HENDERSONVILLE, TENNESSEE, 24 January 2017: Traditional hotels achieve higher occupancy levels, manage yields better and achieve higher rates than properties in the shared economy space.
The observations were outlined in an independent analysis by STR that compared 32 months of Airbnb proprietary data with hotel performance data in 13 major global markets.
Markets comprised of: Barcelona, Boston, London, Los Angeles, Mexico City, Miami, New Orleans, Paris, San Francisco, Seattle, Sydney, Tokyo and Washington DC.
“We are excited to share our findings from the first comprehensive study on this topic that uses actual Airbnb data and not a scraped data set,” said STR’s senior VP for lodging insights, Jan Freitag. “It is not surprising that results were different in each market, but data suggests that Airbnb owners seem to not deploy yield management strategies as effectively as their hotel counterparts. Occupancies of hotels are higher than Airbnb occupancies, while hotels charge a higher room rate.”
STR identified three key findings from the study.
Airbnb occupancy was the highest in markets where hotels had high occupancy. For example, during the 12 months ending July 2016, Tokyo reported the highest Airbnb occupancy level (61.5%) among the 13 markets and ranked second with an 84.8% hotel occupancy level.
Despite increases in Airbnb supply, the long-range trend of hotel compression nights (occupancy at or above 95%) did not greatly vary in the seven US markets: 61 total in 2013, 75 total in 2014, 76 total in 2015 and 71 total in 2016.
There was little degradation on hotelier pricing power during those compression nights. In the seven US markets, hoteliers priced rooms 30.8% higher on compression nights than non-compression nights in 2013, 25.6% higher in 2014, 34.9% higher in 2015 and 34.8% higher in 2016.
Other findings from the analysis included:
As of November 2016, Airbnb listings (3 million accommodation units) outnumbered the inventory of the world’s largest hotel company, Marriott International, (1.1 million rooms), by nearly three units to one.
However, when removing units that are not comparable to hotels, Airbnb listings numbered 1 million.
Airbnb’s share of market demand and revenues were approximately 4% and 3%, respectively.
Airbnb guests typically stayed longer than the average hotel guest in the seven US markets: 46.5% of all Airbnb room nights sold were part of a seven-day or longer stay, while 9% of all hotel room nights sold were attributed to extended-stay brands.
Hotel occupancy was significantly higher than Airbnb occupancy during the 12 months ending July 2016. Hotel occupancy was highest in Sydney (85.4%) and lowest in Mexico City (68.7%). Airbnb occupancy was highest in Tokyo (61.5%) and lowest in Mexico City (18.4%).
In general, Airbnb’s share of business travel (an estimated 10%) was substantially smaller than its share of leisure travel.
During the 12 months ending July 2016, hotel average daily rate (ADR) in the seven US markets was USD16 higher than Airbnb rates. The largest difference was reported in Miami, where hoteliers charged USD44 more on average than did Airbnb hosts. San Francisco was the most expensive market for hotels (USD232.12) and Airbnb units (USD207.39).
Hotel ADR increased in all but one market (Paris) in the 12 months ending July 2016. Airbnb rates decreased in eight markets and increased in five. Supply may have been a contributing factor to that trend as the majority of the markets analysed saw available Airbnb units increase at or above 40%—and in some cases more than 100%.
STR compared hotel performance data from its global database with Airbnb-sourced data in 13 markets from 1 December 2013 through 31 July 2016.
For the purposes of the analysis, STR excluded Airbnb data for units deemed incomparable to hotels (such as shared accommodations).
The full report can be viewed by CLICKING HERE