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Airbnb “sharpens socio-economic divide”

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New report shows Airbnb is not all it makes out to be
Airbnb has been a major disruptor in the travel business of recent years. But a new report shows that it rarely discloses data, “to avoid being regulated in cities”.
In 2016, it announced Trips – the company’s first foray into local, bookable experiences – and confirmed its aim to add flights into the booking process in the future.
However, little is known about Airbnb’s business, according to Jeroen Oskam, director of Hotelschool The Hague, which claims to be the only research institute to have conducted analysis of Airbnb in Europe so far, looking at Amsterdam, Berlin, London and Madrid.
The “commerce with a human connection” tagline conjures up images of staying with local families, but in all four cities studied most of the accommodation offered is entire homes or apartments. Between 37.2% (Amsterdam) and 65.7% (Madrid) of all units are offered by “multi-listers”.
Airbnb rarely discloses data, Oskam says, because: one, it wants to avoid being regulated in cities; two, monopolising traveller data preserves its competitive advantage; and, three, it’s part of the company’s marketing strategy.
“It has this mantra ‘Live like a local’ and we tend to believe that,” said Oskam. “It does publish some studies and all have the same message – Airbnb benefits cities.”
Hotelschool’s report on Amsterdam revealed demand growth of 474% in 2015, compared with 2014, and projected year-on-year growth of 98-118% in 2016, but further analysis undermines some of Airbnb’s claims.
For example, Airbnb says it empowers residents in poorer, peripheral neighbourhoods, but in Amsterdam its units are focused in the city centre.
Hosts with more than 10 listings are usually management firms, and this is especially true in London where 21.8% of Airbnb units are owned by such hosts. Hotelschool’s conclusion is that Airbnb actually sharpens the socio-economic divide in cities.
Far from making use of underutilised assets, it involves reserving assets for visitors, and prices are driven up as people rent rooms to tourists rather than locals.
A big question is whether Airbnb cannibalises the hotel market. In Amsterdam, there does not seem to be any evidence of this as the hotel market is still growing. But in London, “I start to doubt, because we see a decline in hotel performance and Airbnb is growing strongly”, Oskam says.
“We tend to generalise Airbnb, but it varies in different cities. Amsterdam and London are alike because high hotel prices mean greater incentives for investors to buy properties and put them on Airbnb, whereas Madrid and Berlin are much cheaper and evolve differently.”
Berlin has unsuccessfully tried to ban Airbnb, the only effect being to drive up prices as hosts protect themselves against possible fines. Airbnb has also succumbed to pressure from London and Amsterdam to limit the number of days a property can be rented out per year.
TTG Digital

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