Thriving in the age of the sharing economy
There is little doubt that the sharing economy has had a massive impact on the nature of the hospitality industry, and recent developments signal yet even more change is on the horizon.
Last week hospitality group Marriott International made the announcement that it will soon be launching its new home sharing vacation rental program, called Homes & Villas.
The new offering brings the company into the territory of short-term rental players and could be regarded as the “hotel-ification” of the home share concept – the very business model that has been blamed for eating away at hotel industry profits in recent years.
Meanwhile, Airbnb, considered by some as the kingpin of the short-term rental property market, has recently embarked on a new partnership with major New York real estate developer RXR Realty, to convert portions of New York City commercial properties into a new category of urban lodging.
The first project is RXR’s 75 Rockefeller Plaza, where 10 floors of the office building will be turned into suites meant to toe the line between apartments and hotel rooms in the heart of Midtown Manhattan.
The hybridisation of the business structures of these two hospitality groups is by no means isolated – dozens, if not hundreds, of ancillary companies are popping up, offering an array of new services and different ways to travel.
The sharing economy is also disrupting the commercial real estate market, with building owners and occupants becoming increasingly open to the possibility of sharing, and the need to share under-used workspace.
Players in both markets are understanding that there is opportunity where there was once challenge, and the wider building and architecture industry – developers, investors, and advisers planning mixed-use, hotel and residential developments – should be taking note. And not just in New York, but in any densely populated city where demand is high and price per sq ft is a driving factor in real estate decisions.
Unlike today, future buildings will need to be able to accommodate short-term and long-term tenancies with different needs and requirements, all under one roof.
The design of buildings in the future will very much need to be adaptable and flexible; spaces that can be converted easily for sharing purposes will be in high demand should the current trends continue.
Turning existing or heritage listed assets into co-working and co-living friendly buildings poses a greater challenge, but the advent of the sharing economy looks prepared to introduce significant advancements to our buildings and communities.
The continued success of the sharing economy in mature markets such as the US and UK shows that further change is inevitable, which gives industry a great opportunity to innovate and reinvent itself once more.