The commercial real estate industry is rethinking its traditional business models. With Marriott entering the home rental business, the lines are now blurring between home sharing and hotels for major brands in the industry.
In recent headlines, it was announced that Marriott has become the first major hotel company to break into the short term rental market. The leading hotel brand is aiming to take on this lodging segment’s pioneer, Airbnb, by offering stays in thousands of luxury homes throughout 100 markets across three continents.
With the home-sharing market growing at twice the rate of hotels, it’s no wonder why Marriott is branching into the home-rental business. According to Stephanie Linnartz, Marriott’s chief commercial officer, her company is changing to meet consumer demand which is contributing to the success and market growth of home-sharing. Home rentals offer what lodgers are seeking in the 21st century – a personalized travel experience in the age of the “sharing economy”.
On the other hand, Airbnb is switching roles and moving into Marriott’s domain of the traditional hotel space. They are partnering with commercial real estate company, RXR Realty, to begin offering stays in ten of the floors at 75 Rockefeller Plaza in order to create a travel experience for business travelers.
RXR CEO Scott Rechler states in Commercial Observer, “With the lines between business travel and leisure travel becoming increasingly blurred, RXR and Airbnb are offering a travel experience that immerses guests in a dynamic, thriving community in the heart of Rockefeller Center that’s vastly different than anything else in the market today.”
New players are entering the space too. Startups like Domio, Lyric and Sonder are approaching the short-term rental business differently. Instead of guests renting someone else’s home or apartment, (a la Airbnb) they are leasing floors and fitting apartments with high-end furnishings and amenities.