Mobile Apps Like Airbnb cause losses to Hotel Industry Business?
If you’re a traveler or are tech savvy, you may be familiar with the app Airbnb and others like it, that have managed to make life a tad bit easier and affordable for all those who use them. Airbnb is, basically, a mobile application that helps travellers and tourists to find a temporary accommodation, according to their preferences and budget. Founded in 2005, Airbnb describes itself as “a social website that connects people who have space to share with those who are looking for a place to stay”.
As easy and convenient it is for the one who’re always on the move, hotel industries around the world claim that these apps have disrupted the business of hospitality.
In Dubai, Head of Knight Fank’s Development Consultancy and Research, Harmen de Jong, told the local radio channel that “during the summer time there has been a conversion of rev-bar (revenue per available room), so you see that it has become competitive for hoteliers especially when the demand is low”
Jong also expresses that although, during peak season, the hotels in Dubai are able to have their rates high without the fear of losing costumers, but during summer or when the business is slow, the rates have to be dropped in order to meet the packages available on Airbnb, which affects the hotel industry’s economy.
Elsewhere, CBRE Hotels’ Americas Research, released a report last year with figures to highlight exactly how much renting units on Airbnb have degraded the hotel industry’s economy. According to the report $141 billion dollars had been spent by tourists for hotel bookings, and on the other hand,$2.4 billion had been spent by travellers for room lodging, from the time of October 2014 to September 2015. Although, the hotels still come out as victors, as per the statistics, but comparing the same with previous year’s reports, it is observed that the hotel industry has suffered a loss of 1.7% because of Airbnb.
So, weather such apps a boon or a bane, depends on the perspective of the individuals, as for the tourists it might be easy and affordable to book rooms advertised of Airbnb, while for employees of the hotel industry, it come as a bad news.