Please wait as we prepare your PDF file ....

Mission Chronicle Blog

Search Blog

our goal is to help you stay informed by providing timely and interesting articles.

Airbnb cannibalizes budget hotels but amps up demand for rooms

05/15/2019

Download PDF

There might be more to the story than just Airbnb taking business away from hotels. A new study found that the home rental platform actually takes the most business away from inexpensive budget hotels while driving up demand for the hospitality industry in general.

The study, which was published by Tepper School of Business at Carnegie Mellon, researchers Hui Li and Kannan Srinivasan and first reported on by the Commercial Observer, looked at how Airbnb and other similar rental sites are affecting the hotel industry. Overall, Airbnb is most popular with what is known as leisure travelers, people who travel for pleasure occasionally and generally look for inexpensive places to rent.

A lot of those travelers, who according to the study currently make up 90 percent of Airbnb’s sales, have been going to the rental company rather than booking in a cheap hotel like they would have a decade ago. After analyzing hotel rates in Chicago, Los Angeles, San Francisco, Washington, D.C., Austin, New Orleans, Seattle and Miami, the study’s authors found that mid-level hotels may have to lower their prices even during peak seasons as fewer customers book their rooms.

At the same time, having these rental options often ends up driving more travelers to locations which they wouldn’t have otherwise visited. As more vacationers come, hotels will have to offer competitive pricing and, according to the study’s authors, do away with the traditional model of jacking up prices during popular times and lowering them in the off-season.

“Airbnb cannibalizes hotel sales, especially for lower end hotels,” Li said in a statement. “[The company] can help stabilize or even increase demand during peak travel seasons, offsetting the potential for higher hotel prices, which can sometimes be a deterrent.”

Overall, Airbnb has been affecting mid-level and budget hotels much more than higher-end ones as the site is still used primarily by those who would look for affordable options. But as Airbnb makes an effort to draw in more luxury and business travelers — for example, through the launch of the Airbnb Plus feature — those types of hotels may eventually start to feel the sting of business competition.

Why you should generate your own leads Want to grow your business? Don’t outsource lead gen. READ MORE

Email Veronika Bondarenko

Source: click here

Read More

INSPIRED, INTELLIGENT, INSIGHTFULL

STAY INFORMED WITH TIMELY AND INTERESTING ARTICLES FROM OUR BLOG, MISSION CHRONICLE. OUR ASPIRATION IS TO PROVIDE REALTORS AND OTHER REAL ESTATE INDUSTRY PROFESSIONALS WITH EXCEPTIONAL RESOURCES AND SHARE OUR KNOWLEDGE TO PROPEL YOU TO YOUR GOALS.

  • Episode 2 – Defining Success Through Failure

    Emerging from a low point in his life, both personally and professionally, Gary Keller reevaluated, ...

  • How to be a rock for clients when things get shaky

    In light of the recent earthquakes in Southern California, there is no better time to remind ourselv...

  • Why younger generations need to understand credit scores now

    Young consumers are blithely unaware of the importance of credit scores to their financial lives, ac...

  • Agent/broker perspective: How brokerages can address affordable housing

    With each year, a successful Miami agent is seeing more of her low- and middle-income clients strugg...

  • Top brokerages find new ways to carve out profit

    According to recent data from REAL Trends, the average retained company dollar dwindled to a mere 14...

  • How to create the ultimate comparative market analysis for your sellers 

    Pricing a home is no delicate matter. The data can be overwhelming. But the right tech tools can ena...

  • Grow or die! 3 tips for moving your business forward

    You have to choose to focus, you have to choose to take action, you have to choose to grow, or you w...

  • What do these ’30 Under 30′ agents all have in common?

    Every summer the National Association of Realtors names its 30 Under 30 honorees. These real estate ...

  • Boost your brand, efficiency and productivity with one platform

    Your agents are busy. They’re doing routine tasks like making copies and answering emails, along w...

  • The top 3 trends homebuyers want this season

    What’s hot and what’s not when it comes to property listings shifts every season as a new genera...

July 2019
Mon Tue Wed Thu Fri Sat Sun
« Jun    
1234567
891011121314
15161718192021
22232425262728
293031  

  • Polls

    What information you are looking for?

    View Results

    Loading ... Loading ...
  • Last month Results

    How Is My Site?

    • Good (100%, 3 Votes)
    • Excellent (0%, 0 Votes)
    • Bad (0%, 0 Votes)
    • Can Be Improved (0%, 0 Votes)
    • No Comments (0%, 0 Votes)

    Total Voters: 3

    Vote

    Loading ... Loading ...