So both hotels and AirBnb are growing, but that doesn't mean AirBnb isn't taking a large share of the profits. I used to go to hotels when travelling, but in the last few years it has been only AirBnb. I am much more satisfied with the quality of service and being closer to the local culture.
This is a terribly uncompelling attempt at analysis and I can only assume that they began by writing the headline and then went and looked at the data.
I think hotels are loosing money because sites like booking.com charge insane fees (35% is not uncommon [1]) and the hotels don't have their own mega portal.
Some of which will give you better ranking on their site if you pony up more percentage.
If you are looking to book a hotel I would find what the price is on one of these sites and then call the hotel to negotiate a lower price. You get a better price and the hotel gets more money.
Anecdotally, I never do this anymore since a hotel manager bumped me in a double booking, in favour of someone from a portal. He explicitly told me: "yes, but they can leave a bad review."
booking.com is one of the worst things currently for owners - they are ridiculously backwardish, all processes takes weeks/months instead of hours like with airbnb, super expensive and on top of that, they don't even facilitate payments - so you either ask people to bring a lot of cash, or somehow obtain credit card reader (and go through all the hassle that comes with it, which I won't).
to sum it up, I do believe and hope booking.com will slowly die, since other services are just better in every single aspect.
See, I normally prefer booking.com to Airbnb in Europe because airbnb is full of crappy apartments whereas booking.com tends to mostly list professional Bnb's where you get breakfast etc, less hassle with keys, someone on site. YMMV.
Maybe I'm just blind because I have a good income and can afford it, but I much prefer the experience of bnb's and hotels. Airbnb is fine if you're with a group and partying, but is a sub par way to stay in a city imo. Also, in Paris, e.g., the airbnbs tend to be booked out way in advance and often much more expensive than hotels.
OK then we have different experiences, but from different positions and places too.
My comment was from the point of host (sorry if not clarified before) - dealing with booking.com is ridiculous, their charges are way above any other service, yet you have to do the payment yourself for example (major hassle).
If hosts have to pay up to 30% booking fee for sub-par services (just because, you know, we are booking.com, so f__k you), guess who ends up paying for it? Not the owners, that's for sure...
I agree that airbnb may end up being more pain in some places, if hosts are too restrictive (ie requiring passport scans, 24h pre-approvals etc.) - but this is optional, non-default setup that they chose for whatever reason. I don't do this for my place, instant booking without prejudice :)
If it is on AirBnb you at least know it'll be easy.
Meaning: no need to have a local number, usually have a reception to avoid needing to agree on an exact time beforehand, hosts are actually on time (I hate when I agree on a time and there's nobody around), hosts are actually reachable, etc.
I don't find AirBnb cheaper or anything, you still pay a pretty big service fee. It's just less hidden.
As an end-user, booking.com gives me so much added value I don't mind paying 10% more than I could maybe, possibly negotiate with the hotel on the phone. When I hear hotels complaining about booking.com fees, I believe they're ignorant of the end-user's plight. They're also free to not be listed on booking.com, but obviously the discovery is worth it to them.
Off the top of my head, a short list of advantages I like:
- someone that will take my side in disputes
- being able to book multiple hotels on one account, in the same place
- cards in wallet in my iphone
- knowing exactly what I'll get
- avoiding misunderstandings that might arise when having to book orally (i.e. wrong number of rooms, wrong number of people, ...)
And that's beyond the superpowerful search, which is kind of immoral to use without giving them the referral fee.
Booking.com has started taking Airbnb like listings for which there was no indication on booking.com that I noticed.
I recently booked a room in stockholm that looked nice on booking.com. It was only after I booked that I was contacted by the owner and told how to meet up and get the key etc . I was pretty upset it wasn't an actual hotel but it was arguably too late to change things. It turned out to just be someone's apartment.
I have no idea if booking.com knew that. I do know I would not have booked if I had know for this particular trip.
Ah right, I had one bad experience. If on booking.com, I expect an apartment to be an apartment building (meaning: loads of apartments and a reception). It seems difficult to see the difference on booking.com. I booked an apartment where it was really like an Airbnb. Meaning: call this local number. Fortunately they had whatsapp as well. This in Europe, were finally I can call to my own country from elsewhere in Europe, but calling to the local country is still crazy expensive (special rate for mobile phones -- which small companies often use).
Unlike Airbnb the apartment did want me to pay the tourist tax. Strangely, I paid a bit less than what booking.com said I should've. I mentioned it but the guy ignored it (oh well).
Usually I do check around (see if I can find a cheaper rate by booking directly).
I don't think it was booking.com, but I had something similar happen to me in Japan. My wife picked out a nice-looking hotel on one of those aggregate sites, and I went to one of the sites that had the listing for it. I even double-checked the address to be sure.
After booking, my wife noted that the email they sent referenced an apartment instead of the hotel. Sure enough, it was different... It was across the street!
I got instructions to go to the other side of Akihabara, up a few floors, and get a key from some office there.
In the end, we chose to pay for the first day of the "hotel room" and cancel the booking, going to a real hotel instead.
Accommodations for one city was on Airbnn(zealously over-finished apartment but nice), one city was on booking.com.
Turns out booking.com accommodations were just an unsold apartment in a half sold building being used as a half hotel in the middle of an unfinished development.
It was a hotel like experience (hotel tax included) but I would have been upset to actually buy an apartment in this building.
I think it's pretty clearly specified which ones are apartments. I travel very frequently and have had various bad experiences with AirBnB. Nowadays I almost always book an apartment via booking.com. It's nice to have an actual customer service who takes care of issues, not always having to pay absurd cancellation fees, not having to wait for approval, and hosts not cancelling at the last moment.
[Disclaimer I work for an hotel chain]
- Booking transmit your credit card number and CVV unencrypted to the hotel. I don't understand how could anyone use this site.
Probably not much less secure than calling and giving your CC to a person jotting it down or emailing with the same details. Most of the hotel custom booking forms look like '90s HTML3 pages so the alternative is usually not better anyway.
It's unfair to compare Booking.com which is the largest adwords buyer in the world to small indie hotels.
Let's contrast this with Expedia which have a single use virtual card for each customer.
Why can't Booking do the same ?
AirBnB's marketshare is coming out of someone. Travel habits are changing and it may take awhile for them to be observed clearly.
I clearly remember the newspaper industry doing a survey in the late nineties showing that the Internet wasn't materially hurting their business. Then sometime after 2003 the industry fell off a cliff.
To be fair, it's not like the holiday home-rental market didn't exist before Abnb. My family spent 15 years using that market - you only needed another family to share a house or large flat, to make it extremely cheap compared to hotels. My guess is that Abnb has killed the advertising industry in that segment (some of which was/is state-funded in many Euro countries).
People also travel a lot more these days thanks to cheap flights (which have just gone through years of low fuel prices) and higher disposable income, so the holiday market as a whole is expanding.
It's possible more people are traveling than before, or using airbnb/vrbo/others vs cash transactions, or that providing more capacity, especially at high demand times, brings more supply online at peak times.
I've said this for years, but the simple fact is you can't build a unicorn business by taking market share from other businesses. You have to grow the market. AirBNB have done this by lowering the cost of staying somewhere, and offering something different to traditional accommodation, to the point where lots of new people have started entering the market and people who were already occasional travellers have started travelling more. Their marketshare isn't coming from other businesses, it's that the market is $billions of dollars bigger.
That's blatantly false. Companies like Uber, Lyft and Didi are dramatically harming the taxi business all over the world. They wouldn't have to expand that industry one dollar to be unicorns. Those new businesses are unicorn businesses built primarily - but not exclusively - by taking market share from taxis and similar services. When Uber first hit $1 billion in valuation, it wasn't expanding the market for taxi services, it was acting as a superior option for early adopters and stealing customers from taxi and black car services. Uber has decimated (prices are down 75%+ in a few years) the medallion market in NYC as one very loud example of the destruction it's causing to the taxi industry there as it takes market share. If it was primarily market expansion that Uber was using to create value, the taxi industry wouldn't be collapsing across the US.
Netflix used to be a unicorn at one time. It didn't primarily expand the rental market to become a unicorn, it rather rapidly destroyed Blockbuster and thousands of other rental stores by providing a better service. If it was primarily expanding that market, Blockbuster would still be around. Today it's not expanding total TV viewing time, it's proceeding to harm cable, tv networks, traditional tv programming, ESPN, HBO, etc etc.
Tesla - also once a unicorn - isn't expanding the automobile market. They've been directly taking sales from BMW, Mercedes, Porsche, Lexus, Audi, etc. The success of the S sedan is coming out of the high end luxury car sales segment. Their 3 sedan will continue that process. That's why those other companies are so freaked out by Tesla's arrival and relative success. If Tesla were primarily expanding the market and not stealing market share, the competition wouldn't be reacting the way they are.
I can buy the argument that services like AirBnB and Uber are growing the market instead of soley stealing customers from other companies. I've only used Uber twice, but in both cases, my alternative was asking a friend for a ride (even though taxis were available). The low price of a Uber ride didn't entice me away from taking a traditional taxi, but instead it was low enough that I'd rather just pay it instead of asking someone else to go out of their way.
So much THIS.. while anecdotal, i've started paying for rides much more since Uber entered the market where i would probably have used public transportation if Uber wan't available. I'm not saying that Uber isn't hurting the Taxi business but they are surely also growing the market
I searched the internet for "taxis in France" and generally get the impression that "Rates in Paris are different from the rest of France. ... There are four main tariffs for taxis outside Paris."[1]
This[2] article claims a "nationwide protest against Uber", which would seem odd for, as you would have us believe, a nation without taxis.
In huge portions of the US, taxis are considered a weird/shitty thing that most people wouldn't use. This applies to most places that are not major metro areas in my experience.
Uber et al may be harming the taxi business, but my friends and I only took taxis if we had to in our town because they were hard to find, and generally sucked. Now we Uber to go out because it is so convenient. Another friends car broke down and he just never replaced it. He didn't drive that much anyway, and Uber satisfied his need for a car. He would have never done that with the traditional, unreliable taxi in my town.
Uber has definitely expanded the number of people who take a driver service. I wonder if anyone has done any statistical studies around DUIs and Uber coming into a town.
I think adventured was responding to your statement "the simple fact is you can't build a unicorn business by taking market share from other businesses" when he said it was blatantly false, NOT that it's not also possible to expand the market. And I think there are plenty of examples of businesses that did become huge by decimating existing players that there is enough data to say you can become a unicorn just by stealing market share.
In AirBnB's case, the only way it can really grow the market is by providing an efficiency that didn't exist before, and in that respect it clearly has: apartments, houses or spare rooms that used to sit empty when the owner was away can now be put to use through AirBnB. That said, I think it's naive to look at AirBnB's cherry picked data and not think they are having some marketshare impact on hotels, especially on the budget side where AirBnB is clearly a substitute good (think Motel 6 vs AirBnb).
but in any case I am genuinely curious. I can see the conflict of getting data only from AirBnB.
But perhaps prices simply reached an equilibrium. For example, there was a time when I could count on AirBnB being MUCH cheaper than hotels. Now they are about the same in most areas I look in. I can also see some hotels having less variance in their prices during certain time periods.
Do you have a source for the claim that Tesla isn't expanding the high end car market? I thought a significant fraction of Tesla purchases were folks who normally buy non-luxury cars. Not all, of course.
In Portugal, it seems to be coming from the rental market. In the sense that there's been an increase in tourism and the increased demand for short-term accommodation is being fulfilled with properties which were previously for longer rentals.
> In Portugal, it seems to be coming from the rental market. In the sense that there's been an increase in tourism and the increased demand for short-term accommodation is being fulfilled with properties which were previously for longer rentals.
This has happened in Ireland, and especially Dublin as well. With rents increasing by 10% per year, AirBnB is blamed by some for reducing the stock of privately rented accomodation.
AirBnB has not existed for an exceptionally long time, and during their existence we have seen a lot of economic downturn. Is it possible that people are just starting to travel again?
However, stagnant growth on the part of AirBnb seems like it would have been widely reported. And yet it hasn't. Googling we find a seemingly contradictory datapoint: Airbnb's revenue is up 89% this year (http://www.bizjournals.com/sanfrancisco/news/2016/09/01/airb...).
How can Airbnb's revenue have almost doubled while still losing market share across the board?
Option 1. They didn't lose market share across the board, and instead cherry picked non-representative markets for their 13 region hotel comparison.
Option 2. They lost large numbers of low-margin bookings across the board, while gaining (taking market share from hotels) higher margin bookings. [Note this would contradict OP's article.]
Except I'm on one of the biggest touristic area in France, and hotels here a loosing customers. We got less tourists than before, and I can see many people using RBNB. In the mean time, some people close to me are talking about being fired from their hotel because of the economy.
While I know my situation is not a representative sample, I do travel a lot and observed the same thing in various places, including other countries. I discussed it with other travelers, and they reported the same.
So I wouldn't conclude that everything is ok for hotels. The story needs more data.
US tourist travel to much of Europe was down this summer [1] with the drop attributed to the terrorist attacks. Anecdotally, tourist travel in areas of the Northeast US was up considerably (double digits) this summer. I'm sure there are a number of reasons for this--low gas prices but not especially cheap airfares, the general air travel experience, etc.--but reluctance to visit Europe (in spite of a strong dollar) does seem to be real based on conversations with a number of restaurant owners for example.
Good point. We'll see how it shakes out when they aren't having record years.
Hotels typically have about a 5 year cycle.
Families can get a more memorable experience and usually a more economical one with a home rental. My property has even been getting small corporate retreats.
There's a lot of people that have never tried the hospitality sharing economy. Only 6% have [1]. It's kind of intimidating and unknown the first time but once you do it you realize it's pretty awesome.
Also - hotels will be hurting when businesses adopt home share credit card rewards. You'll see a shift from business travelers. Many have Marriott rewards cards as an example like they used to have Blackberries. They'll demand a more flexible option which will be a game changer.
We'll see. I'm a frequent business traveler who often prefers smaller and more local when I travel on vacation and, indeed, will often favor "boutique hotels" when I'm on business; I keep an eye on hotel rewards but aren't a slave to them. But, when traveling on business, I really do want a predictable experience, 24 hour desk, etc. I'm not looking for travel experiences from the hotel perspective at all.
Yeah predictability is a definite concern. However, many AirBnBs are more convenient in many ways.
My place is accessed by touchscreen code and I let visitors check in whenever they want and usually let them check out late at no charge if requested. 50M internet. Killer kitchen, tons of work space, grill, new hot tub.
AirBnB is pushing more hosts toward instant book which will make it easier for business travel. They also prioritize hosts that respond quickly because booking has to be easy to convert, especially for last minute bookings and biz travel.
It may not be for you, but many on business don't necessarily look for an experience - they just want amenities and features they have at home. Younger people are generally more excited about AirBnB too so that will drive more growth and adoption as they become the traveling warriors.
AirBnB and others need not take huge market share from hotels that cater to business travelers to cause them to hurt. Expenses are on the rise for hotels and changes in the minimum wage and labor laws will have a big impact too. The industry pays very little and demands a lot from their employees.
That sounds great. And I definitely would be more than happy to latch onto a repeat experience that was like that. It's just that as a business traveler I'm just not that open to experimenting to finding the exceptional.
I'm not even necessarily a particularly representative business traveler. I like my points but I don't organize trips around them. I don't need or use a lot of traditional hotel amenities like fitness centers. I don't need concierges. I just don't want complications when my plane is delayed 5 hours that involve calling some guy to coordinate getting a key.
> How can Airbnb's revenue have almost doubled while still losing market share across the board?
Trivial: Because the market size increases. More people are renting hotels/airbnb + more often + for longer durations.
For starters, I believe that comparisons shouldn't oppose AirBnb and Hotels because they don't appeal to the same demographics (though there is some overlap).
> Trivial: Because the market size increases. More people are renting hotels/airbnb + more often + for longer durations.
Lol, yes, this is fair. The hotel market doubling in revenue would be headline news at the WSJ, etc though.
We can actually get a rough sense of what's happened to the market as a whole by looking at the stock prices and cashflows of the major hotel chains. Looks like Mariott has lost a bit of value in the last year[1], same for Hilton[2]. La Quinta holdings went way down[3]. Please check the hotel chain of your choice if you feel I cherry picked these examples (Motel 6 and Best Western were my first choices, but are privately held).
Which is to say it doesn't appear that the market doubled in size.
The parent comment is taking about "the market for people staying places when they travel", and you're giving numbers for "the market for people staying in hotels". Those two things were almost equivalent for a long time, but are now detached, and AirBnB occupies that gap.
But that's exactly the point. Only way for AirBnB to grow would be that gap that AirBnB is occupying to grow. This could be created by an increase in "the market for people staying places when they travel", or a shrinking of the market for "the market for people staying in hotels". That 100% of the growth is coming from the former is very suspect.
And it's easier for me to believe that the market for, say, app-summoned cars is more elastic than the market for renting a room while traveling.
In the former case, you're competing with a bunch of alternatives that you're happy to substitute given a better/cheaper option. Maybe you take less public transportation or don't ask for a ride or don't drive yourself and use Uber.
AirBnB, on the other hand... Yes, some people will travel more/stay longer given cheaper lodgings but there are a lot of other costs associated with travel (including, for most, vacation time) so it's harder for me to believe that AirBnB will dramatically increase lodging days to the same degree that Uber could potentially increase taxi or private car-like service miles.
You would be surprised. I've personally increased lodging days a lot due to AirBnB being cheaper (and subjectively better) than hotels.
Also, AirBnB doesn't only compete with hotels... a lot of the market share in my country (Uruguay) was actually taken from real estate agencies for short-term vacation rentals, not hotels.
>Also, AirBnB doesn't only compete with hotels... a lot of the market share in my country (Uruguay) was actually taken from real estate agencies for short-term vacation rentals, not hotels.
That's not market elasticity though. That's shifting from one booking agency to another. When my family rented a vacation home we used various small vacation home services. I have no doubt we'd consider using AirBnB today if we still had the place.
I don't doubt that lower prices, where they exist, make a difference at the margins. I'm just skeptical that the effect is big. And, as the business traveler that I am most of the time, I mostly want predictability and a 24-hour desk from a hotel.
The US hotel industry had about $200 billion in revenues in 2015. Airbnb processed about $200 million in payments, or 0.1% of the hotel industry's revenue. At that scale, doubling or tripling your revenue doesn't even appear as noise to the hotel industry.
Stop looking at hotels chains. This is just wrong.
First, huge hotel chains are an American thing, the rest of the world (Europe in particular) is managed by many smaller players for which you cannot have numbers.
Second, the American chains are a fairly stable and fixed business limited by physical buildings, AirBnb is worldwide and extending to 100 countries as we speak. The current hotels vs airbnb state in America is already determined BUT only valid for America. What will be the market shares per country and cities... this has yet to be determined. Meanwhile AirBnB starting from 0% everywhere else is enough to justify growing income and revenues.
Third, there could be 10 (or 100?) times money stuck in the black market. (People who pay hand-to-hand, rent to a friend of a friend, gumtree, newspapers listings and the likes). AirBnb can tap into this black market and make it emerge, whereas this space is irrelevant for hotels.
You wanna talk business. Please compare numbers from hotels.com and booking.com and airbnb.com
I wanted to talk "market size increases" in response to your comment. If you're now postulating that a market size increase occurred w/o effecting the chains, I find that even more implausible, but am not sure what to say.
As I said before. These chains only capture a specific market: the intersection of people who live in America AND people who use hotels chains AND people who can afford hotels chain.
That's a multi billion dollars audience yet only a small fraction of the global housing and rental markets.
AirBnb is playing in many more markets than just competing with hotels.
If Airbnb is 10% of the market and increases revenue by 89% whilst all others stay flat, that only requires an 8.9% increase in the market.
Of course, if that happens, others would be losing "share", albeit not shrinking in absolute terms. But, in fairness, the article seems very wishy washy in its definition of "market share".
If total revenues for the whole market are 100, and AirBnB's share is 1. Then the total revenues only have to go up to 102, for AirBnB to capture all the new revenue and thus double its revenue.
The marketshare isn't based on revenue, but total supply of rooms/listings available, so its possible to lose marketshare and gain revenue.
>However, stagnant growth on the part of AirBnb seems like it would have been widely reported.
By whom? I agree it would be big news (and people love negativity) but it's a private company with powerful insiders and investors, and they control the narrative.
Bad analysis. Nowadays, my bookings are 50/50 split between regular hotels and apartment rentals. I would have stayed in hotels 100% if there was no alternative.
So I've a bunch of friends than when traveling used to go to Hotels and now go to AirBnb. While anecdotical, this is more convincing than data from AirBnb cherry picked to show a seemingly hard to make point.
I've seen this as well. Alot of my friends are using Airbnb vs hotels. I've seen two reasons. One is solely fiscal the cost savings. The other is being treated more like a local. By that I mean hotels I usually hear of locations that feel touristy. While hosts direct to local venues.
I'm a fringe point, Ive always preferred saving money for experience. So I'm used to hostels, couch surfing, etc. I would only touch hotels if it was part of a rewards program.
I'm also a host. My rooms are priced at 12 and 25 a night. I've noticed two trends and seen it backed up via host forums.
Firstly travelers are expecting hotel quality at a fraction of the price. They're expecting travel toiletries, clean to the point of shining. I purchased a number of travel size soaps and one customer raided my entire supply. This stuff adds up. I can buy some items in bulk. But not at the discount rate of hotels. I also offer food when I'm making it. Some customers outright asked me where's breakfast. Oddly ive seen this primarily with younger people. Older, 40+, join the household. Cook with us and buy ingredients.
Secondly I'm seeing Airbnb as a short term rental place. After 2 weeks listed I had one room booked for 6 months the other for 4 months. These are largely people who are just moving to the area, and finding their grounding. Or I've seen a lot of visas doing short term contracts.
I can pretty much boil my listing down too. Either a short term rental. Or a stopping point between Philadelphia and Baltimore/DC.
> Some customers outright asked me where's breakfast. Oddly ive seen this primarily with younger people.
I'll blame that on the AirBnB name itself. BnB implies Bed and Breakfast, so people might rightly expect that breakfast would be served.
I think it'd be better if both sides---consumer/suppliers---looked at AirBnB offerings as a bed and breakfast or a vacation rental, but never as a straight up hotel or couchsurfing replacement.
Simple common sense pretty much negates this headline and its premise.
To be honest, I can't say that I have a compelling interest in protecting hotel market share. As a resident of NYC, however, I do have an interest in protecting my relatively cheap (but in-the-real-world-expensive-as-hell) rent. I see more and more people with suitcases leaving and entering buildings in the neighborhood, and I have to wonder what that is doing to rent prices.
It's still a gut thing right now, but the case feels like it's getting more compelling.
I was a big believer in Airbnb but I've had some really bad experiences. The refund policy favors host over guest. The prices are usually on par or higher than hotels. Service can be really bad. It feels after growing airbnb lost its ethos.
In the Innovator's Dilemma framework, entrant firms typically attack the bottom of the market first and will not steal business from the likes of Marriot or Hilton until later in the game, where their services improve to the point of "good enough" for the existing hotel consumers.
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[ 12.8 ms ] story [ 147 ms ] threadSome of which will give you better ranking on their site if you pony up more percentage.
If you are looking to book a hotel I would find what the price is on one of these sites and then call the hotel to negotiate a lower price. You get a better price and the hotel gets more money.
[1] https://www.quora.com/How-much-commission-is-booking-com-cha...
Lesson learned.
to sum it up, I do believe and hope booking.com will slowly die, since other services are just better in every single aspect.
Maybe I'm just blind because I have a good income and can afford it, but I much prefer the experience of bnb's and hotels. Airbnb is fine if you're with a group and partying, but is a sub par way to stay in a city imo. Also, in Paris, e.g., the airbnbs tend to be booked out way in advance and often much more expensive than hotels.
My comment was from the point of host (sorry if not clarified before) - dealing with booking.com is ridiculous, their charges are way above any other service, yet you have to do the payment yourself for example (major hassle).
If hosts have to pay up to 30% booking fee for sub-par services (just because, you know, we are booking.com, so f__k you), guess who ends up paying for it? Not the owners, that's for sure...
I agree that airbnb may end up being more pain in some places, if hosts are too restrictive (ie requiring passport scans, 24h pre-approvals etc.) - but this is optional, non-default setup that they chose for whatever reason. I don't do this for my place, instant booking without prejudice :)
Meaning: no need to have a local number, usually have a reception to avoid needing to agree on an exact time beforehand, hosts are actually on time (I hate when I agree on a time and there's nobody around), hosts are actually reachable, etc.
I don't find AirBnb cheaper or anything, you still pay a pretty big service fee. It's just less hidden.
Off the top of my head, a short list of advantages I like:
- someone that will take my side in disputes
- being able to book multiple hotels on one account, in the same place
- cards in wallet in my iphone
- knowing exactly what I'll get
- avoiding misunderstandings that might arise when having to book orally (i.e. wrong number of rooms, wrong number of people, ...)
And that's beyond the superpowerful search, which is kind of immoral to use without giving them the referral fee.
I recently booked a room in stockholm that looked nice on booking.com. It was only after I booked that I was contacted by the owner and told how to meet up and get the key etc . I was pretty upset it wasn't an actual hotel but it was arguably too late to change things. It turned out to just be someone's apartment.
I have no idea if booking.com knew that. I do know I would not have booked if I had know for this particular trip.
Unlike Airbnb the apartment did want me to pay the tourist tax. Strangely, I paid a bit less than what booking.com said I should've. I mentioned it but the guy ignored it (oh well).
Usually I do check around (see if I can find a cheaper rate by booking directly).
After booking, my wife noted that the email they sent referenced an apartment instead of the hotel. Sure enough, it was different... It was across the street!
I got instructions to go to the other side of Akihabara, up a few floors, and get a key from some office there.
In the end, we chose to pay for the first day of the "hotel room" and cancel the booking, going to a real hotel instead.
I was on a recent trip to Poland.
Accommodations for one city was on Airbnn(zealously over-finished apartment but nice), one city was on booking.com.
Turns out booking.com accommodations were just an unsold apartment in a half sold building being used as a half hotel in the middle of an unfinished development.
It was a hotel like experience (hotel tax included) but I would have been upset to actually buy an apartment in this building.
I clearly remember the newspaper industry doing a survey in the late nineties showing that the Internet wasn't materially hurting their business. Then sometime after 2003 the industry fell off a cliff.
People also travel a lot more these days thanks to cheap flights (which have just gone through years of low fuel prices) and higher disposable income, so the holiday market as a whole is expanding.
Netflix used to be a unicorn at one time. It didn't primarily expand the rental market to become a unicorn, it rather rapidly destroyed Blockbuster and thousands of other rental stores by providing a better service. If it was primarily expanding that market, Blockbuster would still be around. Today it's not expanding total TV viewing time, it's proceeding to harm cable, tv networks, traditional tv programming, ESPN, HBO, etc etc.
Tesla - also once a unicorn - isn't expanding the automobile market. They've been directly taking sales from BMW, Mercedes, Porsche, Lexus, Audi, etc. The success of the S sedan is coming out of the high end luxury car sales segment. Their 3 sedan will continue that process. That's why those other companies are so freaked out by Tesla's arrival and relative success. If Tesla were primarily expanding the market and not stealing market share, the competition wouldn't be reacting the way they are.
Just think for a second about countries and cities which did not have taxis.
Which countries and cities didn't have taxis before Uber?
In the 6 months I spent in Lyon (2nd city from France), I only saw a taxi once.
I searched the internet for "taxis in France" and generally get the impression that "Rates in Paris are different from the rest of France. ... There are four main tariffs for taxis outside Paris."[1]
This[2] article claims a "nationwide protest against Uber", which would seem odd for, as you would have us believe, a nation without taxis.
1. http://www.expatfocus.com/expatriate-france-taxis 2. http://www.theverge.com/2015/6/25/8844649/french-taxi-driver...
Uber et al may be harming the taxi business, but my friends and I only took taxis if we had to in our town because they were hard to find, and generally sucked. Now we Uber to go out because it is so convenient. Another friends car broke down and he just never replaced it. He didn't drive that much anyway, and Uber satisfied his need for a car. He would have never done that with the traditional, unreliable taxi in my town.
Uber has definitely expanded the number of people who take a driver service. I wonder if anyone has done any statistical studies around DUIs and Uber coming into a town.
A quick Google search will give you some examples.
so it is more applicable to simply assume it is "blatantly true" until you prove it isn't, as well as find all of the incumbents that were obliterated
In AirBnB's case, the only way it can really grow the market is by providing an efficiency that didn't exist before, and in that respect it clearly has: apartments, houses or spare rooms that used to sit empty when the owner was away can now be put to use through AirBnB. That said, I think it's naive to look at AirBnB's cherry picked data and not think they are having some marketshare impact on hotels, especially on the budget side where AirBnB is clearly a substitute good (think Motel 6 vs AirBnb).
but in any case I am genuinely curious. I can see the conflict of getting data only from AirBnB.
But perhaps prices simply reached an equilibrium. For example, there was a time when I could count on AirBnB being MUCH cheaper than hotels. Now they are about the same in most areas I look in. I can also see some hotels having less variance in their prices during certain time periods.
In Portugal, it seems to be coming from the rental market. In the sense that there's been an increase in tourism and the increased demand for short-term accommodation is being fulfilled with properties which were previously for longer rentals.
This has happened in Ireland, and especially Dublin as well. With rents increasing by 10% per year, AirBnB is blamed by some for reducing the stock of privately rented accomodation.
What is "group"?
* Can hostfully.com identify suspicious data analysis? (no.)
* If given the chance, will Airbnb present misleading data for self-serving ends? (yes.)
* Will an already self-serving study be given an even more self-serving spin when presented by a sympathetic reporter? (yes.)
To understand what I'm talking about, consider the source cited by OP (http://hotelnewsnow.com/Articles/77191/New-Airbnb-data-sheds...). Going by that data we might be tempted to say that Airbnb is being out-competed by the hotel industry.
However, stagnant growth on the part of AirBnb seems like it would have been widely reported. And yet it hasn't. Googling we find a seemingly contradictory datapoint: Airbnb's revenue is up 89% this year (http://www.bizjournals.com/sanfrancisco/news/2016/09/01/airb...).
How can Airbnb's revenue have almost doubled while still losing market share across the board?
Option 1. They didn't lose market share across the board, and instead cherry picked non-representative markets for their 13 region hotel comparison.
Option 2. They lost large numbers of low-margin bookings across the board, while gaining (taking market share from hotels) higher margin bookings. [Note this would contradict OP's article.]
In both cases, Airbnb's data is misleading.
While I know my situation is not a representative sample, I do travel a lot and observed the same thing in various places, including other countries. I discussed it with other travelers, and they reported the same.
So I wouldn't conclude that everything is ok for hotels. The story needs more data.
[1] http://www.wsj.com/articles/terror-attacks-weigh-on-europes-...
Hotels typically have about a 5 year cycle.
Families can get a more memorable experience and usually a more economical one with a home rental. My property has even been getting small corporate retreats.
There's a lot of people that have never tried the hospitality sharing economy. Only 6% have [1]. It's kind of intimidating and unknown the first time but once you do it you realize it's pretty awesome.
Also - hotels will be hurting when businesses adopt home share credit card rewards. You'll see a shift from business travelers. Many have Marriott rewards cards as an example like they used to have Blackberries. They'll demand a more flexible option which will be a game changer.
Example: https://www.americanexpress.com/us/content/airbnb/
Hotels are definitely worried - they're just not putting that out there because most of the large brands are public franchises.
[1] https://www.pwc.com/us/en/technology/publications/assets/pwc...
We'll see. I'm a frequent business traveler who often prefers smaller and more local when I travel on vacation and, indeed, will often favor "boutique hotels" when I'm on business; I keep an eye on hotel rewards but aren't a slave to them. But, when traveling on business, I really do want a predictable experience, 24 hour desk, etc. I'm not looking for travel experiences from the hotel perspective at all.
My place is accessed by touchscreen code and I let visitors check in whenever they want and usually let them check out late at no charge if requested. 50M internet. Killer kitchen, tons of work space, grill, new hot tub.
AirBnB is pushing more hosts toward instant book which will make it easier for business travel. They also prioritize hosts that respond quickly because booking has to be easy to convert, especially for last minute bookings and biz travel.
It may not be for you, but many on business don't necessarily look for an experience - they just want amenities and features they have at home. Younger people are generally more excited about AirBnB too so that will drive more growth and adoption as they become the traveling warriors.
AirBnB and others need not take huge market share from hotels that cater to business travelers to cause them to hurt. Expenses are on the rise for hotels and changes in the minimum wage and labor laws will have a big impact too. The industry pays very little and demands a lot from their employees.
I'm not even necessarily a particularly representative business traveler. I like my points but I don't organize trips around them. I don't need or use a lot of traditional hotel amenities like fitness centers. I don't need concierges. I just don't want complications when my plane is delayed 5 hours that involve calling some guy to coordinate getting a key.
Trivial: Because the market size increases. More people are renting hotels/airbnb + more often + for longer durations.
For starters, I believe that comparisons shouldn't oppose AirBnb and Hotels because they don't appeal to the same demographics (though there is some overlap).
Lol, yes, this is fair. The hotel market doubling in revenue would be headline news at the WSJ, etc though.
We can actually get a rough sense of what's happened to the market as a whole by looking at the stock prices and cashflows of the major hotel chains. Looks like Mariott has lost a bit of value in the last year[1], same for Hilton[2]. La Quinta holdings went way down[3]. Please check the hotel chain of your choice if you feel I cherry picked these examples (Motel 6 and Best Western were my first choices, but are privately held).
Which is to say it doesn't appear that the market doubled in size.
[1] https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&...
[2] https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&...
[3] https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&...
> Option 1. They didn't lose market share across the board, and instead cherry picked non-representative markets for their 13 region hotel comparison.
(from higher up this comment chain)
In the former case, you're competing with a bunch of alternatives that you're happy to substitute given a better/cheaper option. Maybe you take less public transportation or don't ask for a ride or don't drive yourself and use Uber.
AirBnB, on the other hand... Yes, some people will travel more/stay longer given cheaper lodgings but there are a lot of other costs associated with travel (including, for most, vacation time) so it's harder for me to believe that AirBnB will dramatically increase lodging days to the same degree that Uber could potentially increase taxi or private car-like service miles.
Also, AirBnB doesn't only compete with hotels... a lot of the market share in my country (Uruguay) was actually taken from real estate agencies for short-term vacation rentals, not hotels.
Edit: same in Portugal and Ireland, see https://news.ycombinator.com/item?id=12732874
That's not market elasticity though. That's shifting from one booking agency to another. When my family rented a vacation home we used various small vacation home services. I have no doubt we'd consider using AirBnB today if we still had the place.
I don't doubt that lower prices, where they exist, make a difference at the margins. I'm just skeptical that the effect is big. And, as the business traveler that I am most of the time, I mostly want predictability and a 24-hour desk from a hotel.
First, huge hotel chains are an American thing, the rest of the world (Europe in particular) is managed by many smaller players for which you cannot have numbers.
Second, the American chains are a fairly stable and fixed business limited by physical buildings, AirBnb is worldwide and extending to 100 countries as we speak. The current hotels vs airbnb state in America is already determined BUT only valid for America. What will be the market shares per country and cities... this has yet to be determined. Meanwhile AirBnB starting from 0% everywhere else is enough to justify growing income and revenues.
Third, there could be 10 (or 100?) times money stuck in the black market. (People who pay hand-to-hand, rent to a friend of a friend, gumtree, newspapers listings and the likes). AirBnb can tap into this black market and make it emerge, whereas this space is irrelevant for hotels.
You wanna talk business. Please compare numbers from hotels.com and booking.com and airbnb.com
That's a multi billion dollars audience yet only a small fraction of the global housing and rental markets.
AirBnb is playing in many more markets than just competing with hotels.
added the word 'roughly'
Of course, if that happens, others would be losing "share", albeit not shrinking in absolute terms. But, in fairness, the article seems very wishy washy in its definition of "market share".
If total revenues for the whole market are 100, and AirBnB's share is 1. Then the total revenues only have to go up to 102, for AirBnB to capture all the new revenue and thus double its revenue.
The marketshare isn't based on revenue, but total supply of rooms/listings available, so its possible to lose marketshare and gain revenue.
By whom? I agree it would be big news (and people love negativity) but it's a private company with powerful insiders and investors, and they control the narrative.
I'm a fringe point, Ive always preferred saving money for experience. So I'm used to hostels, couch surfing, etc. I would only touch hotels if it was part of a rewards program.
I'm also a host. My rooms are priced at 12 and 25 a night. I've noticed two trends and seen it backed up via host forums.
Firstly travelers are expecting hotel quality at a fraction of the price. They're expecting travel toiletries, clean to the point of shining. I purchased a number of travel size soaps and one customer raided my entire supply. This stuff adds up. I can buy some items in bulk. But not at the discount rate of hotels. I also offer food when I'm making it. Some customers outright asked me where's breakfast. Oddly ive seen this primarily with younger people. Older, 40+, join the household. Cook with us and buy ingredients.
Secondly I'm seeing Airbnb as a short term rental place. After 2 weeks listed I had one room booked for 6 months the other for 4 months. These are largely people who are just moving to the area, and finding their grounding. Or I've seen a lot of visas doing short term contracts.
I can pretty much boil my listing down too. Either a short term rental. Or a stopping point between Philadelphia and Baltimore/DC.
I'll blame that on the AirBnB name itself. BnB implies Bed and Breakfast, so people might rightly expect that breakfast would be served.
I think it'd be better if both sides---consumer/suppliers---looked at AirBnB offerings as a bed and breakfast or a vacation rental, but never as a straight up hotel or couchsurfing replacement.
Thats why you booked 6 months so quickly
To be honest, I can't say that I have a compelling interest in protecting hotel market share. As a resident of NYC, however, I do have an interest in protecting my relatively cheap (but in-the-real-world-expensive-as-hell) rent. I see more and more people with suitcases leaving and entering buildings in the neighborhood, and I have to wonder what that is doing to rent prices.
It's still a gut thing right now, but the case feels like it's getting more compelling.