Marriott, in challenge to Airbnb, to expand into home-sharing industry

Marriott International Inc. is reportedly preparing to launch its own property rental service, a move that will intensify the battle with home-sharing firms like Airbnb, which is also undergoing an expansion into the traditional hotel business.

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The owner of Sheraton, W Hotels and other brands, Bethesda, Maryland-based Marriott is poised to become the first hotel operator to launch a rental platform when it unveils the offering as early as next month, according to the Wall Street Journal, which cited anonymous sources. The company previously started a pilot home rental program in Europe that is expected to serve as a model for the U.S.

Other hotel chains, including Hilton Worldwide Holdings Inc. and Hyatt Hotels Corp., are also considering a similar move according to the Journal, expansions that would come after the hotel industry worked aggressively behind the scenes in several major cities to pass legislation to curb the use of home-sharing platforms.

Spokespersons for Marriot and HIlton did not immediately respond to request for comment. A Hyatt spokesman said the company "remains interested in providing our guests with a variety of stay experiences, including the residential space."

Meanwhile, Airbnb is expanding more significantly into the historic hospitality business as its operations face increasing scrutiny in cities and states across the U.S.

In March, the San Francisco-based firm purchased Hotel Tonight Inc., a platform that specializes in last-minute hotel rentals, often at a reduced cost. Airbnb, which operates in over 81,000 cities, is also partnering with New York City real estate developer RXR Realty on a project to create new, hotel-like properties that can only be booked through its proprietary platform.

It is also making an initial foray into the content production industry and recently produced its first film. Titled “Gay Chorus Deep South,” the documentary follows the San Francisco Gay Men's Chorus on a tour of the southern U.S. It is slated to premiere at the Tribeca Film Festival on Monday.

Airbnb is expected to seek to go public next year.

TickerSecurityLastChangeChange %
MARMARRIOTT INTERNATIONAL INC.121.05+0.48+0.40%
HLTHILTON WORLDWIDE HOLDINGS INC.91.15-1.05-1.14%
HHYATT HOTELS70.00+0.07+0.10%

Cities like Washington D.C., New York City, New Orleans and others have sought to put new restrictions on Airbnb and other firms in an attempt to curb the ballooning home-sharing industry. Marriott and other large hotel chains joined in on those efforts, often spending heavily through lobbying organizations to push local lawmakers to adopt more strict regulatory requirements.

The hospitality industry argues that some individuals who offer their homes on Airbnb are effectively operating as illegal hotels that don’t have to meet some of the same requirements as traditional lodges and say the trend is pricing out lower-income individuals from more sought-after neighborhoods.

Among other arguments, Airbnb says home-sharing can help bolster the income of elderly individuals who are unable to work.

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On top of legislative action, cities are also ramping up their enforcement efforts against Airbnb. San Francisco, for example, charged a couple $2.25 million in 2018 after they turned 14 apartments into short-term rentals.