Hotels risk losing business to Airbnb, says BDRC Hotel Insights panel

By Hannah Thompson contact

- Last updated on GMT

Hotels risk losing business to Airbnb, says BDRC Hotel Insights panel

Related tags: Hotel

Hotels are almost certainly losing business to the sharing economy platforms such as Airbnb, a panel has suggested at this year’s BDRC Hotel Insights Forum 2016.

The debate took place yesterday at the Amba Hotel Charing Cross in London, to answer the question ‘have I actually lost business to the sharing economy?’

Chaired by Andrew Sangster, owner of hotel investment service Hotel Analyst, the panellists were Robert Nadler, chief executive of boutique group Nadler Hotels; Tracey Stephenson, managing director of boutique chain Staying Cool; Max Thorne, managing director at JLL Aparthotel Specialist; and Harry Douglass, associate director of HVS.   

A threat to business

Despite panellists suggesting that Airbnb and similar sites rarely offer service quality as high as larger hotels or boutique brands, they cautiously concluded that the groups could be seen as a threat to business if they remained unregulated.

Figures quoted by Sangster suggested that such sites have been used by one in seven British people to book accommodation, including one in three business travellers.

Robert Nadler said: “Airbnb will have a visible impact. Something that opened over 40,000 rooms in London must have an impact. Chief executives of hotel groups won’t tell you that, but it must do. I think Airbnb is a threat across the board, and if it’s taking business from [hotels], then we’re obviously not doing the right things.”  

Max Thorne from JLL said: “It’s very difficult to quantify the impact [but] one study said that Airbnb had captured USD 450m in the UK in the past 12 months [and] Airbnb is certainly a hot topic among hotel investors.”  

A quirkier service but economy damage?

Airbnb is one of the most well-known examples of the so-called ‘sharing economy’ for accommodation – alongside other sites such as FlipKey ‒ and lists shared rooms, private rooms in houses, and entire flats and houses for short-term rental to the public, all of whom must have a personal profile to use the service.

Proponents of the system say that it offers a more personal, better value and quirkier experience than that offered in hotels, but the platforms have come in for criticism from groups such as the BHA, who have previously claimed that many host users simply rent out their properties like landlords or hotel owners, but without the regulations or taxes to which the latter are subject.

Critics have also said that sites like Airbnb simply serve to drive up prices for long-term renters in the house market as a whole.   

Optimism and consistency

However, the panellists appeared optimistic at times.

Stephenson, whose company runs independently but who also lists boutique rooms on the Airbnb site, said: “There’s enough business out there for everyone. Airbnb has educated and diversified the market, but I think that’s a positive thing, and we’re a better nation and industry because of it.”

Thorne suggested that Airbnb was not necessarily a direct threat to hotels, because its main audience was people who otherwise may not have travelled, yet he admitted that the platforms were “impacting the traditional market as we used to know it”.   

Douglass, from HVS, suggested that Airbnb and similar sites could not be directly compared to hotels, because they offered a very different style of service to hotels and serviced apartments.

The quirky, haphazard nature of properties, he said, actually introduced extra of risk and apprehension into the booking and staying process, which was eliminated by hotels.

He said: “Airbnb is the expectation of inconsistency, while a hotel is the expectation of consistency. That’s the difference.”

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