Bangkok, Thailand - June 6, 2016 : Apple iPhone5s showing its screen with popular travel applications.

HAC on the Attack

susie.grynolAnyone who has read my columns on the topic of alternate lodging providers knows that I have my qualms with Airbnb. While I have the utmost respect for this organization and am in awe of its marketing prowess, I am increasingly concerned that its rapid growth is occurring at the expense of the more traditional accommodations industry.

Not to be a luddite insofar as stubbornly standing in the way of logical industry disruptors and the inevitability of technological progress, my anxiety stems from the fact that most hoteliers are less worried than I am about the company that just may be the harbinger of their own demise.

No matter how much I express concerns regarding Airbnb, in the back of my head it is particularly amusing as I appear to be more apprehensive for the future of the hospitality sector than those individuals who are actually responsible for generating room revenue. And frankly, as this past year has been a banner for most hoteliers, they have had little to worry about.

Or at least that’s what they think. Like termites eating away at the foundations of your home, you may not be able to experience the effects of the sharing economy until it is too late to do anything about it. In my mind, we will soon reach a tipping point where traditional hotel properties can no longer sustain enough brand equity amongst the younger generations – those individuals on the prowl for newer, trendier and cheaper accommodations – to stay afloat once these demographics assume a primary role in economic consumption.

But enough of my hellfire and brimstone; let’s touch base with someone who actually knows something concrete about all this insanity! Recently, I had a lengthy conversation with Susie Grynol, President of the Hotel Association of Canada (HAC). Thoroughly versed on the situation, her approach is commendable and, as she reports, parallels similar efforts being undertaken by American Hotel & Lodging Association (AHLA).

While not to steal their thunder, the first phase of HAC’s plan is to garner a comprehensive understanding of the situation via research. HAC is fielding an extensive study to gather current data on the state of the short-term rental industry. While Canadian in scope, I expect that this can be extrapolated for the US lodging environment. Results will be publicly released in the fall.

Other HAC actions involve building awareness around the unintended consequences of this underground industry on communities, guests, businesses and governments. Ms. Grynol’s approach is to expand support via face-to-face meetings with Members of Parliament and Senators. The one-on-one approach, while more time consuming, allows for a deeper dialogue and a more comprehensive understanding of the societal and economic implications of alternate lodging providers. I applaud this plan because, given the budgets involved, it would be near impossible to compete with Airbnb via a media-focused, consumer-centric campaign.

Ms. Grynol’s message is quite simple: level the playing field, build fair rules and bring the sharing economy above ground. Hotels are happy to compete based on service, quality, experience and price, but not with one hand tied behind their backs. Her focus is on the ‘commercial operator’ who runs multiple units or whole buildings within the Airbnb platform on a scale equivalent to that of a hotel.

It is no longer merely home-sharing if it does not involve one’s home, she argues. What’s occurring, more accurately, is that residential housing is being repurposed into Airbnb units which in turn is putting pressure on affordable housing in urban centres, thereby disrupting communities and neighbours as well as risking the health of guests.

Moreover, the revenue from these underground businesses does not contribute – like every other aboveboard Canadian business – to governments at any level. Governments need to build some good public policy to deal with these issues – and fast!

While I’m excited to hear of this top-level activity, it in no way means that you can backpedal your responsibilities at the municipal level. Continue to push your local association to meet with city or regional officials to institute what I call ‘regulatory parity’ – that is, licenses, inspections, tax payments (both by the property as well as the guest), business filings and adherences to all zoning bylaws. In effect, push to consider these new outlets as traditional ‘bed and breakfasts’, where there should be an established trail of regulation to enforce.

I look forward to being able to report on HAC’s success in Canada, and hope that it can also serve as a model for activity south of the 49th parallel. You’re on track Ms. Grynol!

(Article by Larry Mogelonsky, published in HotelsMag on July 21, 2017)

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