Hotel Threat:

Airbnb is not only worrying landlords if this report from Property Week is anything to go by: hotel owners in particular are worried about the impact the rising popularity of Airbnb. The home stay website is having a big impact on their business model.

Ask anyone, says Property Week, and “the chances are either they or someone they know will have stayed in an Airbnb property but, as data has revealed, the main barrier to entry is simply those who have not heard of Airbnb.”

Some are forecasting that soon more business travellers will be using Airbnb, so is it just competing directly with cheap hotel rooms? Is it just price that’s the factor?

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No says the article. “People now wish for a more authentic experience and are embracing the option of staying in a real home rather than a faceless branded hotel.  So there is a definite shift in attitude.  At the recent annual hotel conference in Manchester, James Bland (director of brand experts BDRC) revealed that Airbnb now ranks as the seventh most recognisable hotel brand in the UK – behind brands such as Hilton, Ibis but ahead of brands like Sofitel and Mercure.”

Some hoteliers may be in denial, claiming that Airbnb will not impact on their business. Others have somehow reached the conclusion that Airbnb will complement their business, as seen, says Property Week, by Accor’s purchase of OneFineStay.

Like Uber in the taxi world, these disrupter businesses have elsewhere been criticise amid calls for harsher legislation and regulation by government in terms of taxation of the owners, increased health and safety and security requirements and overall consumer protection.

The problem for them is that London adopts a light touch when it comes to property legislation where it affects short-term lettings, as seen by the relaxation of short let requirements, which were brought in ahead of the 2012 Olympics.

There have been recent cases where flat owner in London have been forced to stop letting out their properties as Airbnb providers, but these have been because of lease restrictions, not statutory rules. No doubt there will be more individual cases of this where freeholders or neighbours litigate against leaseholders letting in this way.

But at least one hotel it seems has though “outside the box” on this; Hotel GM is pioneering a new strategy where they work together with Airbnb. Trowers & Hamlins advised on the hotel on this initiative.

So how does this work?  The hotel provides cleaning, front of house and maintenance services but is careful to offer these services on flexible terms and in a way that minimizes its own liability.  Being involved in this collaboration between a hotel owner and an Airbnb provider underlies our overall support for the sharing economy and development of the hotel industry in this way.

By Stephen Marks, partner in commercial property at Trowers & Hamlins

2 COMMENTS

  1. This is an excellent concept, which should be of benefit to developers during conversion and void periods, particularly taking account the Valuation Office Agency\’s interpretation and robust application of Newbigin v Monk. However, I have discussed the concepts of Guardians and Council Tax Banding opposed to full Business Rate Listings with a number of case officers, whom were ignorant with no experience of this concept. It would therefore seem essential to have clear guidance from the VOA on their policy for conversion of business premises to Council Tax Bandings in appropriate circumstances.

  2. Hi,
    Do you have experience of sound proofing listed buildings?
    It is a recent conversion of a building into three flats however the ceiling and light fitting vibrates.
    There are cracks appearing also?
    Best advice would be appreciated.
    Thank you

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