Hotels, Home-Rental Sites Compete For Each Others' Business Consumers want more options than the standard queen room. That's driven hotel chains into the home-rental business, while Airbnb is looking to make inroads into the hotel business.
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Staying At A Hotel Or An Airbnb? The Lines Are Blurring

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Staying At A Hotel Or An Airbnb? The Lines Are Blurring

Staying At A Hotel Or An Airbnb? The Lines Are Blurring

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AILSA CHANG, HOST:

When you travel and you need a place to stay, most of us make a choice - a hotel room or, increasingly, a space in someone else's home or apartment. But the line between those two options is blurring, and now hotel chains and home-sharing sites are eyeing each other's turf, as NPR's Yuki Noguchi reports.

YUKI NOGUCHI, BYLINE: The array of places for travelers to stay keeps expanding, ranging from a yurt in Utah's Zion backcountry to a mansion overlooking the Amalfi Coast to the standard double-queen room. Lorraine Sileo is senior vice president of research for Phocuswright, which tracks the travel industry. She says the lines between hotels and home stays are changing.

LORRAINE SILEO: You really do need to think of it as lodging because that is where this convergence is happening. And I don't think we're going to have these definitions a few years from now.

NOGUCHI: Just this week, Marriott and Airbnb offered two stark examples of this. Marriott is expanding its luxury home rental business, and Airbnb said it would develop 10 floors of Rockefeller Center to offer a hotel-like service. Already, search engines like Expedia and Booking.com display both hotel rooms and short-term rentals side by side in their search results.

SILEO: Consumers are just getting more and more inventory and more choice at all different price points.

NOGUCHI: Marriott's latest move is focused exclusively on high-end properties - lavish glass houses with infinity pools or Caribbean island villas overlooking blue oceanfront. Marriott's rental inventory is 2,000 homes - tiny compared to Airbnb's 6 million rental properties or 2 million on Expedia. But the appeal of home-sharing is that it's growing at twice the rate of hotels. And Marriott isn't alone chasing those dollars; other major hotel brands like Wyndham and Choice Hotels have similar rental offerings. Stephanie Linnartz, Marriott's chief commercial officer, acknowledges her company is changing in response to consumer demand.

STEPHANIE LINNARTZ: I think what we're doing here is another example of a 91-year-old company kind of disrupting itself.

NOGUCHI: Airbnb's model grew rapidly by offering a variety of cheaper and sometimes offbeat alternatives to hotels - single bedrooms in a converted garage, for example, or a houseboat docked at a marina. Airbnb's properties now outnumber the total number of hotel rooms in the U.S. But Airbnb spokesman Chris Lehane says there's still room for home-sharing to grow.

CHRIS LEHANE: We've always said that there is a really big and growing pie for this particular space.

NOGUCHI: And the competition goes both ways - in addition to its Rockefeller Center development, Airbnb recently acquired the booking site Hotel Tonight. But competing on each other's turf isn't easy. Neither wants to give up the advantages that made them successful in the first place. For big chains like Marriott, that means they can't afford to alienate their franchises, who don't want to see the company invest too heavily in a rival business line. Dan Wasiolek is a travel industry analyst with Morningstar.

DAN WASIOLEK: Marriott does have to be aware, as I'm sure they are, that it potentially, on the margin, could cannibalize their traditional hotel bookings business.

NOGUCHI: At the same time, he says Airbnb doesn't want to become just another site offering cookie-cutter rooms; that, he said, would put them at risk of losing their identity as a source of unique and distinctive places to stay. Yuki Noguchi, NPR News, Washington.

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