The traditional taxi business is far from dead, but the ever-burgeoning popularity of rideshare services like Uber and Lyft is a clear threat to the survival of the yellow cabs that for decades have been a mainstay of big-city transportation. It’s fair to say that the rise of Uber and its ilk have led to the erosion of taxis, and could eventually lead to their outright demise (or, perhaps, their radical transformation).
Should hotels be worried that homesharing services like Airbnb and HomeAway portend a similar withering of the traditional hotel business model?
Just this week, Bloomberg reports, financial analysts at Bank of America downgraded the stocks of several hotel companies, including Hilton and Hyatt, citing pressure from oversupply and competition from homeshare services: “Alternative accommodations—including Airbnb—are a threat.”
So homesharing is a threat. But is it a death threat, or just a bump in the lodging industry’s road?
There’s an argument gaining currency that while Airbnb will continue to grow, its effect on the hotel industry will be mostly limited to the budget-sensitive segment of the travel market. Wealthier travelers and business travelers, it’s asserted, have no interest in sleeping on someone’s couch, in a fifth-floor walk-up, in a sketchy part of town.
So Hyatt will be unfazed, Motel 6 will take a big hit, but both will survive.
That notion accords with common sense, and is supported by the results of a Pew Research Center study, released yesterday, on the impact of the sharing economy on Americans’ lives. Among the survey’s findings:
- 11% of Americans have used a homeshare service, but fully half aren’t yet aware of them
- College graduates are heaviest users (25%, versus 4% of high-school grads)
- 24% of users have incomes of $75,000 or more
With half the potential market not yet even aware of homeshare services, it’s clear that Airbnb is where Uber was five years ago, with the potential for enormous growth and industry disruption ahead of it. Whether that potential is realized, and at whose expense, remain to be seen.
Reader Reality Check
Are you a homeshare customer?
After 20 years working in the travel industry, and almost that long writing about it, Tim Winship knows a thing or two about travel. Follow him on Twitter @twinship.
This article first appeared on SmarterTravel.com, where Tim is Editor-at-Large.
No.
Because frankly when I travel for business, or with my family, I often want to know what kind of room and service to expect.
Out of our 2 AirBnB stays so far, the one in Iceland was very good. The one in Rome however, was just OK. The apartment did offer us the advantage of cooking our own meals. However it was not as nice as picture, and most critically had no air conditioning despite it being claimed on the ad. It was hot, so I spent every night struggling with sweaty sleep.
No! I have never stayed at an airbnb, and have zero plans to do so. I don’t need to fix my bed and cook when I travel. That’s what I pay others to do.
No. With chain hotels, I have the assurance that the room I booked will be there when I arrived. Or at least they will arrange for alternative accomodation if they are overbooked. I have had experiences with Airbnb where the host cancelled a few days prior to my arrival only to re list her listing and tripled the rates. It was the New Year holiday in Hong Kong. Tried to rebook with 10 other hosts, they did the same, declined my request, only to jack up their rates later. By then most hotels were either fully booked or had very expensive last minutes booking rates.