Airbnb has been a major disruptor in the travel business of recent years. Justyn Barnes reports.
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In 2016 it announced Trips – the company’s first foray into local, bookable experiences – and confirmed its aim to add flights into the booking process in the future.
However, little is known about Airbnb’s business, according to Jeroen Oskam, director of Hotelschool The Hague, which claims to be the only research institute to have conducted analysis of Airbnb in Europe so far, looking at Amsterdam, Berlin, London and Madrid.
Its “commerce with a human connection” tagline conjures up images of staying with local families, but in all four cities studied, most accommodation offered is entire homes or apartments and between 37.2% (Amsterdam) and 65.7% (Madrid) of all units are offered by “multi-listers”.
Oskam said Airbnb rarely discloses data because: one, it wants to avoid being regulated in cities; two, monopolising traveller data preserves its competitive advantage; and, three, it’s part of the company’s marketing strategy. “It has this mantra, ‘Live like a local’ and we tend to believe that,” said Oskam.
“It does publish some studies and all have the same message – Airbnb benefits cities.”
Hotelschool’s report on Amsterdam revealed demand growth of 474% in 2015, compared with 2014 and projected year-on-year growth of 98-118% in 2016, but further analysis undermined some of Airbnb’s claims.
For example, Airbnb says it empowers residents in poorer, peripheral neighbourhoods, but in Amsterdam its units are focused in the city centre. Its “commerce with a human connection” tagline conjures up images of staying with local families, but in all four cities studied, most accommodation offered is entire homes or apartments and between 37.2% (Amsterdam) and 65.7% (Madrid) of all units are offered by “multi-listers”.
Hosts with more than 10 listings are usually management firms, and this is especially true in London, where 21.8% of Airbnb units were owned by hosts with more than 10 listings. Hotelschool’s conclusion is that Airbnb sharpens the socio-economic divide in cities.
Far from making use of underutilised assets, it involves reserving assets for visitors, and prices are driven up as people rent rooms to tourists rather than locals. A big question is whether Airbnb cannibalises the hotel market.
In Amsterdam, there does not seem to be any evidence of that as the hotel market is still growing. Speaking at the WTM Travel Innovation Summit in association with the Travel Technology Institute, Oskam said: “In London, I start to doubt, because we see a decline in hotel performance and Airbnb is growing strongly”.
Indeed, London saw 206% demand growth in 2015, with some 1.3 million visitors generating revenue of £228 million. “We tend to generalise Airbnb,” noted Oskam, “but it varies in different cities. Amsterdam and London are alike because high hotel prices mean greater incentives for investors to buy properties and put them on Airbnb, whereas Madrid and Berlin are much cheaper and evolve differently.”
"We want to be good partners to London and we are always investigating new ways to work with policymakers to promote responsible home sharing that makes communities stronger.”
Berlin has unsuccessfully tried to ban Airbnb, the only effect being to drive up prices as hosts protect themselves against possible fines. Airbnb has also succumbed to pressure from London and Amsterdam to limit the number of days a property can be rented out per year.
So does Airbnb offer a genuinely different experience? “We believe that it does in general… but the marketing helps us believe that,” says Oskam, pointing out that Douglas Atkin, author of 2003 book The Culting of Brands, is now Airbnb’s global head of community.
A spokesperson for Airbnb told TTG: “Airbnb is growing because our platform reflects the way people live, work and travel in the 21st century.
“Countless experts agree Airbnb is complementary to the existing hospitality industry and helps more people to travel, which is good news for everyone. We want to be good partners to London and we are always investigating new ways to work with policymakers to promote responsible home sharing that makes communities stronger.”
As Airbnb looks to expand its offering with Trips and potentially flights, time – and data – will reveal if it is able to grow alongside the UK travel trade as a “good partner”.