How the hotel industry is fighting its competition in the sharing economy with a set of evolved offerings.

Airbnb and other sharing economy hospitality platforms have been successful in courting today’s millennial traveller. Rather than grandiose, they want intimate. Rather than relaxation, they want education. They also want to stay and live with people who can immerse them in the local culture.

The statistics affirm these assumptions. Airbnb use in London quadrupled in the two years to January 2017, and PwC predicts the European sharing economy will be worth $320bn by 2025, up from $14bn in 2014. However, there are smaller stories which point to a disenchantment with the sharing economy, and a desire to return to the aspects of hospitality which are service-led, reliable and accountable.

Heightened Interaction

After the Ace Hotel in New York re-cast the model of the hostel for a chic, culturally-literate audience in the noughties, more are tapping into the appeal of a hotel which is angled towards conversation and communal collectivism.

Oddsson in Reykjavik is a simple hostel with aesthetic appeal and spaces focused on shared experiences with other guests. It describes itself as a “a hotel with a hostel atmo, a hostel with hotel service”. Guests are invited to use shared kitchens, inhabit dormitories together and it even has a yoga studio and karaoke room.

US-based hotel company Rydell Group is set to expand its affordable boutique hostel Freehand hotel concept to Los Angeles, placing an emphasis on social interaction through large common spaces and a slew of attention-grabbing restaurants and bars. Meanwhile Accor Hotels has launched a hostel concept called Jo&Joe, that offers Airbnb-style shared rooms within properties full of communal spaces, which can be used in an array of capacities, from dining, to work, to sleeping.

Hotel giants like Marriot are taking the sharing economy’s interactive nature more literally. This can be seen in their first-ever innovative lab concept, M-Beta hotel in Charlotte, which aims to use advanced technologies to gain real-time feedback from a new generation of guests who can rate any part of their stay at any point. Another indicator of how the Airbnb model is shaping the development of hotels today, the 5-star rating system borrows from the feedback mechanism commonly found in sharing economy platforms that younger consumers have grown accustomed to.

Masstige Hotels

When attracting today’s aspirational and thrifty traveller, price point has been a key driver to Airbnb’s success. Now we expect to see a new set of hotels emerge which provide boutique qualities – lively lobbies, cocktail bars and design-led aesthetics – without the high cost.

Public by Ian Schrager of Studio 54 and Edition Hotel fame aims to bring luxury to the masses, with rooms in the hotel starting at just £155 per night: “Public is based on a very simple, very important and very revolutionary idea: luxury for all. The pillars of that principle are style, service, value and experience,” says Schrager.

In order to achieve its affordable price-point, Public has sacrificed certain luxury service elements, such as the removal of a staff member taking luggage to a person’s room upon entry, aligning with the sharing economy’s self-service model, where modern travellers are more familiar and comfortable with serving themselves in rented accommodations.


While hotels are taking cues from the sharing economy, at the same time, Airbnb is looking to hotels for guidance on how to improve its hospitality experience. Chip Conley, the company’s global head said, “I think what Airbnb can learn from the hospitality industry is the consistent, effective and efficient delivery of service.”

Never on the back foot, Airbnb is set to launch a new tier of products that will parry this new evolution in the hospitality market, and tap into a luxury audience. The acquisition of high-end rental company Luxury Retreats earlier this year, as well as the announcement of its new service, nicknamed Airbnb Select, which aims to match guests with quality-inspected home and apartment rentals, are key signs of the brand’s efforts to broaden its reach among more high-end audiences.

In hopes of “improving travellers’ experience by including hotel-like features”, Airbnb has hired Conley, the founder of boutique hotel chain Joie de Vivre Hotels, on the sole basis of teaching hospitality to its sharing economy communities. Encouraging hosts to act more like concierges and hotel staff, and promising the same reliability and luxurious amenities as hotels, the brand continues to introduce new measures like home sharing clubs to educate its hosts on how to provide excellent and dependable hospitality standards.

In all, it seems the future of travel accommodation will look more like a blend of a traditional hotel stay and that of an Airbnb, combining the best of both worlds: an affordable, localised experience surrounded by like-minded people, elevated by reliable, convenient and intuitive service.