Airbnb courts hoteliers in crusade against OTAs

Airbnb has made no secret of its intentions to knock off Expedia and Booking.com from the top of the travel food chain.

The company is targeting online travel agencies through a number of new initiatives, including by opening up its platform for hotel distribution, a move to not only match OTAs at their own game, but to also endear itself to boutique properties and bed and breakfasts that might have historically viewed Airbnb as the enemy.

Now it’s ramping up recruiting efforts to let small hotel owners know just how exactly they benefit with Airbnb over the other mega brands (hint: it has to do with commissions) by listening and appealing to the hotel owners directly.

What do hoteliers want?

To gauge proprietors’ satisfaction with third-party booking sites, Airbnb commissioned independent research firm David Binder Research to survey owners and managers of boutique hotels, inns and B&Bs.

Unsurprisingly, of the 49 hotel owners and managers surveyed, the majority that use third-party sites express frustration over fees. The highest percentage (75%) cite Booking.com as having the most offensive commission rates, followed by Hotels.com (68%), Expedia (65%) and Priceline (61%).

Customer service, similarly, is a pain point, with just 23% of respondents saying they are "very satisfied" with Expedia followed by 22% with Booking.com and Priceline and 14% with Hotels.com.

What don’t hoteliers know?

Perhaps the most interesting takeaway from Airbnb’s findings is around what hotels don’t understand about commission rates.

The study finds that almost two in three proprietors don’t know larger properties such as chain hotels are typically charged less than small hotels: Just 39% are aware of the fact, while 4% believe larger hotels are actually charged more, 8% think all properties are charged equally and 49% don’t know the fee structure.

When briefed that small hotels are often charged more at a commission rate of 20% compared to 15% for larger properties, 59% of hoteliers in turn report they’re less likely to use third-party booking sites.

Where does Airbnb fit in?

Going into the survey, about half of respondents had used Airbnb to list their hotels in the past 12 months.

Armed with the knowledge that Airbnb charges a standard 3 to 5% fee to all properties, 65% say they’re more likely to use the service.

With the money saved on lower commissions, 61% of hotel owners say they’d use the extra revenue on renovations or upgrades, 45% say they’d supplement employee wages or benefits and 33% say they’d hire more staff.

About 59% also say they’re more likely to use Airbnb as the site works to improve its tools to list and manage rooms.

And what does Airbnb want?

What Airbnb wants, obviously, is to grow the number of hotels on its site (it currently has a distribution partnership with SiteMinder, with more deals allegedly in the works), and stressing the frustrations of hoteliers with OTAs is one way to raise awareness.

Another component of its campaign for hotels is to highlight its arsenal of resources, which it’s done via an open letter addressed to boutique hotel and B&B owners online.

In the post, the company says that in addition to lower commission rates, its four new property types - Vacation Home, Unique Space, B&B and Boutique – make it easier for hosts to promote their listings and for guests to find what they’re looking for.

It also cites no long-term contracts, the ability to connect with travelers from around the world and its new guest membership program as advantages.

Airbnb’s activity in the hotel space – the rollout of a new online ad campaign is also part of the mix - comes as the likes of Booking.com beef up a presence in the alternative accommodations market.

How it ultimately shakes out for these now-acknowledged competitors remains to be seen, but Airbnb's seemingly relentless pursuit towards its 100-year vision is unlikely to die down soon.