Airbnb And The Hotel Industry

HVS Report - Airbnb's Inroads Into The Hotel Industry - By Matt Kurtz

Airbnb offers accommodations in nearly every major hospitality destination worldwide. Rates are often lower than comparable hotel rooms, and its popularity is rising - what does this mean for hotels?

HVS International Travelers looking for lodging in their destination cities have traditionally taken one of two courses: stay at the home of a friend or relative or book a room at a local hotel. Over the past six years, a kind of hybrid option has emerged, allowing for gues ts to book rooms in the houses, apartments, condominiums, trailers, treehouses, boats, and even castles of other people. The experience can have as much in common with couch surfing as with staying at a B&B or boutique hotel, but it is also quickly becoming more sophisticated, with some listings rivaling four- and five-star luxury hotel suites in destination cities. Tens of millions of travelers have opted for such accommodations, and the numbers are growing. 

Airbnb LogoAirbnb, an online community marketplace connecting lodgers with hosts, leads the hospitality charge among a growing contingent known in business circles as a “disruptive service”—that is, a platform that through its innovation disrupts the established way of doing business in a given industry. In the world of lodging, Airbnb has managed to increase the amount of available lodging supply without building a single structure or room. In the words of Sangeet Choudary, an expert in networked business models, “Airbnb enables anyone with a spare room and a mattress to run their own [bed and breakfast] and benefit from a global market of travelers.” 

Does Airbnb’s rise threaten the livelihood of the hotel industry? What can hoteliers learn from the service in terms of keeping demand satisfied and booking rooms at their hotels?

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