Marriott Homes in on Homesharing
Marriott will not go gently into that disruptive night of home sharing – rather the company is taking measured steps to become a player in the space itself. Last month, the company announced that it was testing home sharing in London with roughly 200 Tribute Portfolio Homes through a partnership with Hostmaker, a London-based property management company.
Marriott is joining the ranks of AccorHotels and Hyatt Hotels – both hotel groups have launched home sharing initiatives. Accor united three home rental brands – Travel Keys, Squarebreak and Onefinestay – under the Onefinestay brand at the end of 2017. In March, Hyatt announced an extension of its World of Hyatt loyalty program to the home sharing space allowing members to earn and redeem World of Hyatt points with Oasis, a serviced home rental accommodations company that offers more than 2,000 personally vetted homes across more than 20 destinations worldwide.
During a recent first quarter earnings call, Marriott CEO Arne Sorenson gave more color to the company’s plans in the home sharing space, admitting that the company will integrate home sharing offerings into its loyalty programs. Sorenson vowed that Marriott would be a differentiator in the home sharing space, “Curating for design, functionality, location and safety, and providing the commitment to service and quality that is not typical in this space.”
Marriott’s entry into the space should not be ignored. As the largest hotel company in the world, operating or franchising more than 5,700 properties and 1.1 million rooms, it’s telling when the Goliath in the room is considering the David’s strategy one with potential.
So why not sooner?
Sorenson provided some insight to the company’s restrained approach noting that with the London test underway, they were anticipating learning “considerable lessons” and are optimistic that there will be expansion into other cities and a focus on the higher-end markets.
“Our plan for home sharing is to learn as we go here a little bit, but we want to make sure we are delivering a high-quality service experience, and we want to make sure we're delivering whole homes,” Sorenson explains. “It's a place where branding can make a difference. It's a place where we can deliver an experience both in terms of service and quality that we want our customers to have. It’s a place where we can feel really good about connecting it to the loyalty program.”
Sorenson admits that the whole home space is markedly different from a standard hotel room – one of the reasons he views this as a good market to add, noting early favorable responses from customers.
Another reason for Marriott’s trepidation at taking a counter shot at the room sharing business model, was that, according to Sorenson, the industry is not legally compliant in many cities, states and countries.
“It's one thing for a start-up to engage in a business that really does not comply with law, it's another thing altogether for a 90-year-old company like Marriott to step into a business, which is fundamentally illegal,” he states.
Sorenson reports that the Marriott model fully complies with laws particularly those involving payment of taxes and regulatory requirements. Marriott plans to leverage its power of branding to bring a service and product focus to what for other platforms has resulted in a “paralyzing array of choices” ultimately delivering what, according to Sorenson, will be a “better product than much of what is out there.”