Is Airbnb a threat to hotels?

Is Airbnb eating into market share from hotels?


8 October 2014
A report published by the PWC has found that ‘sharing economy’ businesses, more specifically Airbnb.com, have the potential to steal significant levels of market value and drive down hotel needs drastically within a short time frame.

Airbnb.com, which offers home-owners an online platform where they can rent their rooms to travellers wanting non-hotel alternatives, already operates in a staggering 33,000 cities in 192 countries. The privately owned company, founded in 2008, has already served 6 million travellers in finding alternative accommodation in 2014 alone.

While the companies CEO, Brian Chesky, has publicly stated Airbnb was not founded as a disrupting company,  its seems likely that Airbnb will become exactly that, with estimates of the business cutting into sales of budget hotels by 5% in 2016. If current growth rates continue, by 2020 this rate increases to 15% for budget hotels and 4% for luxury.

Moreover, Airbnb seems to be unintentionally shifting into business travel. Even more companies are letting staff book their own accommodation while giving them incentives to be ‘thrifty’.

The sharing economy model, one of the few positives to come as a result of the recent recession, has already been under the business disruption spotlight. Zopa.com, a peer-to-peer (person to person) loan company which is already competing with traditional bank and ‘Wonga style’ loans, is similarly set to increase in use and popularity.

Without any response or a conscious sales push in light of Airbnb and other similar businesses, hoteliers may find themselves with a surprisingly unignorable and possibly superior competitor in the very near future.
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