Airbnb's impact on hotel pricing, occupancy inconclusive, study says

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Airbnb has caught up with Marriott International, the world's largest hotel company, in terms of comparable available lodging units, but the peer-to-peer accommodations service's lower occupancy and price point has prevented it from materially hindering hotel-room demand, hospitality research firm STR said in a report it released Thursday.

For the 12 months ended July 2016, Airbnb's occupancy for the 13 global markets the company provided data to STR was about 46%, compared to 78% for hotels, according to the report. Average nightly pricing at Airbnb's units was about $158, or about $20 less than hotel-room rates.

Additionally, only about 10% of Airbnb's demand was from business customers, indicating that Airbnb's peak days (weekends) differed from that of hotels (mid-week), and that the two accommodations sources often served different markets. And while the number of Airbnb units continues to grow, they continue to account for a relatively small percentage of accommodations units, ranging among those cities tracked from about 2% to 3% in markets such as Washington, Seattle and Boston, to 9% in Miami and London.

As a result, the number of so-called "compression nights," where hotel occupancy in the seven U.S. markets in which Airbnb provided STR data exceeded 95%, was little-changed between 2014 and 2016 despite Airbnb's rapid growth. Additionally, on those compression nights, hotels were able to boost room rates last year by 35% relative to other nights, or the same price premium as in 2015.

"It's clear Airbnb is a force in the travel industry," wrote the STR report's authors. "While that much is certain, less so is the direct impact that Airbnb has on hotel demand. So many factors are at play -- supply growth, macroeconomic headwinds, disruptive technology and new entrants to the accommodations space -- which makes isolating causality between any one or two a challenging pursuit."

STR used data Airbnb supplied on its hosts' accommodations in 13 global markets, including Boston, Los Angeles, Miami, New Orleans, San Francisco, Seattle and Washington, as well as Barcelona, London, Mexico City, Paris, Sydney and Tokyo. The data covered the 32 months ended July 2016. Airbnb didn't provide any funding for the report.

STR says Airbnb's impact on hotel demand has been inconclusive despite Airbnb's rapid growth in both host supply and guest demand in recent years. Factoring out non-comparable units -- i.e. shared homes and rooms, listings that accommodate more than seven people or units taken off the market -- Airbnb accounted for 1 million home-based units that STR deems comparable to hotel rooms, as of November. By comparison, Marriott, which acquired Starwood Hotels & Resorts last year, oversees 1.1 million rooms, while Hilton Worldwide and InterContinental Hotels Group (IHG) accounted for 774,000 rooms and 717,000 rooms, respectively.

Of the 13 markets tracked, Airbnb's slowest growth for the year ended July 2016 in terms of unit supply was Barcelona, at 13%, followed by San Francisco, at 32%. Mexico City's Airbnb supply more than doubled, while Tokyo's more than tripled. Of the 13 markets, Airbnb's supply growth outpaced demand growth in only three -- Paris, Tokyo and San Francisco.

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