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How Marriott is declaring war on Airbnb

Brian Sozzi
Editor-at-Large

Marriott (MAR) is taking aim at Airbnb’s enviable position in the lodging rental space, and doing it with a completely different model.

The iconic hotel chain that boasts 1.3 million hotel rooms spanning 30 brands, is fresh off a late spring launch of Homes & Villas by Marriott International. Initially tested last year in four European markets, Homes & Villas by Marriott International has since expanded to 2,000 premium and luxury rental homes found in 100 locations in the U.S., Europe, the Caribbean and Latin America.

Yes you read that right, entire luxury homes could be rented — unlike a typical room on the cheap at someone’s apartment per Airbnb. For urban areas, Marriott will rent you a high-end flat.

The competitive advantage here for a Marriott: It has integrated the home rental service into its enormous, well-liked rewards program. So, you can accrue valuable rewards points by renting a luxury home and then apply them to staying at Marriott or Starwood locations.

Marriott President and CEO Arne Sorenson told Yahoo Finance he has big plans for the lodging rental space. While he declined to reveal those specific plans to Yahoo Finance, they sounded serious enough to worry a hard-charging upstart like Airbnb.

“We think this could be a place where we can be quite competitive,” Sorenson said, adding that Marriott will not be focused on offering low cost stays such as Airbnb or HomeAway. Instead, think family-focused effort here by Marriott. “We think this space is wide open for us.”

Sorenson said the business will not have an impact on Marriott’s financials this year.

But if Marriott ramps up the initiative — as Sorenson suggests will happen — the financial potential could be enormous. Just look at the privately held Airbnb, which is now pulling in billions a year in sales and is reportedly profitable. Airbnb has more than 150 million users covering 65,000 cities, according to some estimates.

Brian Sozzi is an editor-at-large and co-host of ‘The First Trade’ at Yahoo Finance. Follow him on Twitter @BrianSozzi

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