New Research Measures Airbnb's Massive Industry Footprint

The world hasn't been the same since Airbnb launched in 2008 and quickly grew in popularity.

2 minute read

May 30, 2019, 2:00 PM PDT

By James Brasuell @CasualBrasuell

Luxury Hotel

Tupungato / Shutterstock

New research by Tarik Dogru and colleagues Airbnb’s impact on hotel performance in ten major U.S. cities, measuring effects in terms of room prices, hotel revenues, and occupancy rates. Dogru writes for CityLab to explain the new research.

According to Dogru, the "exponential rise" of Airbnb was made possible by increasing demand for "authentic" short-term rental experiences (i.e., in people's homes, not hotels) and a lack of regulations. 

While this is now changing as cities clamp down, this provided Airbnb with a significant competitive advantage against the hotel industry. Indeed, the typical regulatory framework in cities across America means it can take several years to add a new hotel to the market and requires permits, adherence to safety codes, and more tax collection.

According to the research, "these advantages translated into a significant impact on the hotel industry in terms of revenues, prices, and occupancy rates." In New York City alone, the hotel industry lost an estimated $365 million in 2016 alone, according to Dogru.

Also worth noting is Airbnb's effect in the high-end hotel market.

That suggests the company has successfully pushed to provide more unique experiences across the spectrum, and now there’s a large inventory of more “luxury” experiences on the platform where one can rent designer homes and unique accommodations like cabins, boats and even treehouses—all of which tend to be in the higher price range.

Dogru presents several more key findings from the research, and concludes with a warning that despite new regulatory changes, the hotel industry should expect Airbnb to be a powerful industry presence in the future.

Wednesday, May 29, 2019 in CityLab

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