NEWPORT BEACH, CA—Hoteliers have banded together to bring out the unlevel playing field they are on with Airbnb in terms of regulations, and it is also focusing on social spaces, customer service and consistency in its product, R.D. Olson Development's president Bob Olson tells GlobeSt.com. Olson says there are various regulations over the hotel industry that do not yet govern Airbnb, putting the sector at a disadvantage businesswise.

R.D. Olson was recently named Developer of the Year by Marriott International at the hotelier's Annual Owners Conference at the J.W. Marriott in Los Angeles. The prominent national award recognizes the “best of the best” and spotlights the company's accomplishments for the development of hotel projects in high-barrier markets such as California and Hawaii. We spoke with Olson about the threat of Airbnb to hoteliers and how this sector can stand out at a time when the sharing economy is gaining ground.

GlobeSt.com: How much of an actual threat to the hospitality industry is Airbnb?

Olson: We see Airbnb as a threat because they provide a room supply in the market. There's a lot of defense being played in our industry that ranges from trying to shut Airbnb down to hitting them with press. The reality is that Airbnb is getting better at their game. It's smart for us to realize as hoteliers what is drawing guests to the Airbnb platform. The best thing we can do is focus on what it is that customers want.

Marriott is the best in the business at research of what customers' actual needs are. They do customers' study groups and listen to the feedback of what people are looking for. Marriott, through its Starwood platform, is coming up with pretty creative things to release shortly. But we have to focus on providing service to our customers. Where do we win on competition? Where we can't win is being a single-room supply hotel, but by creating great social spaces for our guests to be. We can also provide consistent and clean rooms, where you know what you're going to get: a clean room that will be ready when we say it is, where you know where the key is.

On the other hand, we will not be able to provide the uniqueness of Airbnb. If you prefer the Airbnb experience, we just can't meet that; we're not equipped to do that. So, is that a customer we've lost or a new customer that's been created who would have otherwise stayed in a friend's house or in a rental house. No doubt, when big events are happening—like the Super Bowl, which was in the San Francisco Bay area a year and a half ago and took away the cream of rooms to be booked—hotels did not fill up because Airbnb people were renting out their whole houses to make money to make a few house payments. This took off the cream of the highest rates. We need to just learn from that: how do we take that forward? We'll not shut them down—they have smart people in there, hotel people—but there are more things for us to roll out.

GlobeSt.com: How are hotel developers and partners are banding together to strengthen the hospitality industry despite the rise of Airbnb?

Olson: We are a very regulated industry. We pay bed taxes; there are strict labor laws to abide by and all the handicap-accessible provisions we need to meet. We have to have fire life safety, etc.—things with which Airbnb is not faced. Is that fair? Is that right? Our industry as a whole has banded together to bring that out. If we have to have handicap-accessible rooms, what about someone showing up to an Airbnb room with a handicap? What about fair treatment? These are important issues out there. We have fire life safety inspections—at a minimum annually—and elevator permits; all things that go toward providing a safe environment for guests. With Airbnb, in most cities there are no regulations, no inspections on accessibility and safety. It's not a fair playing field, in our opinion.

GlobeSt.com: What can the hospitality industry offer guests that Airbnb can't?

Olson: We think the answer to that is providing an easier selection of services. We have travel rewards that are available. That said, we're certain that Airbnb will figure that out, will adapt and change and find ways to compete. It's run by smart people. Today, guests can stay on business trips and find themselves taking the family on a beautiful vacation; with the Starwood platform, they can stay for free based on their rewards points. It's the best rewards system in the industry, and that's hard for Airbnb to compete with. You can go from the Ritz Carlton to the St. Regis across the bandwidth of some 30 brands.

GlobeSt.com: What else should our readers know about this topic?

Olson: We're focusing on what we do best. We expect Airbnb to continue to prove their platform; we just have to keep providing the best service for customers. Hotels that don't step up their game will lose.

Instant Insights /

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