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Overcome the cannibalising effect of the sharing economy on hotel business

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The most dramatic effect of the sharing economy on the hospitality industry is the cannibalising effect on a hotel’s business. Attempting to eradicate the problem by competing on price is not a solution. Introducing local experiences, contributing to negative PR, or remaining in denial won’t help. People will continue to buy a cheaper substitute for hotel rooms.

Competing with AirBnBs directly – now you can do it 

There is only one way you can compete and that’s putting your ads right among the ads of your competitors. Now you can do it on TheGM, thegoldenmoon.com. Simply register your rooms on our platform and when a guest searches for accommodation, your listing will appear in the search results among similarly priced properties of other local hosts. Mention the features your competitor cannot offer:

  • stability based on decades of experience
  • a predictable environment
  • hotel facilities
  • room service
  • immediate booking
  • the ability to cancel a reservation before midday on arrival day

See how much brighter the outlook becomes?

A second chance hotels cannot afford to miss

The ability to get a second chance at bookings is crucial after the first wave of euphoria about the availability of cheap rooms from local hosts has passed. Potential guests have had the opportunity to book and compare their experience with the more traditional hotel offering. The outcome might surprise you – there are plenty of guests out there that are ready to pay more for stability, predictability, and service rather than risk a ruined holiday. The size of that second wave might be as large as 20-30% of all guests that had previously booked with local hosts.

Advertising hotel rooms alongside the rooms of your closest competitors creates a massive opportunity for a hotel to reach a new market segment which prior to that was hopelessly lost. This is a second chance that hotels cannot afford to miss. Adapt. Put aside plans to advertise by brand. Advertise in the same way as local hosts do: by room, by unit, by anything you like. Make sure your hotel is ready for that second wave and that your ads appear in the right place at the right time.

Be among the first to recognise this opportunity

This idea might be not a new one. However, TheGM itself is a new marketplace which allows a business to overcome the limitations of current booking platforms. These limitations stem from the long-lasting rivalry between hotels and local hosts. It will unavoidably boil down to the fact that local hosts and hotels will eventually advertise under one umbrella.

“There is no internal contradiction between the two. Local hosts are just another category of holiday accommodation providers. The current inability to advertise together is due to artificial boundaries created by current market players to secure their market share,” said R. Kovalovs, general director of TheGM. “TheGM has removed those boundaries, and those who explore the opportunity first will gain a larger temporary advantage than those who recognise it later. So, the timer for your hotel is ticking.”

Stay on top

In the view of many experts, this trend is part of a wider revolution in the hospitality market. It’s never been more important to stay on top of current events. Subscribe to receive further free articles on hospitality industry trends, their effects on the hospitality business, and ways of coping. Share your thoughts with us and your colleagues to see what they think. Whether they prove to be right or not – you will always know where to come back.

 

 

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21 Comments

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    Hi,

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    Best wishes
    Your Moon Team

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  16. Ruslans May 2, 2020

    This article was updated on 1 May 2020. Read its new version: “Overcoming Cannibalising Effect 2: New Ways to Compete”: https://www.thegoldenmoon.com/blog/overcoming-cannibalising-effect-2-new-ways-to-compete/

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