New Research Highlights How Airbnb Impacts the Hospitality Industry Worldwide

New research conducted by a team led by Dr. Tarik Dogru of the Dedman School of Hospitality at Florida State University documents the impact that Airbnb has had on the hospitality industry. The study is published in the new issue of the journal "Tourism Management," and is titled "Adding evidence to the debate: Quantifying Airbnb's disruptive impact on ten key hotel markets."

Airbnb is a successful example of a "disruptive innovator," a company that significantly affects the way a market or industry functions. Over the last 10 years it has grown into the "world’s largest online marketplace for lodgings" without the expense of building a single hotel.

And it's popular because it offers a wide array of accommodations at a variety of price points. Moreover, it provides travelers with a more authentic experience, the opportunity to meet local people and shop, eat and drink where they do.

And Airbnb has had a significant impact on the hospitality market as it has expanded worldwide.

Florida State U. News: "The company’s listings have grown more than 100 percent a year — Airbnb now boasts six million listings in 81,000 cities worldwide — and that dramatically larger supply of accommodations has significantly affected hotels’ room prices and revenues."

Professor Dogru found that just a 1 percent increase in Airbnb’s rentals in a city lowered hotel revenues between 0.02 and 0.04 percent. In addition, the study found that Airbnb is driving down the price hotels can charge and lowering their occupancy rates.

Another study published in the International Journal of Hospitality Management in 2018 found similar results and warned the industry of Airbnb's growing influence.

Hospitality Insights: "The results provide empirical evidence that Airbnb will disrupt the hotel business, and that the more Airbnb users are satisfied with their experience, the more likely it is that demand for hotel rooms will decrease. Hotel managers therefore need to be aware of the level of service and price offered by Airbnb and other sharing platforms in their market. Airbnb offers in their locality can no longer be ignored and should be considered when developing revenue management strategies."

"Airbnb is slowly disrupting the lodging industry, going beyond the supplemental role claimed by its founders. The impact of the sharing economy is not related so much to the volume of the offers on the platform but rather on the pricing and price-to-value proposition as perceived by guests."

More state and local regulation may slow its growth, but Airbnb has already redefined the hospitality industry.

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