Tuesday, June 24, 2014

Trending Tuesday: The Airbnb Threat

The internet has opened up a world of sharing. It began with early social media outlets like MySpace and Friendster, was taken to the next level with Facebook and Twitter, and then it exploded with hundreds of other online platforms and mobile apps that let us share everything. The "sharing economy" was born, and soon it became more than just sharing photos, your status or your location: the internet made it easier to share your material items, including your car and your home.

Enter Airbnb, the Silicon Valley startup that allows people to list their spare rooms or their entire homes for leases online. More often than not, these rentals allow travelers to book a room or house for far less than what hotels, and even hostels, price them at. It's also a nice perk for homeowners who can earn a little extra cash from renting out rooms.

So, how big of a threat does Airbnb, and other websites similar to it, have on the hotel industry? According to reports, particularly one from hotel consulting company HVS, hotel executives aren't all that concerned...but maybe they should be. The common belief about Airbnb properties is that they aren't the highest quality, they are inconsistent and they don't have all the amenities that a hotel offers.

Airbnb listing for New York City/ Airbnb
However, if you delve a little deeper and do some legit comparing, it's easy to argue that. Many Airbnb listings offer large spaces, clean living conditions and a variety of perks for the same price or less than hotels touting standard room sizes. When I searched for listings in New York City over Labor Day weekend, I found a duplex loft in the Flatiron District of New York (complete with kitchen, bathroom, Wi-Fi and TV) for $225 per night for two people. Compare that to a 650-square-foot executive suite at a nearby hotel that ranges from $220-$350 per night. Which one would you choose? If the price is basically the same, I'd go with the apartment, and I think many others would agree.

It's not just the cost or size that should be a cause for concern for hotels. People are looking for a true local experience, and Airbnb offers just that. Hotels have made great efforts to add local flair to their properties, customizing each one to fit in the city it is located. But it's just not the same, there's still a sense of detachment from the city, still a feel of being a tourist. Travelers are interested in experiential trips and want to be immersed in a city's culture. Hotels can offer that to a certain extent, but renting out properties encourages people to explore the area on their own, rather than stick with what a hotel concierge suggests.

Bottom line, Airbnb and other alternative accommodations have a certain je ne sais quoi quality about them that's very appealing to travelers these days. According to the HVS study, hotels need to have "awareness of the increasing quality, availability, and economy of lodging options offered through Airbnb." This industry isn't slowing down, and its market share will continue to grow as more people seek out unique travel experiences.

Thanks to Skift.com for featuring the HVS study on their website!


  1. My info is that the Hotel Industry is totally and utterly freaked out by Airbnb. They are also fighting a rear guard action to try to tarnish Airbnb's image. There are many examples of this. Still, Airbnb is now worth $10B, more than either the Marriott and Hilton chains, formerly #1 and #2 in the industry. All without owning a single property or an inch of dirt, outside of their spectacular HQ in SF. The Hotel Industry as well as the real estate industry have fouled their gold lined nests and are now crying victim and foul. Without a clue how Airbnb's social design works.

    1. Thanks for sharing, and I agree that hotels definitely need to be concerned. Airbnb has established a solid business model and hospitality platform, so it makes sense that they're net worth is growing.

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