to what Room Key is doing. What real value is being provided to someone coming to your website by serving them a pop-up? There is nothing organic about that. What’s truly organic is traffic that you earn through providing valuable content. What’s organic is coming up with a strategy to provide value, build your brand, and attract repeat customers. What’s not organic is grabbing a one-time booking from someone stumbling onto your website via spam. Spam is not an organic food.

Okay, I think you get the parallel between the long-preserved nature of both pop-up technology and mystery meat. Let’s talk numbers.

Traffic Number Exaggerations + Compset Confusion

John Davis claimed to have “14 million visitors a month” in the same October 2012 interview. Compete.com shows their visits averaging 3.7 to 4.8 million; in other words, 10 million visits short of what they stated.

1compete

But hey, Compete.com is just an online tool. It can be off by a few million… right?

John also said that only 5% were direct visits (people who typed Roomkey.com into their browser window). Analytics 101 tells us that with 5% direct visits, the Roomkey.com brand is not actively building itself online. No conversion or revenue statistics have ever been shared. To quote John, “our conversion rates are very much in line with the objectives we set for the business and are meeting shareholder expectations, bringing millions of visitors per month into the Roomkey.com experience.” I really wish my shareholders were this naïve, happy and satisfied.

Another interesting example of cluelessness is this quote from their standard presentation: “Roomkey.com is receiving 7 times more visits than other recent start-up hotel websites like Hipmunk.com and Room77.com.” Comparing a pop-up catcher to awesome and innovative startups like Hipmunk and Room77  just highlights how clueless the brands still are.

Forgetting Something?

There is another fundamental problem with the site. The “beta” launch did not include any independent hotels. You can’t be a travel engine/online agent if you exclude an entire segment of the hotel industry. Launching with only the brands that paid for Room Key is going to come back to bite them, as they are now actively seeking to add independent hotels. Why won’t the independents want to join? Simple answer. Suspicion. How do independent hotels know that Marriott, Hilton and Wyndam hotels will not always be Room Key darlings? How can they expect to get fair representation? Not a smart move for an “innovative hotel search engine.”

Any Chance of Success?

Yes, there is always a way out of the darkness. A massive shift in policy needs to be implemented. The big brand shareholders need to come up with a better strategy. I would start here:

1. A better source of traffic than pop-up spamming .
2. Aggressive recruitment of independent hotels and resorts, especially in the international market.
3. Learning from successful OTA’s like Booking.com, Expedia.com, and also super-cool disrupters like Airbnb.com.

In today’s world of online travel, clinging to what’s comfortable is going to get you nowhere. It’s nice to see the brands trying to join the internet age, albeit a little late. But they’re still holding on to the edge of the pool. Understand why the market leaders are successful and build on that, or take it in a new direction. But you’ll never succeed using last year’s (last decade’s) online strategies.

Airbnb: More Than a Threat, It’s a Great Disruptor To The Hotel & Travel Sector

I recently read an article on Airbnb on Euromonitor that declared: “Airbnb.com Poses Only a Small Threat to Hotel Industry.”

The truth is, Airbnb is not only a threat, but is actually a great disruptor for the hotel and travel sector. The article I cited makes three critical errors in reaching its erroneous conclusion. Let’s break them down.

Mistake #1: Airbnb is a “vacation rental” business.

Characterizing Airbnb as a vacation rental market play is simply not right. The article uses Wyndham Worldwide as an example of a hotel group that  “owns one of the oldest vacation rental brands—the British Hoseasons est. 1940” (who knew!). Well, congratulations to Wyndham Worldwide for keeping this a secret from the online world for 70 years! Maybe it was classified as a secret project from the WWII era?

To put Airbnb’s reach in perspective, I polled 15 of my best-heeled traveler buddies. Many of them are currently working in the hotel industry. Everyone had used AirBnb or referred a family member to Airbnb at least once. (In case you were wondering, the number of them who contributed any revenue to “British Hoseasons” was ZERO.)

Folks, Airbnb goes way beyond vacay (I used vacay!) rental people. People book Airbnb for EVERYTHING – vacation, business, events, family get-togethers, elopements, comic conventions, etc.  What they are putting in the limelight is how quickly the online travel market is changing and growing.

Mistake #2: Its effects are limited to leisure travel.

Here is one of the headers from the article: “Hotels need to keep an eye on leisure travellers.” Well, hotels need to keep an eye on ALL travelers and the massive changes that are happening in the way people are booking travel. Hotels need to learn to provide better value. Airbnb is not just for a family on vacation that is looking for a kitchen to make breakfast in. Neither it is just hipsters looking for a hotel alternative because hotels are too mainstream. C’mon! It’s much broader. I used Airbnb three times in 2012 for some serious business travel. Meetings, conference speaking, etc. You know… the trips where you have to work a lot? Think a lot of business thoughts?

Even the geographical outreach of Airbnb is spectacular. I had rooms booked in San Francisco, Phoenix and Singapore. Every single experience was excellent. Pretty ironic when I was staying in a Phoenix penthouse that belonged to the General Manager of a local designer hotel! The town was pretty sold out for the days I was there. I made the choice not to pay $465 for an Embassy Suite, and so did many other business travelers that week.

Mistake #3: Counting on the government to shut it down.

Euromonitor article interestingly stated that “Local governments may be an ally.”  to the hotel industry in controlling  Airbnb. Wow. Counting on the government to shut down innovation and disruption-based business models is really sad. Hotels need to know that any government that is going to shut down innovators is going use the same logic to hurt you when you innovate. Unless you have sworn off innovation as a hotel brand, beware what you wish for. Anyway, let’s get real. Building code violations in NYC are not going to be stopping Airbnb. Wishing for that to happen is a fool’s dream.

In conclusion

Airbnb is way beyond a threat to hotels. It’s a new way of conducting the business of travel. It is adding new entrepreneurs to the hotel business, as anyone with an additional room to rent can now be a hotelier. Not only that, Airbnb is adding a supply of rentable rooms to cities across the globe. The words “the city is sold out tonight” have a brand new meaning thanks to Airbnb.