Airbnb – How Will It Affect The Hotel And Meeting Industry?

Morgan Stanley recently published a survey of 4.000 people which has shown that 12% of leisure and business travellers have used Airbnb and this figure is increasing.

The estimate is that next year 18% leisure and 16% of business travellers will use the service and there is opportunity for further increase as both categories are 90%+ satisfied and only 41% of our survey sample was aware of Airbnb and 25% had tried it.

Price is the primary reason that people use Airbnb, however 66% of American Airbnb users earn more than $75,000 a year, contradicting the popular belief that the users are college students, millennials and individuals with lower incomes.

Less than half of Airbnb demand coming at the expense of traditional hotels: 

• 42% of Airbnb users are substituting traditional hotels
• 36% switch from bed & breakfasts
• 31% are using Airbnb rather than staying with friends and family
• 20% are using Airbnb rather than holiday rental
• 7% of Airbnb users stay 1 night (it is 25% for traditional hotels)

The report indicates that Airbnb is taking business from non-hotel, leisure, longer-duration stays, rather than corporate single-night stays due to safety and privacy concerns, amenities such as loyalty programs, business centres, restaurants etc.  Overall around 70% of hotels’ business is from corporate demand. Morgan Stanley’s survey shows that Airbnb leisure use is growing faster than corporate use and however, it could have negative impact on annual hotel occupancies and annual RevPAR growth.