Nowadays, when sleepy travelers pull off roads for a few hours of
much-needed rest do they seek out the first neon “vacancy” sign, or
simply knock on your front door? Thanks to “peer-to-peer”
or “sharing economy” platforms, like AirBnB, many welcome strangers
into their homes with open arms.

Whether you’re seeking a weekend in Vegas, or a unique experience, like
staying in a 19th century Ireland castle, AirBnb has you covered. This
San Fransisco based start-up jumped from a single location in 2008 to over
34,000 cities, in 191 countries around the world. With more than 2,000,000
listings worldwide, will the rise of
private accommodation such as AirBnB have an impact on hospitality job growth?

According to Bjorn
Hanson, Clinical Professor for the Jonathan M. Tisch Center for Hospitality
and Tourism at New York University, “This is a more challenging event in
the history of the lodging industry than almost any other.” How are
hotels reacting?

Some, like the French company AccorHotels, took the
“if you can’t beat it, join it” approach. They decided to dip into
the sharing economy by taking over Onefinestay,
a home-sharing service based out of London. According
to AccorHotels Deputy CEO, Vivek Bardinath:

We’ve looked at around 200 companies in 2015, We’re really interested in
this vertical; private rentals for high-end stays. Our clients are interested
in this vertical. And if we follow our clients’ needs then we’re sure we remain
relevant for them.

The acquisition cost the company approximately $170 million and they’re planning
on an additional $70 million investment.

Georgios Zervas (Questrom School of Business), Davide Proserpio and John W.
Byers (Computer Science Department) of Boston University conducted a survey estimating
the impact of AirBnb on the hotel industry. According to their research, they
“hypothesize that AirBnb has a measurable and quantifiable impact on hotel
revenue in affected areas.”

They go on to suggest that impact is mainly based on geographical locations,
specific hotel markets, and by season. Oddly enough, according to the study
(revised this year), some hotel chains still aren’t concerned with AirBnb,
believing it’s a “niche market” that has no direct impact on their business.
Should they be worried?

According to some in the Hospitality Industry,
the threat is imminent. The Hotel Association engaged HVS Consulting and
Valuation to conduct a study predicting the impact of AirBnb on hotel markets.
Their research revealed that hotels lose approximately $450 million in direct
revenues to AirBnb each year.

There were 480,000 hotels rooms reserved and more than 2.8 million AirBnb
bookings between September 2014 and August 2015. HVS predicts that by 2018
AirBnb reservation will jump to an unbelievable 5 million per year. How has
this devastating loss in revenue impacted hotel jobs?

The decrease in demand for hotel rooms lessens the need for hotel workers.
Over 2,800 jobs were diminished by Airbnb, a loss of more than $200 million in
income. As more and more guests choose not to book hotel rooms, revenue loss
continues to rise. Hotels lost more than $108 million in food and beverage
sales alone.

Hotels not only lose money on bookings, and food and beverage sales.
Additional earnings from charges for late fees, early check-outs, and business
center uses factor into a hotel’s profits. The tactics hotels resort to, to
compete with AirBnb, haven’t helped either. Many hotel chains lowered their
room prices to reclaim guests, which creates more loss in revenue. The average
hotel price now is 25% lower than the average price for an AirBnb stay.

The recent drop in revenue and decrease in hotel staffing shows a
significant impact on guest
service ratings as well. Other recent studies show hotel ratings dropped to
record lows, especially relating to employee engagement. One report revealed
that only 11% of hotel workers feel “their employers genuinely listen to
or care about employees.”

Policy changes, that are more company-based, that seem to ignore guest
happiness directly impacts hotel workers and lowers morale. Desk and
housekeeping staff are the first to hear guest complaints. With no authority or
resources to improve guest satisfaction, employees are left feeling incompetent
or losing faith in their employers.

Thanks for reading!