IOC’s Airbnb deal highlights accommodation conundrum
Delegate housing has become a rather vexed issue and it was given a fresh twist this week when the International Olympic Committee (IOC) signed a $500m sponsorship deal with Airbnb.
As part of the deal, which covers the next five games until 2028, the IOC is pledging to make at least $28m worth of Airbnb accommodation available to athletes at the Olympics and Paralympics.
But the move has already upset hoteliers in Paris, hosts of the 2024 games, who have suspended their collaboration with the games’ organisers on the grounds of unfair competition.
It has also drawn the ire of city officials who blame Airbnb for pushing up rental costs.
The French capital is one of Airbnb’s biggest markets with around 60,000 listings, up from 4,000 in 2012, and mayor Anne Hidalgo had previously written to the IOC outlining her concerns.
She has expressed her ‘determination’ to rein in Airbnb and even ban it in parts of central Paris.
Her unease echoes those of Barcelona’s mayor Ada Colau, who put a cap on the number of new short-term rentals available in the city following complaints from residents and questioned the city’s support for the annual Mobile World Congress, which attracts 100,000 delegates to the city.
But the rise of short-term letting sites is just one aspect of an increasingly complex conundrum facing in-house congress organisers and professional congress organisers (PCOs) alike. Particularly those responsible for large congresses, which attract thousands or tens of thousands of delegates.
Group or ‘block’ bookings in hotels are in steady decline, in part because delegates, in search of a more ‘authentic experience’ or greater flexibility, are choosing to book their own accommodation. Websites like booking.com and Lastminute.com had already made it easier for delegates to secure their own deals before the likes of Airbnb came along and moved the goal posts again.
But delegates who book their own accommodation – or go ‘round the block’ – are a thorn in the side of meeting planners who end up paying attrition fees for unoccupied hotel rooms. The circle is a vicious one. To minimise the risk of paying a penalty, planners end up block-booking a smaller number of rooms, which reduces their bargaining power. The result? Everyone, except the independent delegates who found their own lodgings ends up paying a little bit more.
The picture has been further complicated by major hotels groups such as Marriott, Hyatt and Intercontinental who, eager to protect their inventory, have been slashing commission rates for third-party event planners – typically from 10 per cent to around seven per cent, although other hotel chains, sensing an opportunity, have increased their commission rates.
Add the stress of dealing with early cut-off dates – after which hotels reclaim unsold rooms in the block – and it’s any wonder congress organisers don’t just throw in the towel. Some are: one in-house congress organiser for a large medical association summed up her decision to drop accommodation from her list of things-to-do in four words: ‘Not worth the hassle!’.
Tempting, then, to let delegates take care of their own accommodation and have done with it. But if that means putting more money into the pockets of short-term rental firms and upsetting the host destination, associations may just be swapping one housing headache for another.
Published Date: 22/11/2019