The last hotel of the world closes its doors
Hamburg, Germany – October 2016 – A cheeky interjection of Carsten Hennig, Managing Editor Europe
In November 2032, the world’s last commercial hotel will close its doors. This disastrous development started on September 23rd 2016, just after Airbnb had announced another funding round with more than 550 million dollars. – Before you now turn your back on this reading of dark foreboding, please give me a chance to clarify the revolutionary market changes with a precise illustration of my assumptions. Expressed disagreement is strongly requested!
Airbnb, the globally hated distributor of private housing, won the race of digitizing accommodation. Although they are still far away from operating profitably, more and more sponsors invest in further developing the booking portal. People ignored warning words of investor legends like Warren Buffet. Even hotel investor veterans like Barry Sternlicht, the founder of Starwood Hotels (the group did not exist anymore in autumn 2016), further counted on business hotels – with heavy losses, as known today.
First premonitions about dramatic market changes could be noticed at the end of 2017, when the US family Marriott sold major shares of their hotel group. Just as a reminder, Marriott once used to be by far the largest hotel group worldwide. They switched branches with great skill and empathy and converted a large part of their centrally located lodging properties into comfortable residential homes for wealthy ‘best agers’ and rehabilitation centres for elderly people.
Overnight stays away from home have long become a private issue –highly professionalised, though. When the first management trainees quit their jobs and became self-employed professional hosts, providing furnished apartments and small flats in urban areas, this was only worth a side note for experienced market observers.
Of course, there are still some hotels today but totally different than assumed. Booking, check-in and supply with laundry and breakfast automatically work with smartphones and delivery drones.
However, the personal requirements for hosts have become completely different over the years. Every host turned into a sales director and his profiles in social networks became booking factors, true to the motto: “I am your best host”. Only, the hotel evaluation system, which was oriented towards individual personalities, turned out to be a legal challenge at the beginning: First landmark decisions were meant to prohibit this kind of review completely. However, it was very interesting to see that people ignored them anywhere in the world.
The global accommodation market became increasingly important and offered great opportunities for several founders and service providers. Also the Airbnb-academies gained enormous attendance with the aim of educating and training the hosts in popular campus locations like Munich, the old town of Dublin and Malta. Moreover, franchisees, like former private hotel schools, earned plenty of money by proactively shifting their study programs to Airbnb – “the google of hospitality”.
Several market players, who tried to make private hosts independent from Airbnb by offering direct booking opportunities, could not succeed on the market. Classical SEO and SEM measures of early digital revolution years were replaced by PR strategies and storytelling trainings faster than anticipated. Newcomers from finance, who used to be very successful in finance product sales, quickly overtook many new hoteliers.
By the way, the last commercial hotel of the world was a Hilton HHonours in a small town in the US Midwest market. The hotel operator was supposed to be a distant relative by marriage of the former hotel king Conrad Hilton. He had won a legal dispute with Hilton respectively their descendants and name-owners and operated his own hotel concept. His idea proved robust to graduate room prices according to the score of their customer loyalty program. Up until recently.
The group management of Airbnb still refuses to introduce loyalty-marketing programs for purely commercial reasons. According to rumours, the yearly profits – which haven’t been published anymore since 2018 – are amounted to trillions of US dollars. The manageable number of Airbnb shareholders is ever since obliged to absolute secrecy under substantial penalties. Observations revealed that they enjoy a life in prosperity.