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Future of Hospitality

Illustration by Kailey Whitman

Given ‘disruptive’ businesses like Airbnb and VRBO, how will the hospitality industry continue to evolve?

Editor’s Note: This article is part of a larger series of Q&As that originated in the future-focused UD Magazine. To see additional questions, please visit the Envisioning the Future website.

Airbnb has already disrupted the hospitality industry: During a Super Bowl, other NFL game, university graduation or big conference, Airbnb floods the market with supply, and with it more choice for the average customer. So that money’s not going to the hotel industry, and industry leaders are not ignoring it.

Many guests are not just looking for a hotel to sleep in. They want an experience, and they want an authentic experience, which Airbnb hosts can offer in some ways much more easily than a hotel. However, hotels are now looking to create an experience as part of your stay. Marriott, for example, is partnering with a company that will create local, authentic experiences for guests based on their interests.

You’re going to see more of that, and you’re going to see more hotels that reflect a local flavor: integrating the local foods and local décor, so that you really don’t feel like you could be in any chain hotel. The Springhill Suites that just opened on Main Street in Newark, for example, has a variety of UD decorations in their lobby, so guests feel that they’re on campus. We’re starting to do more of that because of that authenticity that Airbnb offers so easily.

The other major disruptors in our industry are technology and transportation. Alexa and Siri, connected devices where you can use your voice to control temperature, the television, your bed, turning water on and off: There are some issues with security and privacy, but within the next 10 years we will see more and more hotel room environments that you can control with your voice. Further, how are driverless cars going to change the way we travel, and change where we might need hotels? Or, with faster modes of transportation, when you can travel across the country in a few hours, will you still need a hotel room? This is going to radically change our industry.

Sheryl Kline is deputy dean of the University of Delaware’s  Alfred Lerner College of Business and Economics, and a professor of hospitality business management.

I think it is possible that a large firm like Hilton or Marriott – or a combination of these hotel companies – will buy out Airbnb in the future. Or Airbnb could purchase a large hotel/hospitality company or hotel brand. It is also possible that Airbnb could merge with a well-known branded hotel company.

Marriott is also competing with Airbnb with a new home rental strategy. Marriott International and Hostmaker announced a collaboration to introduce a new home rental venture under Marriott’s Tribute Portfolio Homes brand. In the six-month pilot, more than 200 curated homes in London will be available to rent on the Tribute Portfolio Homes website. Average rates for the rentals sit at $280 to $351 per night for a one- or two-bedroom home, and the listings range from “avant-garde penthouse” to “comfortable flat with corner balcony.”

This marks Marriott’s first major step into the home-share market, nine years after Brian Chesky founded Airbnb and disrupted the travel industry. Marriott's move comes at a time when Airbnb is attempting to step out of its "alternative travel" image, introducing concepts like Airbnb Plus that offer more curated travel experiences. Meanwhile, other traditional hospitality companies like AccorHotels and Hyatt have also launched recent home rental ventures.

The other major trend is the growing power of technology. In the "high-touch" hospitality industry, high tech will remain largely behind the scenes into the mid-2020s. Think kitchen automation, marketing and quality control supercharged by artificial intelligence, and insurance claims paid immediately after being assessed by AI that uses autonomous drones to survey damage. However, Millennials and Centennials take tech for granted. As they come to dominate markets, technology will take on many routine guest interactions, freeing human workers to handle more challenging issues.

Fred DeMicco is ARAMARK Chaired Professor Emeritus of Hospitality Business Management at the University of Delaware’s Alfred Lerner College of Business and Economics.

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