Airbnb room bookings to overtake hotel operators

Rapid growth expected over coming years, although unlikely to threaten corporate business

Operators, Airbnb, Investment, Online

The number of room bookings made through Airbnb could overtake even the largest hotel operators within the next two or three years, according to an investment analyst.

In a research note published by Barclays last week, Barclays European leisure analyst Vicki Stern pointed out that the number of rooms available on the room-sharing platform has already hit 1 million. This is more than the 687,000 rooms offered by IHG, the largest hotel company measured by rooms.

According to a report by Business Travel News, Stern’s note said Airbnb's current bookings are about 37 million room-nights per year, or a fifth of what IHG sold in 2014.

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However, its rate of growth means it could top IHG’s numbers within two or three years.

Another report on the note, by Quartz, says that by the end of 2016, Airbnb could hit 129 million room-nights per year. It also points out that Airbnb already represents up to 17.2% of hotel room supply in New York, 11.9% in Paris, and 10.4% in London.

One positive takeaway for the hotel industry is that Airbnb is likely to be dominated by leisure bookings, with business travel currently only accounting for 10% of bookings.

"There is currently no regulation applied to Airbnb hosts regarding fire safety, food hygiene and insurance," Stern writes in the note, titled Hotels: Is Airbnb a game-changer?.

"This is a key difference to hotels, which are required to adopt strict health and safety regulations, and this is one key reason why we believe the majority of business[es] would be reluctant to send employees to Airbnb accommodation instead of a hotel."

In October, it was predicted that Airbnb's valuation could soar to around US $13 billion if it goes ahead with plans for an employee stock sale.

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