Marriott International is soon to be taking on established short-term rental companies such as Airbnb with a new home-sharing service, according to multiple media reports including Bloomberg and the New York Times.
The world’s biggest hotel chain is expanding its Marriott Homes & Villas service internationally, which has been undergoing a successful pilot over the past year and already operates in some European cities including London and Paris. According to reports, the new service, to be launched in May, will offer 2,000 luxury homes worldwide for short-term rental.
It looks like Marriott is not targeting the affordable accommodation sector, however, so Airbnb’s bread-and-butter, low-priced short-term rental business is likely to be unaffected. And if the service stays limited to 2,000 homes globally, the offering would be a fraction of that of Airbnb and other major short-term rental providers.
Arne Sorenson, Marriott’s chief executive officer, said in a recent interview on Bloomberg Television, “Many of their customers are choosing to stay with [established short-term rental providers] for one reason only, and that’s because they’re cheap. We’re not really in the bottom part of the market – our business is never going to be to provide the cheapest stay.”
According to Skift.com, Marriot will work with property management companies all over the world, who will pay Marriott a fee for including their homes on the new platform. The booking will be operated through a single website like Airbnb, and the individual property management companies will continue to manage those properties, which reportedly “run the gamut from castles and beach houses to urban apartments and country homes.”
However, unlike Airbnb and VRBO, Marriott offers a customer loyalty points program, which can be accumulated and used on both hotel stays and the Homes & Villas rentals, as well as being accumulated through partner credit card use.
The loyalty points aspect is a major factor in Marriott’s move into home-sharing, according to a credit card expert. Matt Schulz, chief industry analyst at credit card comparison website CompareCards, said, “If Marriott plays this right, it can be a really big deal. Letting consumers earn and redeem rewards points for stays at home rentals the same way they do for hotel stays could be an absolute game-changer. Expanding Marriott rewards into the home rental space could also make the company’s credit cards more desirable. For most people, credit card rewards are all about flexibility. The more places you can use them, the better. Even for a chain with as many hotel properties as Marriott, giving people the ability to cash in credit card rewards points for home rentals would increase people’s options in a huge way. For Marriott and [its credit card partner] Chase, this is yet another way to attract affluent millennials that banks and other businesses are falling all over themselves to attract."
The line between the home-share and hotel industries is increasingly blurred, with Airbnb heading in the opposite direction by including some hotel rooms as part of its short-term rental offerings.
Airbnb announced this past weekend that it is teaming up with the owner of a high-rise tower in New York’s Rockefeller Center to convert 10 floors into hotel rooms, which will be offered through the Airbnb platform, according to the Wall Street Journal.
In March, Airbnb struck a deal to buy hotel listing startup HotelTonight in March, which prompted Chip Rogers, president and CEO of the American Hotel & Lodging Association, to issue a statement demanding that Airbnb be regulated like other hotel companies.
The statement said, “Airbnb's latest scheme is just further proof the company is playing in the hotel space while evading industry regulations.”
