'Risky Business' a.k.a. Airbnb’s venture into the hotel industry

Kissimme, Florida will be the first city to experience the new hotel-styled Airbnb starting next year. The company has began collaborating with the firm Newgard Development Group to open a 324-unit building that will feature hotel-like amenities, including a concierge, housekeeping and check-ins. (Open Grid Scheduler - Grid Engine/Flickr Creative Commons)

Spare rooms, empty homes and even the occasional treehouse make Airbnb the authentic, accommodating house sharing service its customers have come to love. Why, then, has the company begun venturing into the hotel industry? Although this could improve business, it will both jeopardize their originality, as well as jeopardize the current hotel industry.

Kissimme, Florida will be the first city to experience the new hotel-styled Airbnb starting next year. The company has began collaborating with the firm Newgard Development Group to open a 324-unit building that will feature hotel-like amenities, including a concierge, housekeeping and check-ins. Branded as an Airbnb building, this first “hotel” will be called Niido.  

Although this new development will help to expand business by opening more units and accommodating guests who prefer hotel-styled housing, it blends Airbnb into the hotel industry debasing it from its unique character.

The travelers who prefer hotel-like amenities but still choose to book an Airbnb hold higher expectations for the places they rent, such as fresh linens and privacy. While the company must place a set of standards on each of their hosts, the higher expectations from travelers leave hosts to manage more rules, fees and guidelines.

Airbnb began business in 2008 when it became marketed as “a trusted community marketplace for people to list, discover and book unique accommodations around the world.” The company has excelled as a part of the sharing economy, like companies such as Uber and Lyft, and boasts a valuation of more than $30 billion. Even with a valuation that high, like most businesses, they still seek to attract more customers.

"Traditional providers see the rise of Airbnb as an attack," said Jeffrey Margolis, a partner at the Berger Singerman law firm who works in real estate law.

Before Airbnb began venturing into the hotel industry, they had already proved themselves a threat by surpassing valuations of the biggests hoteliers on Earth. The biggest names in the hotel industry, such as Hyatt, Marriot and Hilton, can barely compete with Airbnb.

Although Airbnb needs to put in efforts to maintain good relationships with both hosts and renters, they should reconsider the methods in which they are using to do so. Airbnb is known for providing a unique experience with each stay by allowing individuals to offer their own authentic home, spare room or even treehouse. When the company begins to build hotels and reorganize to have a more uniform style of housing, the unique character that they have built will diminish leaving them to be just another hotel.


Emma DeGrandi is a contributor to The Daily Campus opinion section. She can be reached via email at emma.degrandi@uconn.edu.