Defining the Sharing Economy

One of the most significant trends throughout the travel industry is the rise of the "sharing economy." A sharing economy is a marketplace built on the sharing of resources, like a car or room, on-demand. All transactions are coordinated through the Internet, and mostly occur between private individuals, rather than a major brand or hotel chain. In recent years, this practice has evolved into a profitable business model thanks to pioneering startups like Airbnb, Uber and Zipcar.

For hoteliers, understanding the opportunities and challenges that arise through the growth of the sharing economy is essential in creating a competitive advantage. The traditional hospitality experience is being tested and challenged. For hoteliers who embrace change and understand the need to continuously innovate the guest experience, this opportunity is timely and welcome.

The Opportunity and the Challenge

First, the sharing economy is not specific to the hospitality industry. The exponential growth of this new economic environment is truly a global occurrence, and encompasses a wide variety of goods and services. Companies such as Facebook, Twitter, Uber and Airbnb are all part of the ecosystem. Uber and Airbnb are two of the most prominent businesses experiencing phenomenal growth of sharing goods and services facilitated through rapid enhancements in mobile technology.

Studies show currently that well over half of all American adults carry smartphones, with Millennial smartphone ownership surpassing 85%. While more than half of adults are currently unaware of the concept of a sharing economy, millions of people are actively participating in collaborations that frequently go overlooked, and often unnoticed. For hoteliers, this is a trend that deserves special attention, especially given the ease of searching and reserving alternative forms of lodging through any connected device from anywhere in the world.

Who Wins and Who Loses?

To date, the traditional hotel industry response to the sharing economy has been mixed. The major hotel brands have optimized their web presence to support the rapid growth and adopted mobile technology. They, along with leading sharing economy companies, understand the need to empower consumers with full mobile search, discovery and reservation capability.

Mobile access is the new norm. Hoteliers who have not embraced this and made similar investments have become the first to lose in the sharing economy. Mobile is absolutely essential when potential customers begin their search and discovery process within a local market. Photos and other visual elements must display quickly (within three to five seconds) and render flawlessly within the full screen size of the mobile device with optimal pixel resolution. However, optimizing for mobile is only one initial factor for determining winners and losers in the new sharing economy.

Location, Location, Location

Every second, millions of smart phones are connected to global positioning system (GPS) technology. While GPS navigation is not new, the ease of mobile search and discovery has been greatly enhanced in recent years. Apple, Yelp and Google have significantly improved the mobile navigation experience to quickly search and easily find precise locations.

Not too long ago, mobile navigation was a time consuming and daunting process. Now, within seconds anyone with a smart phone can pinpoint a specific location and discover nearby amenities. Local, popular businesses near hotels are becoming real differentiators of where guests decide to stay. Airbnb has an excellent mobile presence that describes and maps nearby attractions and services from any connected device.

Hoteliers must stay current with Airbnb's web presence standard to ensure their localized presence is easily found and discovered. This is especially important for popular attractions and restaurants near hotels. Foreign travelers especially need to know what unique local differentiators are both available and accessible throughout their stay. Hoteliers cannot take for granted any value-added goods or services within walking distance from their hotel. These businesses must be easily found on the hotel's own website and on all online distribution partners too. Omitting this valuable decision making content from your website can easily make the difference in capturing or losing out on a guest's stay.

Gaining Competitive Advantage Within the Sharing Economy

For years, hoteliers have invested in rate shopping and canvassing tools to ensure their rates are competitive. Today, the competitive rate shopping criteria is mostly limited to room-to-room hotel comparison. Why is this so? Currently, there is an abundance of conventional thinking within the hotel industry that Airbnb and other lodging alternative companies do not compete for consumers desiring to stay in traditional hotel accommodations. What is the reason for this widespread thinking?

Presently, the hotel industry is in a sustained period of growth. Occupancy, average daily rate (ADR) and revenue per available room (RevPAR) indicators are all strong. Advance reservation pace for the remainder of 2015 and well into 2016 shows the current positive trend will continue.

However, a growing number of hotel industry executives predict an inevitable intersection of traditional hotel demand with alternative lodging accommodations. This is foreseen as part of the lodging decision making process, especially given the growing importance of marketing to Millennials. The Millennial demographic is like no other, demanding total choice and control throughout their purchase experience.

Given the Millennial demographic reality, coupled with the rapid growth of mobile technology, and the success of Airbnb, these executives are taking action now to protect their turf and profit in the sharing economy. They are frequently partnering with companies specializing within the greater hospitality vertical, ones with deep expertise in mobile website and reservation technology. Probably the most effective digital differentiator is in partnering with companies that parlay their mobile website and reservation experience with advance business intelligence capabilities. These tools are essential for hoteliers to prosper in the upcoming years, and to directly benefit from the emergence of the sharing economy.

About TravelClick, an Amadeus Company

TravelClick offers innovative, cloud-based and data-driven solutions for hotels around the globe to maximize revenue. TravelClick enables over 38,000 hoteliers to drive better business decisions and know, acquire, convert and retain guests. The Company's interconnected suite of solutions includes Business Intelligence, Reservations & Booking Engine, Media, Web & Video and Guest Management. As a trusted hotel partner with more than 30 years of industry experience, TravelClick operates in 176 countries, with local experts in 39 countries and 14 offices in New York, Atlanta, Bucharest, Chicago, Barcelona, Dubai, Hong Kong, Melbourne, Myrtle Beach, Orlando, Ottawa, Paris, Shanghai and Singapore. Additionally, the Company fosters more than 600 travel-focused partnerships for hotels to leverage. Follow TravelClick on Facebook, Twitter and LinkedIn.­­

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