Marriott is challenging Airbnb with its own home rental offering (MAR)

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Marriott International is launching a home rental offering that will feature 2,000 "premium and luxury homes" in more than 100 locations in the US, Europe, Caribbean, and Latin America, according to a press release.

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The initiative, called Homes and Villas by Marriott International, will see Marriott work with property management companies and their listings, and it follows a successful pilot program Marriott ran in Europe in 2018.

Here’s what it means: Marriott is looking to compete with Airbnb in the home sharing market, and it has distinct strengths and weaknesses as it launches this offering.

Marriott’s reputation, its listings’ quality, and its loyalty program may attract consumers. The hotel operator is well established, which could help it garner trust among consumers who are wary of home rentals, encouraging them to try renting with Marriott over other services. Meanwhile, the company’s plan to make sure each listing has hotel-like amenities, such as free Wi-Fi and professional cleaning services, may help it convince even more consumers. And Marriott’s plan to let its loyalty program members earn and redeem points at these homes can attract consumers to its offering over competitors’ because they’ll be able to bolster their loyalty accounts and save on any type of listing.
But Marriott needs thousands, if not millions, more listings to be a true competitor, and its standards may make adding them difficult. Airbnb has 4.92 million units, while Marriott’s entire business has just 1.29 million, according to data cited by The Wall Street Journal. With just 2,000 initial home rental listings, Marriott is clearly far behind. And the hotel operator’s plans to work with property management companies and have them offer high-level amenities and meet other standards will make it difficult to amass the selection Airbnb has thanks to its more open platform.

The bigger picture: Marriott and Airbnb are moving into each other’s territory, though both have a long way to go before they’ll be evenly matched.

Airbnb has been adding more offerings that can compete with hotels as its battle with companies like Marriott heats up.It’s launched Airbnb Plus, which offers high-end listings with strict hotel-like features, introduced Airbnb For Work to court business travelers, and acquired hotel-booking service HotelTonight — all of which aim to win consumers away from traditional hotels. But just like Marriott in the home rental space, Airbnb lacks experience, listings, and more in the hotel business, so these services likely won’t make it a direct competitor in the hotel space right away. It’s clear, however, that both Airbnb and hotel operators are bolstering their offerings to better compete with the other going forward.

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