Airbnb is definitely moving into new – and more luxurious – territory! Airbnb and RXR Realty have recently entered into a partnership toward the conversion of 10 floors of 75 Rockefeller Plaza into the first contemporary luxurious lodging.
The upscale rooms – there will be 200 units, according to the companies – will be on the higher floors of the iconic 87-year old landmark in New York City. The 32-story tower has excellent views of many of the Big Apple’s landmarks including St. Patrick’s Cathedral. The Airbnb rooms will likely provide guests with a birds-eye view of the annual Christmas tree lighting, too.
The allotted floors for the Airbnb accommodations will be transformed into fully-furnished hotel rooms complete with living rooms and kitchens. The rooms will probably fit into the definition of urban accommodation or apartment hotels, which are popular in metropolitan cities.
The Rockefeller Plaza rooms will only be available for booking on the Airbnb platform. These upscale apartment suites, as Airbnb calls them, will be a significant step up from the typical Airbnb accommodations, such as in homes, condos and apartments.
According to their agreement, RXR Realty will be responsible for the management of the suites and the site while Airbnb will be in charge of the marketing and management of room reservations.
The day-to-day operations will be handled by a third party operator.
Both have insisted that the project is in compliance with the rules and regulations regarding unions and operations, as well as the rules enforced by the New York Hotel Trades Council.
The assurance was apparently made in relation to the restrictions that Airbnb, among other home-sharing services like Homestay, FlipKey, and Wimdu, is dealing with in relation to its short-term rentals business model. These restrictions include Airbnb being required to disclose detailed information about their listings, which doesn’t sit well with the company.
This isn’t the first time that Airbnb has formed partnerships with property developers for the development of Airbnb-branded apartment complexes. But it’s the first time that Airbnb will be collaborating with a property developer on hotel-style units.
Airbnb has, however, ventured into the traditional hotel sector albeit in a quite different manner. On February 2018, the privately-held company signed a partnership with SiteMinder, a client acquisition platform used by hotels for attracting and booking guests from around the world.
Under the SiteMinder and Airbnb agreement, hotels using SiteMinder can list their rooms on the Airbnb platform provided that these rooms meet the latter’s hospitality standards. The new technology, which was jointly developed by the two companies, allows hotels to reference their rooms to the platform in real-time.
Cameron Houser, Airbnb’s Program Manager for Hotels, said at the time that, “Small hotels and B&Bs have long used Airbnb and now we’re building new tools and partnerships to help these local businesses thrive.” Airbnb, he added, is “dedicated to working with small hospitality businesses” that offer the “best guest experiences” and live for its “mission of belonging”.
Mike Ford, the Managing Director and founder of SiteMinder, said that, “In an increasingly-complex and competitive world, SiteMinder’s partnership with Airbnb offers a new opportunity for boutique hotels and bed and breakfasts to engage the growing number of travellers who seek exceptional hospitality and an authentic local experience.”
On March 2019, Airbnb announced plans to acquire HotelTonight, a hotel booking site, in order to increase its platform and compete on a more even footing with major traditional hotel chains.
With these new partnerships, Airbnb appears set toward the achievement of its ambition of becoming the world’s foremost global travel platform. These are also in line with its plans of expansion through diversification, thus, its new line of offerings that include luxury properties and boutique hotels.
The company is also facing increasing competition from others including traditional hotels and online travel agencies. There’s pressure on it to do more and do better, perhaps even do them faster lest its competitors get the upper hand. Toward this end, the company has labelled itself as an end-to-end platform, not just your standard home-service sharing company.
Airbnb’s push into the traditional hotel sector can also be understood by its desire to work better with regulators. Its business model has created tensions between its officials and government regulators, especially in large cities like New York and Paris.
There are also other changes that Airbnb will likely undergo in the near future.
Nathan Blecharczyk, Airbnb co-founder, recently said that the start-up is taking the necessary steps in going public. But he also emphasized that it doesn’t mean that Airbnb will, indeed, go public in 2019.
When Airbnb eventually becomes a publicly-traded company, it wants to be seen as a travel super-brand. The partnerships and acquisitions that it has recently undertaken will go a long way toward the achievement of its super-brand ambition.
There will be challenges along the way. Airbnb, for one thing, has to improve its image while still preserving its core business.
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