Airbnb versus hotels: Room for all, for now

EVEN as they lobby regulators to crack down on residential sharing services, hoteliers play down the threat such companies pose to their industry. The top brass at the Marriott, Four Seasons and Hilton chains have all said that these firms do not compete for their core market of accommodating high-end and business travellers; a vice-president of The Ritz-Carlton group recently claimed she had not even heard of Airbnb. And Airbnb itself agrees, arguing that it does not displace existing lodging but is creating new demand. “I’m optimistic that there isn’t going to be a war” with hotels, Brian Chesky, its boss, said in January.A recent study seems to confirm that, for now at least, Airbnb is only nibbling at the hotel industry’s lunch rather than eating it whole. A team at Boston University examined hotel revenues in Texas, where Airbnb has grown much faster in some cities (like quirky, left-wing Austin) than others (like Fort Worth, more of a cowboy town). They could not find a significant influence from Airbnb on business and luxury hotels. But in places where it has established a presence, it cut the revenues of budget hotels by 5% in the two years to December 2013.If Airbnb were to keep growing at its current rate—its listings are doubling every year—the Texas study suggests that by…

Link to article: www.economist.com/news/business/21601259-there-are-signs-sharing-site-starting-threaten-budget-hotels-room-all?fsrc=rss|bus

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