Airbnb versus hotels: business travellers join the fray

On New Year’s Eve in New York, 47,000 visitors did not stay in hotels, opting instead for properties rented through Airbnb. There are about 113,000 hotel rooms in New York, and not all were full that night. Hoteliers may have finally priced themselves out of the market, as travellers to the city tell tales of vastly overpriced rooms.

And it is not only New York that is reaping the benefit of the disruptive "sharing" economy. Paris has 45,000 listings – 57 per cent are entire homes – while Berlin has more than 15,000, some 68 per cent of which are entire homes. Dublin has 3,773 listings, with 44 per cent being entire homes.

War has raged in various cities over the growth of Airbnb. Santa Barbara on the west coast of the US has banned the company completely. In Berlin, owners are required to register with the city council and with the deadline come and gone, only 6,300 properties have been registered so far.

Additional rooms

CBRE estimates that Airbnb users spent $2.4 billion (€2.2 billion) on accommodation in the US last year. At the Irish

Hotels

Federation conference last week, the number of additional hotel rooms needed in Dublin was estimated to be 3,000.

There are already 3,415 in the planning pipeline, but will the growth of the sharing economy affect the viability of new properties? Last year Dublin had its highest occupancy levels in 10 years.

Two surveys last week identified that rates in the capital increased by 13.4 per cent and 15 per cent last year.

The two studies were carried out by the hotel consultancy HVS and the Hotels.com hotel price index. Irish Hotels Federation chief executive Tim Fenn said that while there had been some increases in room prices in recent months, rates were recovering from "a very low base" following the downturn.

Guest spending

In a case study conducted by Airbnb last year, when Dublin had 2,960 qualifying properties which hosted 143,000 guests. The income earned was €17.3 million and the direct guest spending in Dublin was estimated to be €96.4 million. In Galway, 470 hosts welcomed 32,000 guests and earned €2.2 million. Direct spending in Galway was €9.6 million.

Last year Airbnb branched into business travel and companies that use it can save up to 30 per cent over traditional accommodation.

Statistics emerging are that business travellers are staying twice as long, which would imply that they are combining business and personal time on trips. More than 35 per cent of bookings were for two or more travellers.

The top international destinations are London, Milan and Tokyo. In the first six months 50,000 employees of 5,000 businesses completed bookings. Not surprisingly San Francisco topped the list of the most travelled to destination.

Big hotel groups plan to win back business from Airbnb by launching new chains aimed squarely at the core market: millennials who are looking for an experience suited to their tastes and budget.

Hotels in the US are lobbying for laws that would slow down or stop the growth by restricting homes that can be listed.

The IHF’s Tim Fenn believes that “disruption is okay as long as it is good for society and fair”. He believes issues of health and safety, insurance and adequate redress for guests should be the same for all accommodation providers.

The IHF would like to see all tourism accommodation regulated and have quality assurance, and guest safety and taxation should be the same for everyone.

"We have worked hard to make Ireland a tourism destination with a quality product which people enjoy," he said.