Airbnb is only one of many new distribution channels which are creating new opportunities for suppliers and consumers. Like previous disruptors it will probably face competition from other web based businesses in the future. This year’s industry report for WTM London included the results of a poll of 1,145 British holidaymakers, all of whom had taken at least a seven-day summer holiday overseas, or in the UK, in 2015. Only 12% of UK holidaymakers reported that they had used Airbnb and of those only 60% said that they would use it again. Of those who have not used it 30% have no intention of doing so. This does not suggest that Airbnb has been as disruptive as some commentators have suggested. However given that Airbnb is strongest in cities and that those who take city breaks may not be taking seven day summer holidays, this survey my under report the impact of Airbnb.
WTM also had it buyers and exhibitors surveyed. 47% of the trade said that their business had been unaffected, 21% said that it had had a positive impact and only 32% reported a negative impact. Garry Wilson, Managing Director – Product & Purchasing, TUI Group pointed out that operators like TUI are in a different market place offering a different fully integrated product to consumers. He also commented that Airbnb was interesting because of the way it was developing dialogue between consumers and producers. It will be interesting to see how established mainstream providers begin to use the web to engage in more “dialogue” with their clients in the next few years. Imagine if there was the equivalent of Amazon for travel or if Google develops a larger travel and tourism dimension to its product range.
Airbnb has come a long way since it began in 2008 with two of the founders subletting a room and three airbeds during a conference in San Francisco to help pay the rent – you can hear James McClure, UK & Ireland General Manager of Airbnb tell the story here. It has grown fast. Airbnb has now hosted 100 million guests, it carries 2.5 million places to stay in 34,000 cities. Airbnb argues that it has spread the benefits of tourism to people who need a supplementary income from their asset to be able to continue to live in a city. Airbnb reports that 96% of people with rooms on Airbnb in London are sharing their primary or secondary property. It may be that earning form Airbnb makes ownership of a second home available a realistic proposition for more people. Opinion will be divided about the desirability of second home ownership particularly in cities like London and Dublin where rising rents are pushing people on to the streets and families into emergency accommodation.
Of course the ideas of shared accommodation is not new, lodgers have long paid to live in someone’s spare room(s) and B&B – Airbnb and similar sites have replaced the small adds in the local or Sunday papers. But it is more than that Airbnb now guarantees the payment by holding the client’s money in an Escrow account until the client has checked in and of course there is user generated content on both the clients and suppliers.
The sub-letting of accommodation can affect housing costs for local residents, making it unaffordable for some and affordable for others able to sub-let, to pay their rent or their mortgage. It was clear listening to the debate between the panellists at WTM that Airbnb needs to be regulated at the city level. Anja Hartung Sfyrla, Head of Business Development for VisitDenmark pointed out that in Denmark homestays had only 1% of the market and that people were looking for a particular experience which only homestays could provide. Jordi William Carnes, General Manager of Turisme de Barcelona took a different view from a city where in areas like Barceloneta there have been protests against the unregulated development of holiday apartments constantly sub-let to partying tourists. Jordi argues that there are three sets of issues that need to be addressed – security for visitors and residents; transparency, businesses need to be declared and licenced; and tax. Properties which are rarely, if ever, occupied by the owners are tourism businesses and should be taxed accordingly – where the property is owned by a non-resident and payments made into a foreign bank account the revenues may not even enter the local economy. Cities will need to evolve new forms of regulation to differentiate between whole property lets through Airbnb and the occasional renting of spare rooms to guests to provide a supplementary income and help out with the rent – that is the sharing economy. Unlicensed properties rented out for large part of the year are not.