Convergence in the Short-Term Accommodation Sector

A key trend which emerged from the discussions and presentations at the 2019 International Hotel Investment Forum (IHIF), was the convergence occurring in the short-term accommodation sector. This topic has been ongoing following a discussion on the impact of the ‘sharing economy’ on the hotel sector in 2016.

Convergence between the hotel market and alternative lodging is happening by necessity. Hoteliers are realising they must increase the variety of their offerings to grow their client base. At the same time, apartment rentals have realised that in order to tap into new client segments, like business travellers, they need to offer upgraded accommodation with a guarantee of enhanced quality and service. There has been a discussion about capping hotel rates, particularly in major cities where apartment rentals, such as Airbnb, are heavily present.

A shining example of convergence is Room Mate, a medium-sized Spanish chain, founded 13 years ago in Madrid, offering a variety of accommodation styles. Speaking at an IHIF panel, the group’s co-founder and CEO, Kike Sarasola, noted that:

“Time is the most precious element when you’re looking for something, no matter your age or what you want to do, if you go into one of my platforms you will be able to see all the possible combinations. One time, you can go to one of my apartments, and other time, you can go into one of my hotels.”

Besides its traditional hotels, the company manages more than 10,000 apartments; 600 of them exclusively. It opened its first complete apartment building in Madrid in 2018. The apartments, many of which are listed on Airbnb, are to be found in the immediate vicinity of the group’s hotel properties and are vetted against an extensive checklist of criteria. Guests, who stay in the apartments benefit from hotel services, such as check-in, check-out, housekeeping, and catering.

Be Mate, a subsidiary of Room Mate,  offers a selection of apartments based on 76 criterias which can be grouped into specific categories. These include quality, design and location, plus additional details which can affect a client’s stay, such as noise levels. The group puts particular emphasis on the quality of the photos which must be of a professional calibre and should accurately reflect the reality of the accommodation. Be Mate goes above and beyond to provide consumers with a quality to rival hotel services and alternative property rental brands like Airbnb.

At another panel, the CEO of premium short-lettings provider UnderTheDoormat, Merille Karr predicted that in five years’ time, all the major hotel chains will offer home sharing. She noted that the gap between rentals and hotels is closing with alternative accommodation now accounting for 10% of overnights in London. Karr also stated that there is a need for greater quality control in the rental sector, such as providing insurance for homeowners who rent out their properties.

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