How Hotels Are Starting to Imitate Airbnb

Dec 22, 2016

Over the years, Airbnb and the hotel industry have largely maintained a nonaggression pact. The incumbents tended to pooh-pooh the potential threat posed by the upstart, and the upstart insisted it has absolutely no desire to take business from the incumbents. “For us to win,” Chesky is fond of saying even today, “hotels don’t have to lose.” Until now, that’s been largely true, with Airbnb enjoying astonishing growth and the hotel industry reaching record occupancy in 2015.

But, increasingly, each side is making incursions in the other’s terrain (not to mention more contentious efforts, as the hotel lobby funds the regulatory fight against Airbnb). Chesky’s company has designs on the lucrative business-travel market, courting corporate customers like Google (googl) and Morgan Stanley (ms) and creating a new classification of “business travel ready” room options.

And the hotel chains are starting to experiment with ways to tap into the “home-sharing” boom themselves. In 2016, AccorHotels, the France-based parent of Raffles, Fairmont, Sofitel, Swissôtel, and others, acquired the short-term-rental startup Onefinestay, which offers luxury accommodations in private homes with the high-end service of a hotel. Accor also invested in Oasis Collections, another startup pushing a “home-meets-hotel” concept.

Airbnb-style individualism is seeping into hotels, with more seeking to customize the look of individual rooms—once anathema in a business that thrived on uniformity—and granting employees more latitude in how they interact with customers to inject more “humanity” into the experience. Thomas Cook is experimenting with a “Casa Cook” hotel, which the company describes as “like staying at a friend’s house, where the kitchen is always open.” A microchain, Freehand Hotels, offers separate—or shared—rooms to appeal to the budget-travel set. Last year, Choice Hotels (chh), which owns Comfort Inn, EconoLodge, Quality Inn, and other brands, launched Vacation Rentals by Choice Hotels, a partnership with vacation-rental management companies, to offer an alternative to hotel rooms.

Read more about Airbnb in our feature "How Airbnb Found a Mission—and a Brand."

Big Business has often joined disruptive trends—­frequently after discovering they can’t beat them. In recent years, after shaving-club newbies Dollar Shave Club and Harry’s struck a chord with millennials, Gillette started its own alternative, and Unilever (ul) bought Dollar Shave Club for a reported $1 billion. And packaged-food giants have hustled to catch up with the shift toward natural and organic offerings: Campbell Soup Co. (cpb) acquired Bolthouse Farms and Plum Organics, and meat-­processing giant Tyson Foods (tsn) went so far as to take a stake in a plant-based, protein-alternative startup called Beyond Meat.

Of course, the same has happened before in the hospitality industry. It wasn’t that long ago that boutique ­hotels—Ian Schrager’s ­Morgans, which opened in New York City in the 1980s was one of the first—were considered revolutionary. Now almost every hotel company has its own twist on the concept. So will we see “At Home by Marriott” or “Hilton Home-Shares”? Not tomorrow. But maybe sometime soon.

Excerpted from The Airbnb Story: How Three Ordinary Guys Disrupted an Industry, Made Billions...and Created Plenty of Controversy, by Leigh Gallagher, to be published on Feb. 14, 2017, by Houghton Mifflin Harcourt. Copyright ©2017. Used by permission.

A version of this article appears in the January 1, 2017 issue of Fortune as part of the "How Airbnb Found a Mission—and a Brand" feature.

Adapted from the upcoming book The Airbnb Story: How Three Ordinary Guys Disrupted an Industry, Made Billions … and Created Plenty of Controversy, by Leigh Gallagher, to be published on Feb. 14, 2017, by Houghton Mifflin Harcourt. Copyright ©2017.

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