Though the future continues to look bright for the alternative accommodations space, the category has inevitably started to mature in recent years.
Category leader Airbnb has long dominated the segment, and while the company remains bullish as it prepares to go public next year, industry experts have posited that the platform's breakneck rise may be leveling off.
"Airbnb is continuing to grow, but I don't think that the growth in listings is moving at rocket speed anymore, especially in traditional markets where the service may have caught on earlier," said Daniel Guttentag, assistant professor of hospitality and tourism management at the College of Charleston's School of Business and director of the department's Office of Tourism Analysis. "Airbnb's overall growth is starting to plateau."
Still, with home-sharing and vacation rentals accounting for a relatively small percentage of the overall lodging business, there remains plenty of runway, and 2019 could be the year Airbnb faces some disruption of its own. A bevy of newcomers are already looking to steal share, with some opting to carve out niche segments. These include platforms like Misterb&b, which caters to gay men, and Innclusive, which launched as Noirbnb and promises a more racially inclusive home-sharing experience. Both concepts come as Airbnb has grappled with complaints of host discrimination in recent years.
Makarand Mody, assistant professor of hospitality marketing at Boston University's School of Hospitality Administration, said, "These concepts are home-sharing, but they're trying to leverage the broader social trends and tap into these conversations around race and gender that we're seeing around us. They're going after those that are perhaps disenchanted by Airbnb."
Other alternative-accommodation startups are taking a fresh approach to real estate and exploring ways to marry apartment-style lodging with more branded hotel-like amenities and consistency.
Steve Weikal, head of industry relations at the Massachusetts Institute of Technology Center for Real Estate, said that technology is changing the market.
"We've seen a new wave of startups crop up in the commercial real estate space over the last five or six years engaging in what's called 'real estate fracking,'" Weikal said. "What that means is that the use of real estate is getting broken up in smaller pieces and then reconfigured into higher-value configurations. Space is getting optimized. It's getting split apart and mixed in combinations and ways that we weren't able to do before because of technology."
Among those innovating in the emerging "apartment hotel" space is WhyHotel, which forges partnerships with yet-to-be leased luxury apartment buildings, turning empty units into temporary hotel suites while offering amenities and a 24/7 on-site staff.
Airbnb and Niido partnered on this Orlando apartment complex.
Playing in a similar category is the Guild, an Austin, Texas-based startup that leases longer-term space in mixed-use buildings and lets apartments as hotel suites and also features on-site staff and concierge services. Both companies have received sizable capital investments in recent months, so they'll likely be growing their reach next year.
"These startups are looking at a building and asking, 'Why is that part of the building sitting empty?'" Weikal said. "They're saying, 'Here's this new apartment building that's already built. Now I can go in and operate a hotel, and I don't have to worry about the real estate.' It's really clever."
Along with smaller newcomers, hospitality's biggest players will also be seeking ways to improve and expand on the home-rental front in 2019.
Though AccorHotels and Hyatt have seen less than promising results with their Onefinestay and Oasis offshoots, with Hyatt going so far as to offload Oasis in October, Marriott has reported a strong start for its Tribute home-rental portfolio, which debuted in London. With Tribute's European pilot test recently rolling out in Paris, Rome and Lisbon, signs point to the brand's expansion.
"While it's still early to say for Marriott, the home-sharing models that the hotels have used so far aren't working," Mody said. "They may continue to struggle, because once you stay at a Marriott or other branded hotel, you have certain expectations, and you'll be bringing those expectations of service and aesthetic to their home rentals, as well. If they're not met, you're going to be disappointed."
One hotelier that may have come up with the right recipe for home-sharing success is the boutique Spanish brand Room Mate Hotels, which launched its Be Mate home-rental brand in 2014. Featuring a curated collection of design-focused home rentals, Be Mate has differentiated itself by offering guests access to the amenities of nearby partner hotels and is enjoying healthy growth in its core European markets.
Mody said, "Room Mate's strategy has been very innovative. They're growing their supply of Be Mate apartments in cities where they already have hotels, leveraging some of the synergies there and providing services at some level of scale. It's an interesting one to watch."
Of course, with the threat of competition looming, Airbnb is hardly standing pat. The platform has started branching out, adding boutique hotels to its inventory and ramping up its focus on the business-travel market.
Next year, Airbnb could opt to accelerate its partnership with apartment developer Niido, through which the platform opened its first branded apartment complexes specifically designed for tenants who want to sublease units to short-term guests. Airbnb's existing Niido properties are in Nashville and Orlando.
The company recently announced the launch of Backyard, billed as "an initiative to prototype new ways that homes can be designed, built and shared."
Airbnb said it plans to start testing Backyard prototype units as early as next fall, fueling speculation that the company could one day manufacture its own lodging and even sell real estate.
"I think there will be continued innovation in how space is utilized and monetized," said MIT's Weikal. "In the future, you might have a space that maybe offers co-working during the day, becomes an event venue in the early evening and then turns into a hotel overnight."
With Latin American hotel brand Selina set to open a flagship outpost in New York this summer, complete with a coworking component, retail space and F&B venues, that future might have already arrived.