Serviced apartment sector starts to embrace Airbnb

The serviced apartment sector is considering new partnerships with “shared economy” companies like Airbnb, a senior industry executive has told Travel Daily.

Speaking in Bangkok on Tuesday, Oakwood Worldwide’s managing director for Asia Pacific, Craig Ryan, revealed that his company is talking to Airbnb and other apartment rental sites.

Airbnb is “brings more product in cities”, according to Ryan

“We’re already in discussions with most shared economies, including Airbnb,” Ryan told Travel Daily. These discussions are on “two fronts”, he added, including  using sites like Airbnb as a means of distributing Oakwood serviced apartments, as well as developing new products.

“We’re… engaged in other discussions with another provider, relating to a partnership that leverages the product that they have [and] may work as an alternative product offering,” Ryan said. “I wouldn’t [divulge the company] at the moment, because it’s at early stages, but it’s an interesting conversation to have,” he added.

Ryan noted that such partnerships are now being looked at across the serviced apartment sector. For example Capitaland, which owns Ascott, is investing in Tujia, the Chinese equivalent of Airbnb.

And Ryan believes these tie-ups are being driven by the similarities between the products offered by shared economy companies and the serviced apartment sector.

“Airbnb [offers] apartment living with a localised feel. They’re offering a model of choice, they’re offering apartments in locations that are typically outside of the hotel zone – it’s very much what we do,” Ryan said. “If you look at the corporate housing market in the US, we go out and lease apartments within a building. To use Los Angeles as an example, we’re represented in the better part of 50 locations, so it’s a similar type of scenario as Airbnb.”

Craig Ryan

And the serviced apartment and shared economy sectors look set to grow even closer in future, as companies like Airbnb launch their own corporate travel programmes. Within 24 hours of its launch, Airbnb for Business had signed up 500 companies, including Google.

But Ryan warned that there is still a high degree of caution amongst many companies with regards to including Airbnb in their corporate travel policies.

“The question that comes about… is the safety and security of guests. They’re going into private homes, and while there is a rating system, Airbnb have limited ability to apply due diligence, which obviously creates concerns,” Ryan said, comparing the situation to Oakwood Worldwide’s extensive programme of checks and inspections that are necessary before a property is approved.

“But,” he added, “credit to the shared economy and particularly to Airbnb; they’ve been very active in pushing governments to develop guidelines for the industry.”

On the whole, Ryan said he believes that Airbnb is having a positive influence on the industry.

“It’s pushing us to think outside the box. It’s a good thing for the consumer; it brings more product in cities that may be restricted. And because of the price point it may be even encouraging more people to travel,” Ryan asserted. “Airbnb is here to stay. We encourage further focus on the accommodation sector as a whole, and if more people are travelling then every sector of the market will get their share.”

AirbnbCraig RyanOakwood Worldwide