Airbnb Takes $1.9-Billion Bite Out of Hotels: 6 Fast Facts

February 13, 2017 Steve Symanovich

airbnb vs. hotels

Airbnb is taking a bigger bite out of the U.S. hotel business.

That’s according to CBRE, which tracks the San Francisco-based home-sharing company and its impact on the hotel industry. In a recent webinar, Jamie Lane, senior economist at CBRE Hotels’ Americas Research, dug into the numbers.

Here are six essential takeaways every hotel professional, meeting planner and business traveler should know.

1. Airbnb is growing fast

Airbnb listed 3.1 million property sites worldwide in 2016. In the U.S., the company’s short-term rental stock ballooned 70 percent, to 652,000 units from 383,000 in the previous year. Meanwhile, U.S. revenue rocketed 147 percent—to $6.8 billion from $2.7 billion during the same period.

2. Business travelers are buying in

Business travelers increasingly see Airbnb as an option for lodging. In 2017, 23 percent are expected to try Airbnb during a business trip, according to Morgan Stanley research. That compares with 12 percent in 2015.

3. New York, Oahu hit the hardest

CBRE measured Airbnb’s market impact by crunching the numbers using three measures:  Airbnb units vs. hotel rooms; Airbnb rates vs. hotel rates; and Airbnb’s growth in a market.

It found Airbnb has the greatest impact on the New York and Oahu hotel markets. Airbnb holds 21 percent of the nightly room supply in New York. And in New York and Oahu, its rental rates run at a 33 percent discount to a hotel room.

Rounding out the top 10 hardest-hit-cities list is Los Angeles at No. 3, followed by Miami, Oakland, Calif., San Francisco, Portland, Ore., Orlando, West Palm Beach and Seattle.

Airbnb nibbles at hotel RevPAR

In 2016, Airbnb shaved 0.9 percent off U.S. hotel  RevPAR—revenue per available room—based on Morgan Stanley research. That translates to $1.9 billion in lost business for hotels. It also represents about 4 percent of the U.S. hotel business—and roughly one-fifth of Airbnb’s revenue.

5. Hotels losing big-event boosts

Hotels typically get higher rates during big events, like the Super Bowl, but Airbnb is skimming that gravy. Take the SXSW Festival in Austin, Texas, for example. In 2013, hotels reaped a 27 percent boost on rates during the March extravaganza. In 2016, the Airbnb effect shrunk the premium to 17 percent.

6. Airbnb growth eases in key cities

Airbnb’s quest for global domination is not assured. In New York, San Francisco and Chicago, Airbnb has bowed to political pressure and instituted a one-host, one-home policy. The new regulations mean property managers cannot list multiple properties on the Airbnb website.

Airbnb is learning what hoteliers already know: You can’t fight City Hall.

The post Airbnb Takes $1.9-Billion Bite Out of Hotels: 6 Fast Facts appeared first on Smart Meetings.

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