Airbnb has announced a move into apartment-style luxury hotel suites in New York City, at a time when Marriott International appears to be ready to launch its own home-rental business, albeit only in the top end for now.
The Airbnb move was first reported by The Wall Street Journal and the Marriott riposte has now been confirmed, with their initiative to be named Homes & Villas by Marriott International, and focusing on upscale properties.
Marriott owns brands including Sheraton, W Hotels, and Ritz-Carlton and has run a pilot programme in Europe in four cities which lets Marriott members earn and redeem loyalty points in the selection of upscale homes. It now appears ready to roll out an offer of 2,000 premium and luxury homes in 100 cities.
“The launch of Homes & Villas by Marriott International reflects our ongoing commitment to innovation as consumer travel needs evolve,” said Stephanie Linnartz, Marriott’s Chief Commercial Officer, in a release.
Airbnb co-founder and CEO Brian Chesky said on CBS’s This Morning TV programme that Marriott’s plan was an “incredible testament” to its brand. “We welcome them to the space.”
Airbnb, valued today at around US$31bn, currently controls over half of the short-term rental market in the US, with the second and third most popular services – VRBO and HomeAway – both owned by Expedia Group, said to control approximately 17% and 11% of listings, respectively.
Booking.com claims to offer over 5m short-term rental listings, around 5% of the market, according to Host Compliance.
Airbnb, however, has not made itself hugely popular with traditional hotel operators by virtue of not having to adhere to the same laws and restrictions. Indeed, New York City prohibits renting an entire apartment or home for less than 30 days without the owner present; only two guests are permitted, and they must have “free and unobstructed access to every room and to each exit within the apartment.”
Therefore, Airbnb’s new partnership with RXR Realty to turn 10 stories of the Rockefeller Center into luxury apartment-style hotel suites listed exclusively on Airbnb represents a big move onto the hoteliers’ turf. RXR Realty CEO Scott Rechler has pointed out that, because the building is a commercial space, local laws regarding the short-term rental of residential properties don’t apply.