The hot-button topic at the recent NYU International Hospitality Investment Conference wasn’t bedbugs. It wasn’t the economy. It wasn’t even online travel sites.
It was Airbnb.
The service that provides listings of private individuals who agree to rent out their guest room spaces to travelers (generally at a lower cost than that of chain hotels in any given city) is now boasting more than 1 million listings in the world, and that number is climbing steadily.
And now, it’s taking aim at the sports travel market. In fact, in mid-May, Airbnb kicked the door down when it officially made its U.S. debut in the sports event planning world, as the title sponsor of the 2015 Airbnb Brooklyn Half Marathon. And unsurprisingly, the website for the event not only listed information on registration but on hosting runners and finding accommodations, as well as on a full complement of Airbnb-sponsored events leading up to the race.
According to the Brooklyn ABC affiliate, a record-breaking 26,482 runners crossed the finish line at the 2015 Airbnb Brooklyn Half, making the race the largest in event history and the largest half-marathon to date in the United States in 2015.
It was pretty hard not to notice Airbnb had made a grand entrance.
In choosing an event to sponsor, Airbnb has already displayed its sports-travel-savvy; according to Running USA, the half marathon is the fastest-growing national road race event, last year topping over 2 million participants.
And that wasn't Airbnb's first foray into the sports event world. An article in Successful Meetings noted that last year, the platform provided rooming services to (gulp!) the FIFA World Cup in Brazil. Over its one-month course, the World Cup brought more than 3,429,873 people to the country - much more than the number of hotel rooms available.
"FIFA called us and told us their hotel supply was constrained," said Michael Brous, senior business development lead for Airbnb. "We unlocked increased supply in a matter of weeks, and 20 percent of attendees stayed in an Airbnb; 120,000 people stayed in more than 18,000 Airbnb homes in Rio de Janeiro alone. This generated $40 million for local residents."
Brous told this to a packed room of meetings and events industry players - planners, hoteliers, and tourism professionals alike - during an educational session held at IBTM America in Chicago on June 9. He was speaking as part of a panel, "Sharing Economy: Disruptive Opportunities for Events," organized by IBTM America and the Professional Convention Management Association (PCMA).
Today, Airbnb is in more than 191 different countries and 34,000 cities. In just a single night, 400,000 guests will stay at an Airbnb property. The shared economy company itself is valued at $10 billion, and it continues to grow. There are even Airbnb properties in Cuba, according to CNN. And although it's often viewed as a disruptor of the traditional hotel booking model for groups and events, Brous says it's eager to work with planners, as well as convention and visitors bureaus (CVBs) and DMOs, to provide housing for meetings, incentives, conventions and exhibitions. Some groups, including members of Airbnb's own employees, have even booked an Airbnb space to be used exclusively as a gathering or meeting space for smaller groups. Experient, as well, has been working with Airbnb with a select number of clients.
And that means hoteliers can no longer shrug off the little accommodation search engine that could; in fact, it’s poised to take a bite out of their business.
An article in Travel Weekly noted that hoteliers at the NYU conference, and particularly the boutique property owners who were present, “bemoaned Airbnb’s impact on hotel-room demand and what they asserted were illegal advantages (via lower costs) that Airbnb unit owners had over hotel owners. Some panelists said many Airbnb hosts were operating illegally because of laws prohibiting short-term rentals in many cities. They also decried what they said was an uneven playing field because most Airbnb unit owners don’t comply with the insurance, fire-safety and disability-access mandates that apply to hotels.”
But while Airbnb obviously isn’t a contender in the battle to service the group sports travel market as a whole (it obviously poses no threat to big hotels, particularly chains, who are jockeying for status as official headquarters properties for large events or who are seeking to be part of stay-to-play arrangements), it could threaten smaller independent properties. It is also taking bold steps into its own part of the market: the much-sought-after millennial.
Consider, after all, the following factors Airbnb has in its favor when it comes to wooing this demographic:
The platform is attractive to those who are Internet-savvy;
It appeals to those who are gratified by the philosophy of the sharing economy;
It offers an attractive option to young adults who do not have as much disposable income, but who want to travel;
It appeals to the market of young athletes who are currently participating in individual events, such as obstacle races, tennis tournaments, triathlons or any event that might attract athletes who might not necessarily be traveling with family members which would necessitate traditional hotel accommodations.
And while large hotel chains decry Airbnb’s work, the TravelWeekly article noted that Airbnb's side of the argument is it brings extra funds to cities via guests who wouldn’t otherwise travel. The closely-held company said in May that the 760,000 people who stayed in Airbnb’s New York properties last year generated $1.15 billion in economic activity in New York.
Not that New York isn’t already a sore spot for hoteliers. An article in The Guardian noted that while Airbnb’s practices are not in themselves illegal, in many cases the rentals advertised on the site fall foul of local housing laws and regulations. For example, in New York, owners or tenants cannot legally rent their apartments out for short periods (less than 30 days) unless they are also living in the property. There is also a tax issue; in many cities those renting out holiday accommodation are expected to pay a hotel or tourist tax.
“We’re not going to stop them, but they have to be regulated,” said Interstate Hotels CEO and American Hotel & Lodging Association Chair Jim Abrahamson in an NYU conference panel. “Half the inventory of Airbnb is illegal in New York.” The quote appeared in the TravelWeekly article which also noted that Airbnb has gained some political goodwill in cities such as Chicago and Washington by collecting occupancy taxes on their behalf and has worked with cities like San Francisco and Portland, Oregon, at “legalizing” rental-by-owner units.
But love it or hate it, Airbnb appears to have dug in for the long haul, and can be expected to become a player of growing power in sports travel. In April, The Economist reported that if Airbnb continues to grow at its current rate, by 2016 it will be taking a 10% bite out of hotels' takings – enough to send at least a few independent properties out of the game.
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