Marriott to Expand Its Home-Sharing Business in a Challenge to Airbnb
Marriott is expanding its home-sharing business to the U.S. as Airbnb diversifies its own business.
(Bloomberg) -- Marriott International Inc. is expanding its home-sharing business to the U.S., becoming the latest hotel operator to challenge Airbnb at its own game and blurring the distinction between home-sharing and the traditional hospitality companies.
Marriott, the world’s largest hotel company, plans to expand the home-sharing pilot it launched in Europe last year to the U.S., adding 2,000 home rentals in vacation destinations such as Lake Tahoe and Bar Harbor, Maine. The initiative is small –- the company has 1.3 million hotel rooms around the world –- but important for Marriott, since the same people who stay at its hotels on business might want a rental house for a bachelor party or family vacation.
“For younger generations booking group travel, it’s not who’s in charge of the hotel? It’s who’s in charge of the Airbnb?” said Michael Bellisario, an analyst at Robert W. Baird & Co. “Homesharing is here to stay. The best thing hotel companies can do is embrace it.”
Established lodging companies have increasingly sought a response to Airbnb as the app-driven home-sharing service has grown from scrappy upstart to a global giant whose private market valuation of $31 billion, bigger than most publicly traded hotel companies. In addition to Marriott, Hyatt Hotels Corp. made a strategic investment in home-sharing startup Oasis Collections in 2017, a year after Accor SA’s 2016 acquisition of luxury-rental company Onefinestay.
In some corners of the industry, Airbnb is viewed as a fearsome competitor with a large, diverse stock of offerings -- and a reputation for flouting hotel taxes and local regulations. Other hospitality executives, including Marriott Chief Executive Officer Arne Sorenson, have taken a more neutral attitude, arguing that home-sharing generally attracts a different type of traveler than traditional hotels.
Share Sale
“Many of their customers are choosing to stay with them for one reason only, and that’s because they’re cheap,” Sorenson said in a recent interview with David Rubenstein for Bloomberg Television. “We’re not really in the bottom part of the market -- our business is never going to be to provide the cheapest stay.”
Airbnb Chief Executive Officer Brian Chesky said that his company will be ready to sell shares to the public later this year in an interview Monday with CNBC. Lately, the company has used its heft to expand into new parts of the hospitality business. On Monday, it announced a partnership with New York-based developer RXR Realty to open luxury lodgings in iconic buildings, including 75 Rockefeller Plaza, and in March, it agreed to buy hotel-listing startup HotelTonight.
Marriott took an early step into the home-sharing business last May, when it launched the pilot program in London that Sorenson said would offer a “better product” than existing options. The company expanded to a handful of other cities in a bid to combine the home-sharing format -- which appeals to families and other groups -- with its loyalty program and expertise in managing hotels.
“Imitation is the sincerest form of flattery, and we welcome them to the party and wish them bon voyage,” said Airbnb spokesman Chris Lehane.
The Wall Street Journal reported Marriott’s plans earlier Monday.
--With assistance from Olivia Carville.
To contact the reporter on this story: Patrick Clark in New York at pclark55@bloomberg.net
To contact the editors responsible for this story: Debarati Roy at droy5@bloomberg.net, Rob Urban
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