Marriott throws shade at Airbnb during Q1 earnings call

Though Marriott International is only a couple weeks into its pilot of home rentals in London, CEO Arne Sorenson said during the company's first-quarter earnings call on Wednesday that it's "off to a great start."

Sorenson said the plan for Marriott's home rentals business is to learn as it goes, ensuring that the company is delivering a high-quality-service experience renting out "whole homes"-- no spare bedrooms or air mattresses here. "Within a few months, we should be able to learn considerable lessons from what we're doing in London," Sorenson said. "If it goes well -- and we're quite optimistic it will -- we'll be extending that to other cities."

Marriott, along with the rest of the hotel industry, has been keeping an eye on the home rental market during the past few years. Some, including Choice Hotels International and Wyndham Worldwide, leveraged vacation rentals to gain a foothold, while others like Hyatt Hotels Corp. and AccorHotels have bought or bought into existing home rental providers. But Sorenson said players who entered the market early, i.e., Airbnb, did so illegally in some countries and cities. "It's one thing for a startup to engage in a business that really does not comply with law," he said. "It'd be another thing altogether for a 90-year-old company like Marriott to step into a business which is fundamentally illegal."

Sorenson said that in waiting to enter the space, Marriott has figured out how to begin renting homes in a way that complies with local laws and regulations and doesn't skirt local taxes like occupancy tax that hotels are required to pay.

Marriott, essentially, is entering this space after Airbnb has spent years battling local regulators to loosen or lift laws around home rentals and to secure the right to collect or remit occupancy taxes on behalf of Airbnb hosts. It's worth noting that Marriott, as a prominent member of the American Hotel & Lodging Association, also helped to make those battles more difficult for Airbnb.

Marriott's move into home rentals also comes after Airbnb announced plans this year to roll out category-driven portfolios and loyalty programs. Sorenson thinks Marriott can do branding better. "As some of these platforms have grown into millions and millions of units, there is almost a paralyzing array of choices," Sorenson said. "The lack of branding and the lack of attributes around quality and service of product makes this an area where we think we can bring our brands, we can bring our service and product focus, and deliver something that is simply a better product."