Private rentals now account for almost one in three overnight stays in Australia, according to a report just released by Deloitte Access Economics.

The second edition of the Tourism and Hotel Market Outlook for 2017 notes that overnight stays in private rentals have grown nearly twice as much as stays in hotels in the past 12 months. 85 million nights were spent in traditional hotel accommodation in the year to March, while the private rental market accounted for 28.5 million nights, an increase of 40 per cent on the previous year.

With 122,500 active listings in Australia, Airbnb is the country’s second-largest private rental provider, followed by Stayz, which boasts 40,000 listings. STR Global hotel data estimates that Australia has 267,690 available hotel rooms, meaning hoteliers have genuine reason for concern.

Currently the Australian hotel market feels the biggest impact on key market restrained days, with the surplus availability of beds reducing the premium demand on those peak days and lessening the opportunities to yield up.

So, what can hotels do to compete?   

One of the key opportunities to compete against Airbnb is the exact thing that made the billion-dollar company what it is today: technology.

Technology connectivity through mobile devices has created a generation of travellers that are more tech-educated and savvy than ever before. Gone are the days when hotel sales and marketing professionals could rely on beautiful photography and in-person sales to drum up business; now they must innovate and adapt to new platforms or run the risk of not converting revenue.

There is a real opportunity for hotels to increase their use of smart devices. These devices can play an important role in increasing guest brand exposure and can build brand affinity.

If hotels can push for incremental increases in revenue by having consistent frictionless experiences supported by technology platforms, the result will be more revenue and a superior guest service not provided by Airbnb.

Sure, there are operational technology stacks including cloud-based reservation systems, wireless room key cards and loyalty apps already being used by hotels, but with consumer-based technology rapidly evolving and the advent of artificial intelligence smart speakers like Google Home and Amazon Echo, the ‘internet of things’ has landed and should be coming to your hotel rooms.

The day has come when the only smart device in your hotel room isn’t the phone in your guest’s pocket. It means that the room’s TV, the temperature, the lighting, the curtains, will all be connected via the Internet and controlled by the guest.

“Coming soon is Connected Room, the first truly mobile-centric hotel room,” Hilton CEO, Christopher Nassetta, said recently.

“Through the app, members will be able to seamlessly control their room’s lighting, heating, ventilation, air conditioning and entertainment options including pre-loaded and streaming content.”

All of these are services not provided by Airbnb.

Moving forward, the hardest things for hoteliers will be convincing their owners that technology is the right capital expense in which to invest and identifying the right level of technology for their properties and guests.

At the very least, properties should boast a basic ability to remotely control lighting and temperature, or hoteliers will risk losing guests due to irrelevancy and losing their loyalty and the revenue provided by the important emerging demographic: the next-generation traveller.