The hotel industry as we know it has officially changed forever.
Airbnb just surpassed Hilton for consumer spending. This fairly new platform that allows travelers to book directly with property owners has surpassed one of the enduring giants of the hospitality industry. Keep in mind that the Hilton brand existed decades before the Internet and smartphones did.
Executives in the hotel industry have long known that Airbnb was a threat to the legacy model. However, we’re not sure anyone knew just how big of a disruptor this peer-to-peer platform would become until now. The data doesn’t lie. Consumers in the United States spent more on Airbnb rentals in 2018 than they did on stays at Hilton properties. That includes stays at subsidiary brands like Embassy Suites and DoubleTree.
The fact that spending at Airbnb properties eclipsed spending at Hilton properties last year is certainly huge news. However, Hilton isn’t actually the biggest fish in the pond. That would be Marriott. The Marriott brand is the largest hotel brand in the world. Marriott’s influence only grew stronger when it acquired Starwood back in 2016. However, Marriott has every reason to be checking over its shoulder now that we know Airbnb is capable of beating an industry powerhouse like Hilton.
Where is Airbnb seeing most of its growth? About 30% of the company’s growth in 2018 came from spending among consumers in the United States. Many of the people doing the most spending through Airbnb are located in the central part of the United States. There are also pockets of big spenders located in coastal hubs throughout California, Florida and New York. What’s interesting is that people in coastal hubs used to actually account for about half of Airbnb’s bookings. That means that the platform has officially crossed into the territory of being a mainstream option for booking stays.
Stays booked through Airbnb made up about 20% of all bookings in 2018. Airbnb isn’t the only home-sharing platform disrupting the hotel industry. About 11% of all bookings last year actually came through Expedia-owned HomeAway. That means that the two biggest home-sharing platforms managed to steal more than 30% of the year’s bookings from the traditional hotel industry. You can expect that percentage to grow. Airbnb is particularly interested in staking its claim in the business-travel market. A new arm called Airbnb for Work offers options that cater to people who are on the road for business.
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