Airbnb Continues to Dominate Short-Term Rental Market

NATIONAL REPORT—Airbnb is alive and well, according to the data presented in a webinar hosted by Tambourine and CBRE this week.

“Given the number of people that have switched out a traditional stay for an Airbnb stay and how many total units—that could be resulting in a loss of 0.9% of growth on U.S. RevPAR,” said Jamie Lane, senior economist at CBRE, during the presentation. 

A major event like the Super Bowl can increase the supply of Airbnb units, thereby reducing the profitability of hotels during that time (since they’re potential competitors). “Unlike traditional hotels, Airbnb has a very fluid supply that can react to demand changes quickly,” he said. 

Airbnb is outpacing the short-term rental market significantly. It has become the leader in the sharing economy in the U.S. and worldwide, according to Google Trends. Airbnb overtook VRBO in the U.S. market in 2015; worldwide the homestay network jumped ahead of VRBO and HomeAway between late 2012 and early 2013.

Airbnb’s dominance is continuing. From 2015 to 2016, total supply shot up from 37,344,133 to 81,037,472 (117%); total demand increased from 17,988,135 to 39,836,147 (121.5%); and revenue grew from $2.7 billion to $6.8 billion (147.8%)

The profile of Airbnb demand is made up of mostly leisure travelers; however, 23% of business travelers are expected to try the online marketplace in 2017 (an increase of 11% from 2015). “This isn’t saying that 23% of their trips they’re using it, but they’ve at least tried it on some of those trips,” Lane pointed out during the presentation. Additionally, only 17% of stays on Airbnb are 30 days or more.