15 Jul The AirBnb Effect

AirBnb has been making lots of press lately. Rumours have their impending round of investment valuing the company at $20 Billion.  That’s more than Starwood, Wyndham, Hyatt and many others. How will AirBnb affect your market? There are some tools which can help determine the number of AirBnb rentals in your area.

A recent report from Boston University demonstrates that a 10% increase in AirBnb supply, results in a 0.35% decrease in Hotel revenue. Interestingly, the study finds Hotels which focused on business guests to be less affected by additional supply from players like AirBnb than those who focus on leisure travelers.

There are some useful analytical tools regarding how many, and the style of AirBnb rental listings are in a specific geographic region. Unfortunately, these tools & data are more available for the United States, and less so in Canada.

Priceonomics completed a comparison of AirBnb to Hotel rates in the USA. One can likely draw parallel comparisons in Canada using a similar sister city in the US.

So what’s does the future look like?

• AirBnb & similar companies are here to stay.
• An increase in rooms supply, will affect rate and occupancy in certain regions.
• Resorts & Rural hotels are more likely to be affected by an increase in supply of rooms.
• Urban properties with more business guests are less vulnerable.
• Less Hotels & Resorts will be built (in the short run) as supply increases through AirBnb, Homeaway & VRBO.

What can you do? Be aware of the changing landscape. Its not happening “overnight”. is the first step in being able to adjust to changes in supply, service and guest expectations.