Airbnb’s Success Threatens U.S. Hotel Businesses in Major Metropolitan Areas

hotel

Have you ever used Airbnb? The crowd-sourced that allows people to easily rent a place to stay from a stranger has become an incredibly popular option for today’s travelers, especially young people. It is now that U.S. hotel businesses are realizing the threat that Airbnb poses in large metropolitan areas of the U.S. market.

All said and done, 2015 was a banner year for the U.S. hotel industry. The industry at large saw improvement in three key areas: room occupancy, average daily rates, and revenue per available room!

Here are some numbers to make sense of the stranglehold Airbnb has on large metro areas: the top 10 markets in the country make up 13% of bookings for traditional hotels, but that number jumps to 40% when measuring those same bookings for Airbnb.

The top areas for Airbnb (as the compete with hotels) include Los Angeles, New York, San Francisco, Miami, Philadelphia, and Seattle.

However, in major metropolitan areas, Airbnb thrives and unquestionably dominates the conventional hotel industry with its specialty and flexibility.

Given the structure of Airbnb, it seems unlikely that the service would be able to thrive in all parts of the country (country areas don’t tend to have a lot of couches to surf on, or even homes that are vacant often) which means that regular-type hotels are definitely here to stay.

In cities, though, there is s still a major brawl to be had. Or is there?

This honestly remains to be seen. Despite Airbnb’s growing success and the obvious overlap in services offered by Airbnb and hotels, both sides are shying away from any fight. In fact, they view each other as complementary. Airbnb CEO Brian Chesky avoids using the term “disruption”, and many hotel industry experts recognize that their core base of customers aren’t the same people that frequent Airbnb anyways.

At the end of the day, this town might be big enough for the two of these competitors. And the travelers rejoiced!

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About DevonJ140
I am currently an Accounting Director living in New York City. I love reading and learning more about business, finance, tech, and current events.

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