Is Airbnb a threat to hoteliers?

Has Airbnb eaten into the business travel market?

18 June 2019
In 2014 we discussed a report published by the PWC, it found that ‘sharing economy’ businesses, more specifically, would have the potential to steal significant levels of market value and drive down hotel needs drastically within a short time frame., 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, had already served 6 million travellers in finding alternative accommodation in 2014 alone.

While the company’s CEO, Brian Chesky, has publicly stated Airbnb was not founded as a disrupting company,  its seemed 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 was reported to increase to 15% for budget hotels and 4% for luxury.

Moreover, Airbnb at the time was unintentionally shifting into business travel, with even more companies letting staff book their own accommodation while giving them incentives to be ‘thrifty’ and now new figures from Airbnb state that more than 500,000+ companies around the globe use them for their business travel.

With 2020 just around the corner what does the picture look like, how much of the business travel market has Airbnb been able to take and is it really a threat or just another option.

Since 2014 Airbnb have kept adding more features to its offering showing an increased pursuit of business travel and over this time have, as predicted, increased their business travel reservations to 15% of their overall bookings.

Airbnb for business trips is appealing, especially for companies that want to cut their bottom line. On average the saving in some major cities can be as high as 30% (AirDNA) However, cost should never be the only factor when considering what accommodation to use. Savings made on an Airbnb booking may jeopardise the companies negotiated hotel program by diluting the amount of nights used, making it difficult to obtain these preferential rates in the future.

Other areas to consider are safety and traveller peace of mind, Airbnb have endorsed many safety and security procedures to build client confidence, however the traveller is still putting their trust in a stranger’s property and hoping their choice is a safe one. Something that must be on all travel managers radars when assessing well-being and duty of care, extra stresses are not beneficial when preparing for that all-important client meeting.

It looks like Airbnb have enough benefits to keep increasing its share in the market, but are they the major disruptor hoteliers fear? For now, it looks like they may be just another choice.


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