Hotels, Restaurants and Leisure

Marriott CEO explains why it took 10 years to enter vacation rentals dominated by Airbnb

Key Points
  • Marriott CEO Arne Sorenson says Airbnb's rentals are a different kind of experience than the hotel group's new vacation rental offerings.
  • Marriott's vacation rental pilot program comes nearly a decade after the online home rental marketplace Airbnb was founded.
  • Sorenson says it look awhile for Marriott to become comfortable with the laws and regulations around the practice.
Marriott CEO on new home sharing program
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Marriott CEO on new home sharing program

The need for a different kind of experience is what prompted Marriott International to enter the vacation rental market dominated by Airbnb, CEO Arne Sorenson told CNBC on Monday.

Formulated with groups in mind, Marriott announced a six-month pilot program in April, in partnership with London-based home rental management company Hostmaker, which does still work with other services, including Airbnb and Home Away.

"Increasingly, people are looking for places that groups can stay," Sorenson told CNBC's Seema Mody on "Squawk on the Street." "Think about a family group, or think about a college reunion, or a bridesmaid weekend, whatever it is."

Airbnb, founded in 2008, is a popular website and app that allows users to reserve short-term lodging in private residences.

Addressing why it took Marriott 10 years to get into the vacation rental business, Sorenson said it look awhile for Marriott to become comfortable with the laws and regulations around the practice.

Laws vary city by city, with some localities prohibiting people from hosting paying guests in their homes for short-term stays.

Sorenson also said Airbnb's initial model didn't work for Marriott. "Airbnb's first generation of home sharing was really about an extra bedroom, or a sofa, in somebody's house," he said. "That's not the kind of experience that we necessarily want to deliver."

The Marriott vacation rental website platform, Tribute Portfolio Homes, allows users to select from 200 different homes being offered by residents in the London area.

Marriott has ended up with "something that is curated, which has service attributes to it, which has got design function to it, has got key delivery," Sorenson said. "So you end up with something curated with services more like a hotel platform."

Airbnb was not immediately available to respond to CNBC's request for comment on Marriott's new offering.