An exclusive story recently broken by Reuters gives a real insight into the extraordinary rate of growth that Airbnb is achieving and why hotel operators around the world are having to sit up and take note of this fast growing start up. According to the news agency, the company is expected to double its nightly bookings with the website achieving up to 80 million nights booked this year, up from 40 million last year.
According to investors in the company, this rate of growth is expected to accelerate further as the number of listed accommodation providers on the site (it currently totals 1.5 million) expand the number of occasions that guests can stay at their premises. From its early days in San Francisco, where accommodation largely comprised spare rooms in apartments, the site’s listed accommodation providers now include luxury villas, family houses, houseboats and even tree houses.
Initially dismissed as a largely American phenomenon, the company is making a big push into Europe, so much so that 50 per cent of its revenues now come from Europe. Who’d have thought it, but Parisians seem to have particularly embraced the idea; Paris has more listings – 60,000 – than any other European city.
What are traditional hotel operators to make of this upstart? Ignoring it clearly is no longer an option. Worrying about it clearly is. According to a recent survey carried out by a company called Atmosphere, 70 per cent of the 300 hotel groups and hotels that it polled thought that Airbnb – and other similar home-sharing services – ‘would pose a significant threat to their businesses in the next three years’.
And in a further sign of the increasingly topsy turvy world that we live in, the company is already worth over four times what the Hyatt Hotels Corporation is ($25.5 billion compared with a mere $6.7 billion). To achieve that valuation in such a short period of time (Airbnb started life in 2007 by two guys renting out air mattresses and doesn’t’ own a single property) must be pretty galling for Hyatt which started life in 1957 and is now having to run a worldwide portfolio of 618 properties in 51 countries.
Of course, some people would never dream of staying anywhere other than a hotel. But attitudes are changing. So much so that the company is reported to have been sending out letters to home-owners in some European cities encouraging them to list their properties, because their research has shown that ‘people sometimes enjoy renting an entire house, enjoying quiet neighbourhoods and benefiting from the host’s local knowledge’.
So take a good look at your neighbour’s property. If it shows signs of being spruced up with lots of new mattresses being delivered, then watch out!