Marriott Sets Sights On Airbnb — Should You Care?

Filed Under: Marriott

Marriott has announced that they’ll soon be offering 2,000 premium home rentals in over 100 destinations, giving Marriott Bonvoy members access to more lodging options.

The biggest threat the hotel industry faces

Much like the taxi industry has faced a lot of competition from ride sharing services like Uber, the lodging industry faces a lot of competition from home sharing services like Airbnb.

It’s interesting to see how the hotel industry is interacting with this trend. Many hotel groups have stayed radio silent when it comes to home sharing, while others have actually invested in home sharing companies.

Homes & Villas by Marriott

Next week Homes & Villas by Marriott will launch, which will be a home rental initiative offering 2,000 premium and luxury homes located in over 100 destinations throughout the US, Europe, the Caribbean, and Latin America.

This will allow Marriott Bonvoy members to earn and redeem points for a wider variety of accommodation options.

This new program is an expansion of a trial that Marriott launched in 2018, when Marriott introduced Tribute Portfolio Homes. They found some interesting trends based on that:

  • Nearly 90% of people who booked were Marriott Bonvoy members
  • Over 75% of people who booked were traveling for leisure, or with friends and family
  • The average guest spent more than triple as much as they would for a usual hotel stay

What home sharing does for Marriott

Homes & Villas by Marriott will add nearly 40 additional leisure destinations for Marriott Bonvoy members to earn and redeem points at. Marriott gives the following examples:

  • A four-bedroom cottage on six private acres of California wine country
  • A six bedroom villa in Sorrento, Italy with an infinity pool overlooking the Mediterranean Sea and a wood-fire pizza oven
  • An oceanfront villa in Anguilla with private beach and a personal butler and house staff
  • A 18th century Irish Castle that sleeps 17 and features a private lake for boating and fishing
  • A six-bedroom townhouse in London with a children’s playroom and climbing wall

Marriott is launching Homes & Villas by Marriott International with select property management companies that are already managing these homes, including TurnKey Vacation Rentals, LaCure, Loyd & Townsend Rose, Veeve, London Residents Club, Mainsail Lodging, and Reserva Conchal.

How to book Homes & Villas by Marriott

Starting next week you’ll be able to book Homes & Villas by Marriott properties directly through their website, which is homesandvillasbymarriott.com.

Furthermore, when searching for accommodation on marriott.com for three or more nights in locations with home inventory, Marriott’s website will provide a link to this option as well.

Marriott is still deciding how to sell Homes & Villas by Marriott through other channels, including the Marriott Bonvoy app and travel advisors.

Earning & redeeming Marriott Bonvoy points for homes

Marriott Bonvoy members will be able to earn and redeem points for home sharing stays. While redemption rates haven’t yet been shared, I suspect they’ll be using a revenue based system, and I doubt it will represent a very good deal.

Rather the value here comes with being able to earn points for stays, in my opinion. Marriott Bonvoy members will earn five points per dollar at these properties, which is the same as the points members earn for other extended stay properties, though is half the number of points earned at most Marriott properties.

Members will also receive bonus points based on elite status, and elite members will also receive an elite welcome gift of a special amenity or points.

Is this actually a big deal?

In general I think it’s smart for the major hotel groups to acknowledge home sharing as a concept, since it’s something that’s here to stay. So I think this initiative from Marriott is smart, as members will be able to earn and redeem points for more experiences.

That being said, I’m not sure that these partnerships will be the game changer that some people are suggesting they will be.

It’s important to remember:

  • Marriott isn’t investing in any existing home sharing business
  • Marriott doesn’t have any expertise in home sharing
  • Marriott isn’t launching their own home sharing business

Instead this is essentially a marketing partnership, where Marriott is white labeling what other companies are doing.

I would assume that all they’re really doing here is taking a commission on what you book through them, and they’re offering you some rewards in return. It’s a win-win-win, because the home sharing companies get more business, Marriott seems like they’re into the trend, and Marriott Bonvoy members can earn points.

But it’s not like this actually changes anything with home sharing, other than open it up to more eyes that would otherwise just consider hotels.

On the loyalty front, being able to earn an extra five points per dollar spent does equate to an incremental return that may make this worthwhile for some.

At the same time, on some level I have to imagine the cost of all of this is being passed on to consumers pretty directly — the home sharing management company takes a cut, and presumably Marriott is taking a cut, so that money has to come from somewhere.

What do you guys think — is Marriott partnering with a home sharing company a game changer, or is this just a mildly positive but mostly inconsequential development?

Comments
  1. Posting here so you see this. Singapore Airlines SIN-EWR is available in J on June 17th! Search DPS-YYZ on June 17th and the second option has DPS-SIN-EWR-YYZ all in J.

  2. I think you had a great article! Many of the headlines were very deceiving, but your is very clear.

    So is it limited to the luxury segment only? And it doesn’t seem like individuals can become hosts, is that true?

  3. Just like I don’t want to ride-share and sit in someone’s crappy car I refuse to support the home-sharing fad. I don’t want to live in someone else’s space where I can visit a hotel and live in my own space.

  4. As an AirBnB host, who had a brief flirtation with TurnKey, one of the management companies linking with Marriott (and so, presumably, my property would have been one of those now being offered), I can’t see this working too well.

    My flirtation with TurnKey demonstrated clearly that homestays are very different from hotel stays. TurnKey is trying to commoditize them, and I’m sure that it does well with cookie cutter apartments in apartment blocks, but they proved wholly incapable of managing a large and complicated estate. Their attention to detail and their expertise simply did not allow for the place to be maintained properly and, if they wanted to improve, they would have had to dedicate high caliber individuals to manage properties, something that would have massively altered their margins.

    I think Turnkey is hoping to sit where old-fashioned vacation rental property management companies sat in the market, before they were knocked out by AirBnB and VRBO. But they charge less (30% vs the 40% the older ones charged) and simply cannot offer the levels of service the others charged.

    As an owner, it was unclear to me why I should pay that 30% when standards were lower and bookings were lower. Leaving the price unchanged would significantly reduce my net income (after existing management charges), but the pressure was on to lower the price since the standards were so much lower. Marriott will be in the same position.

    I don’t think that this is the right approach.

  5. @Robert – I felt like I was the only one who didn’t trust randos who don’t even have significant background checks. Thanks for validating my viewpoint.

  6. @Robert – Clearly you are doing it wrong. Uber Black cars are almost always Lincolns and Suburban car service drivers that are inbetween customers.

    Secondly, you’ve never used AirBnB. You have the option of searching for a room, or a whole house or apartment.

    I’ve found that in many places a whole house is the same per night cost as a hotel room.

  7. One has to wonder how they are slicing the numbers – the family stay in the 6-bedroom house will spend 3 times more on what exactly? And is that really comparing apples to oranges, when the “luxury” homes in Tribute portfolio are bound to attract highest-paying customers – hardly and “average guest”. The number of people in the booking (10-12 people in the home, vs 1-2 in the usual hotel room) makes this metric even more head confusing.

    As attested by a myriad of reviews on hotel dot com and booking dot com, differentiation between hotels and homes is not good up front, leaving waaaay to many customers complaining about lack of daily housekeeping, lack of staffed reception, lack of services. To top it off, too many of the aggregators (and Marriott approach sounds a lot like one) do not provide any additional value (like background checks, level of maintenance, the mandatory upkeep) beyond just advertising channel. For Marriott, this can even end up bad – they can potentially dilute their own brand if they don’t enforce any standard of any sort (which can be impossible, they can’t even decide for their own managed brands internally).

    I have been happy with VRBO/HomeAway/HolidayLettings, but I’m cognizant that it is tedious to sift through 100s of properties, read reviews, look for clues in the pictures… not dramatically different comparing different hotels in the same city, just order of magnitude more options. I never booked these accommodations through usual hotel websites, as I find too many of them were trying to fit a square peg (individual home) into round hole (hotel room) and ending up with confusing categorizations, mismatched descriptions, and wrong reviews. Unless Marrott is enforcing some “basic” standards for individual homes or some form of additional support, I won’t be valuing 5points/$ as much as having more choices.

  8. The prices (at least those I checked for a couple of places in Paris) are RIDICULOUS. More than twice as much as similar, well-reviewed, places on Airbnb. Also, the redemption rate appears to be flat at 0.4 cpp. There is absolutely no value proposition here as it is currently structured. I see this being a very niche product until they change one or both of those pricing decisions.

  9. I think there will be more competition for the more “luxurious” properties in Airbnb, some might even jump to Marriott?

    But I think there is no threat for more modest to crash pad type properties in Airbnb. So it depends on the type of travel you are looking for.

  10. Will travel agents now be able to earn a commission? Before AirBnB did not pay travel agents any commission. Marriott is a preferred provider with my agency so I am truly hoping there will be travel agent incentives now.

  11. Posting here so you see this. Singapore Airlines SIN-EWR is available in J on June 17th! Search DPS-YYZ on June 17th and the second option has DPS-SIN-EWR-YYZ all in J.
    Edit: available on Aeroplan

  12. Robert and Andrew,
    I never understand why someone like both of you feel the hate of new inventions.
    First of all, car sharing and room sharing are complete different. Car sharing is replacing old taxi and room sharing will never do the same to hotels.
    Car sharing such as Uber , I would rather call them car hailing service. I just got back from Athens and they only allow those service on traditional taxi. But that is fine, the point is transparency and convenience. Old taxi just hard to compete with that.
    AirBnB is never my first choice unless travelling with my parents. Renting a whole house/apartment does serve large family better then hotels. Also AirBnB is only good for long stay not day hoppers. I think AirBnB is mostly compete with traditional vacation home rental such as VRBO but with better transparency.
    From what I can see, the current approach of Marriott is not “disrupting” , but there could be. If I were in those position, I could design a much more effective way to get into this market but that require a lot of dedication while Marriott currently seems just want to claim they did it but as lightweight as possible

  13. @Lu – sharing is not a new invention. Even charging money for sharing is not a new idea. These are hardly revolutionary innovations.

    @Good Robert – my experiences with AirBnB (as well as with each of the Uber services) has pushed me away from them. I’ve rented shared space as well as full homes and have had bad experiences each time. It finally became apparent that my bad experiences were the norm rather than the exception and so I left. You seem to think I’m judging without experience, you’re very wrong there.

  14. This is just dumb though it fits with Marriott’s stated strategy of being a “travel” company and not strictly a hotelier. What’s next, buying an airline? I guess this is in some ways a return to the travel landscape of 40 or 50 years ago when hotels were owned by airlines who also owned rental car companies. If I’m a Marriott property owner in any of the cities with a home-renting business I’m furious.

  15. Marriott isn’t mentioning elite night credit. While it was the case with TributePortfolioHomes and you’ll get 1 night credit for every 3 nights at Marriott Executive Apartments, it looks like earning points only with this new product. Would be a bummer…

  16. Robert , do tell what bad experience repel you away from those business. Yes, bad thing could happen with a Uber and I had some of those too. But it could be with taxi too and worse. With old taxi you an hardly track down while Uber can record the trip so well that if you complain it can be resolved in a few minutes.

    The innovation or so called disruption is not “sharing” but using current technology to increase transparency and enhance communication. For vacation room renting, neither AirBnB nor hotel chain like Marriott have fully utilize the tech power available to them to give people the transparency they deserve. However, only new innovation can achieve that. Old fashion business model would never give you the ease of mind as it is.

  17. Is it just me, or does this appear a bit ”desperate”? Will this really be popular for Bonvoy members? That said, I can’t really blame Marriott for trying to get some additional revenue.

    And I get why home sharing has become so popular. I personally haven’t tried it and I most likely wont (for many different reasons), but I can certainly see the appeal for a large chunk of the market.

    I do love market disruptions though. For instance, I live in Sweden and I have never used Uber here, but thanks to Uber every single cab company has developed really good apps with live traffic, car preferences, fixed prices, and so forth. And cab fares have decreased a bit. I hope that Airbnb forces the major hotel chains to keep developing and perhaps lowering their prices 🙂

  18. I suspect the real game changer over time will be Google with its ability to find and book a property along with flights.

  19. I still don’t see the value of staying at home shares with the exception of limited locations – ski areas, lake homes, beach homes.

    I hate it when my friends want to stay at an AirBnB in a city with plenty of excellent hotel choices. Unsurprisingly, we usually end up in a place that doesn’t match up to the photos, isn’t nearly clean enough, and have to leave at 10 am. No services, no assistance, pain in the ass customer service. Hard pass regardless of who’s marketing it.

  20. Booking.com , traditionally a hotel booking site is now offering apartments in lots of locations, so all online booking sites are changing rapidly .

  21. airbnb might not be everyone’s cup of tea, but it sure as hell works for us.

    Looking at all the family vacations we’ve taken in the past three years, it seems that we’ve booked 90 percent airbnb, 10 percent hotels. We’ve just returned from an 11-day tour of southern Spain (Andalusia) which was all airbnb, all entire homes (no shared space).

    We like airbnb because you have a lot more affordable options when it comes to booking a place in interesting or “premium” locations. For example, we got a two-bedroom in Ronda, Spain with a gorgeous view – google it if you don’t know what I’m talking about – for about a third of what a similar hotel would charge for four people and the same view.

    Second, we enjoy cooking. I know, who wants to cook on vacation, right? well, we do… Having a kitchen is a big plus for us. We’ll have a nice breakfast in the mornings, get lunch out while doing touristy stuff, and split dinners about 50-50 between cooking and eating out.

    Third, we like to travel light – a consequence of doing multi-week, multi-town tours rather than just staying in one place the whole time – and on 10-day+ trips we’ll usually do a load of laundry or two. airbnb places will usually feature washers / dryers so you don’t have to go to a laundromat or spend good money on hotel-provided laundry services.

    Someone mentioned airbnb not making sense in large cities with good hotel options. I’d say it again depends on the location. Last summer we went to Stockholm and instead of getting a comparatively cramped hotel room downtown, we got a nice two-story house with a garden, lake and forest view for the same money. Sure, it was in the suburbs, but as Stockholm has excellent public transit that meant a 30 minute extra trip into downtown, no big deal.

    So I’d say that the kind of vacation you prefer will normally dictate your level of satisfaction with airbnb. That, and your attention to detail when booking a place (reviews, location, amenities etc).

  22. After reading getting exposed to bonvoyed.com I would rather use a different company to rent a house

  23. @neaorin, I totally agree with your analysis and like Airbnb or Booking dot com apartment rentals for all the reasons you detailed.
    (Buying great gourmet food,wine,cheese & produce in Paris shops and being able to relax with friends or familyat the rental instead of eating out all the time)
    I don’t undertand why Marriott is not managing small/mid sized apartments or smaller rentals directly because the problems with Airbnb are bad tenants trashing places for owners and bad owners lying on properties for tenants so if a big Hospitality business like Marriott could be in charge of the rentals instead of individuals it would be a great success.

  24. As an Airbnb owner in an area where demand is very high, I find it fascinating that local governments are trying to do away with home sharing by people but will allow hotels to offer it.

  25. With how high home prices are now I don’t feel so good about a giant corporation buying up thousands of them just so they can rent them out and compete with AirBnB.

Leave a Reply

Your email address will not be published. Required fields are marked *