Will Airbnb over take traditional hotel industry by 2018?

Published on : Friday, January 6, 2017

airbnb-lgoA new report from Morgan Stanley Research suggests that Airbnb is possibly the biggest threat to the hotel industry although earlier the hoteliers said that they are not.



The report, called “Who Will Airbnb Hurt More — Hotels or OTAs – showed that the greater threat is to the hotels than the online travel agencies (OTAs).



Brian Nowak, executive director of Morgan Stanley Research, wrote in the report “Our AlphaWise survey shows rising Airbnb adoption (now approximately 18 percent of travellers) with demand increasingly coming from hotels.” He continued saying that Airbnb has been almost double the threat to hotels in 2016 than previously believed, and the threat is growing.



From the data collected in the last two years, a significant increase in the number of travellers using Airbnb has been used. In 2015, only 15 percent of leisure travellers surveyed had used Airbnb in the last 12 months, while in 2016, that number rose to 19 percent.



More than 49% of them replaced a traditional hotel stay with an Airbnb stay in 2016 which was about 41% in 2015. As per the research, by 2018, the overall lodging occupancy in the U.S. and Europe will fall to 66.8 percent from 67.6 percent in 2016. In fact, in 2016, the hotel industry saw its second lowest level of nightly rate growth.



The trend of using Airbnb has seen a swell amongst the leisure travellers as well. In addition, about 70 percent of room nights in the U.S. lodging industry are generated by business travel. Airbnb occupies about 4 percent of traditional hotel demand in the present scenario. The demand could rise as much up to 245 million room nights in 2018 for Airbnb.


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