In Today’s world, there are more than 30 million people have used Airbnb to find a housing for their journey. Such newly raised mechanism makes the hospitality industry feel anxious, forcing some longstanding incumbent like Hilton, and Marriott to adjust or to suffer. However, some people think it’s not an immediate threat yet. They are saying the relationship between Airbnb and Hotel industry is like food trucks and restaurants. People who are willing to pay food at food truck are also willing to pay their meals at a cozy restaurant other days. Let’s talk a little bit more about this topic and see if Airbnb would influence hospitality industry.

Here is a study about the influence of Airbnb

As I delve more into this topic, I found a recent study about the competitiveness of Airbnb in hospitality market. Basically, it is saying that Airbnb is only nibbling a little bit at hotel industry rather than gulp it as a whole. In this study, researchers estimate Airbnb’s impact on hotel industry by comparing the change of total revenue before and after Airbnb kicked in, but the study have take the sample purely from Texas,which is a defect I will talk about later. By manipulate different equations of economic, the researchers provide empirical evidence which reject the null hypothesis that Airbnb is significantly changing the hospitality pattern. However, the result also suggests Airbnb could have some modest impact on the revenues of budget hotels. For example, in two years to December 2013, it cut the revenues of budget hotel by 5%.

My opinion about the study…

The study did great job estimating the impact of Airbnb on hospitality in Texas, but some future works are needed as well. First of all, the samples were purely selected from Texas. The local impact of Airbnb can’t be apply to other market where the supply and demand are different. a larger sample size could be a great contribution to the problem.

Secondly, the study avoid some competitor of Airbnb itself, like VRBO and HomeAway. A survey of sample size of 560 people indicates a fact 13% of respondents saying they have used other agent like Airbnb before. Such potential competitor might be one factor to hold back Airbnb’s growth.

My opinion…

From my perspective, I think Airbnb is a powerful competitor of hotel industry, simply Because it can do something that hotel can’t do. First of all, Airbnb housing is located at the place where real people live, thus it provides a social atmosphere, and a better way to know a new place. In addition, because the special location Airbnb require, it can created an additional housing where ever housing existed rather than building a whole construction in accordance with land sizing. In place like New York, one additional land would cause more than you image, thus the marginal cost would be higher. In market like New York, Airbnb become a compliment to the hotel a room rather than a substitute.

 Conclusion:

The article provides evidence the impact of Airbnb on the hotel industry is not significant. However, in a long term, challenges form Airbnb is potentially harmful to the operation of hotel incumbents. Turning to consumers, without hurting hotel industry, the existing of Airbnb benefits those who rent their properties and consumer who benefit from the lower price due to either Airbnb or Hotel competition with Airbnb. Such sharing economy is an interesting model. After knowing those facts, what’s your choice?

work cited.

http://time.com/money/2933937/sharing-economy-airbnb-uber-monkeyparking/

http://qz.com/551612/why-the-hotel-industry-isnt-afraid-of-airbnb-yet-explained-in-five-charts/

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2366898

https://atlas.qz.com/charts/Nkt2UNQQl