Introduction

Alternative accommodations, also known as short-term rentals, homeshares, or vacation rentals, aren’t a brand-new concept. But in recent years, they’ve become increasingly popular and ubiquitous throughout the U.S., thanks to new tech platforms such as Airbnb, HomeAway, and FlipKey.

While the growth of these platforms has enabled the alternative accommodations market to flourish not only in the U.S., but around the world, their popularity is also raising a number of questions: What kind of impact are these rentals having on local housing markets? How are the platforms addressing issues of discrimination? Are they competing head to head with hotels? What other services can, or will they, provide in the future? How should they be regulated to ensure the health and safety of the hosts and guests? Should they be paying taxes?

The complex issues and questions being raised by alternative accommodations providers are proof that these businesses are no longer in their infancy, or startup stages. As Airbnb, HomeAway, FlipKey, and others enter into adolescence, they’re being confronted with the reality that there’s much more involved in enabling people to belong anywhere or live like a local.

Full List of Figures

Profiling the Alternative Accommodations Loyalist

• Share of Total HomeAway Family Web Traffic
• Age Segmentation: Respondents Loyal to Alternative Accommodations Brands
• How many leisure trips do you take every year?
• Do you currently have any of the following messaging apps installed on your smartphone? Select all that apply.
• How likely are you to use a dating app to connect with locals while traveling, either on this trip or on other trips?
• How likely are you to post regular updates and pictures of your trip on social media?
• During this particular trip. Would you say that you use social media more often or less often than when you are at home?
• During your trip, have you used any of the following apps or websites to find restaurants and places to eat?
• During your trip, did you leave an online review of a restaurant or hotel?
• Back home, how often do you use ride sharing apps such as Uber or Lyft as a mode of transportation?
• During this particular trip, have you used any of the following ride sharing apps to “get around”?
• Do you currently use any of the following smartphone apps to pay for things either online or at physical stores?

Data Dive Into Pricing and Inventory

• Number of Alternative Accommodation Listings in the Top 5 US Counties
• Number of Alternative Accommodation Listings per Platform
• Number of Alternative Accommodation Listings per 1000 Inhabitants
• Type of Airbnb listings in the Top 5 US Alternative Accommodation Markets
• Median Age of the Current Alternative Accommodation Inventory per County
• Median Age of the Current Alternative Accommodation Inventory per Region
• Median Price of the Current Alternative Accommodation Inventory per County
• Median Price for Entire Apartments in the Alternative Accommodation Scene
• Share of Luxury Alternative Accommodation Inventory per Region
• Share of Luxury Alternative Accommodation Listings per County
• Share of Luxury Alternative Accommodation Listings per Platform

New York Pricing and Inventory Deep Dive

• Interactive Map: Concentration of Listings in New York
• Interactive Map: Median Price per County in New York

Rental Platform Web Traffic Analysis

• Overview Airbnb
• Traffic Share Airbnb
• Overview Villas.com
• Traffic Share Villas.com
• Overview HomeAway
• Traffic Share HomeAway

The Competitive Landscape

According to a UBS Sharing Economy Report, the U.S. shared accommodation market is expected to grow by 14 percent from 2015 to 2020, reaching an estimated $64 billion in value. Here in the U.S., the major players in this space are: Airbnb, HomeAway (owned by Expedia), VRBO (owned by Expedia), Couchsurfing, Homestay, Vacasa, and Flipkey (owned by TripAdvisor).

By far, the company with the most listings and global awareness is Airbnb, which was most recently valued at more $30 billion. Second to Airbnb is HomeAway, which Expedia bought for $3.9 billion (including VRBO) in December 2015. Since buying HomeAway, Expedia has gradually shifted its model to be more similar to that of Airbnb’s, by adding a booking fee for consumers.

While there are many players within the alternative accommodations space, Airbnb is by far the most recognizable and the one with the most listings, with approximately 550,000 listings in the U.S. in 2015, according to Airdna. Airbnb also welcomed 100 million guests this year, in its 8th year of business.

The Regulatory Climate

Not all cities in the U.S., or the world for that matter, are necessarily laying out a welcome mat for short-term rentals. Some cities, like Anaheim, Calif., and Berlin, are in the process of or have finished instituting an all-out ban on short-term rentals. Other cities, like Galveston, Texas, and Savannah, Ga., have very few restrictions on short-term rentals.

Airbnb and its peers are currently engaged in a number of regulatory battles not only in the U.S. but in municipalities around the world. In its efforts to more or less gain legal acceptance for short-term rentals, Airbnb and its peers have lobbied cities and mayors to legalize short-term rentals through the collection and remittance of local lodging taxes. But even in cities where Airbnb has formed tax collection agreements, such as San Francisco, the platform is facing stiffer regulatory restrictions and backlash from the hotel industry, affordable housing advocates, and local politicians and communities.

Perhaps one of the biggest problems for cities trying to establish proper short-term rental regulation that’s fair and common sense is the fact that much of the data about alternative accommodations can’t always be trusted, even when it comes from the sources themselves. Earlier this year, Airbnb admitted to removing some 1,500 listings from commercial hosts in New York City before publicly releasing data on its business in the city in December. The sites also do not make any efforts to police their own sites, or prohibit short-term rental listings that don’t conform to local laws.

In this report, we examine the state of alternative accommodations markets in the five following cities. Here’s brief update on the current regulatory climate for short-term rentals in those destinations.

Austin

On Feb. 23, the Austin City Council approved stricter regulations for short-term rentals in the Texas state capitol, which also serves as the headquarters for HomeAway. The newly revised ordinance awaits approval from the city’s mayor, city attorney, and city clerk. It applies to non-owner occupied residences, and would eventually take hold by 2022.

Los Angeles

The city of Los Angeles, which is one of Airbnb’s largest markets and will host the Airbnb Open, the company’s annual gathering for its hosts in November, is currently mulling instituting formal regulations for short-term rentals. In July, the city signed an agreement with Airbnb to collect and remit lodging taxes in the hopes of collecting at least $5 million annually. However, city officials were quick to point out the tax agreement didn’t exactly equate to legalization of short-term rentals. At the moment, the majority of short-term rental listings on Airbnb for Los Angeles would be considered illegal according to zoning laws. Hosts who rent out their homes on platforms like Airbnb are required to pay lodging taxes.

New legislation the city is considering would legalize short-term rentals for residents for up to 90 days a year, but requires Airbnb and its peers to supply the city with information about the hosts, their addresses, and the number of days they have rented their homes and for how much. Property landlords would also have to register with the city, and rent-controlled or designated affordable housing would be exempt from participating in short-term rentals. Hosts who fail to comply with the law would also be fined, as would websites that display listings that violate the new law. Sites that don’t provide data to the city would likewise be fined. The new law awaits approval from the Los Angeles City Council.

The way this legislation has been crafted, it’s doubtful, however, if the city will be able to enforce it in its entirety. Platforms like Airbnb and HomeAway have successfully used the Federal Communications Decency Act (CDA) to their advantage in fending off fines or legal liability for the actions of their hosts and guests. The CDA essentially says that online platforms are not legally responsible for the actions of their users. It was recently invoked by Airbnb in its lawsuit against the city of Anaheim, Calif., which also attempted to fine Airbnb and its peers for advertising illegal listings on their sites. Anaheim has since removed that part of their new short-term rental law, and Airbnb subsequently dropped its lawsuit.

Miami

Another one of Airbnb’s top five markets, Miami has a complicated regulation structure for short-term rentals. In Miami Beach, city code allows short-term rentals (those for less than six months and one day) only in certain zoning districts, and not at all in single-family homes. Violation of this law entails steep fines that start at $20,000 for a first-time violation. From March to mid-August 2016, the city collected fines of up to $1.59 million in 106 cases. In 42 of those cases, platforms like Airbnb, HomeAway, and Booking.com were also fined, although it’s not clear whether those fines against the sites will hold up in a court of law, especially given what’s happened in Anaheim (see above).

New York City

Airbnb’s relationship with the city of New York has been rocky from the start for a number of reasons. In New York, opponents of Airbnb not only include hotel industry lobbyists but affordable housing advocates and hotel unions, as well. As it stands now, the majority of its listings in New York City (54 percent according to Airbnb’s own data) might be considered illegal because they are for entire homes/apartments and are being rented for less than 30 days, which is a violation of the city’s 2010 Multiple Dwelling Law. If Governor Cuomo signs a new short-term rental law, the city will begin to fine those hosts who use Airbnb and its peers to advertise illegal listings on those sites, with fines ranging from $1,000 to $7,500.

San Francisco

Airbnb’s hometown, while initially welcoming the company with open arms, has since seen its relationship with the company sour. Since approving the so-called “Airbnb law” in October 2014, the city has faced a number of challenges in getting Airbnb’s hosts — and Airbnb itself — to abide by the very laws with which the company worked with the city to put into law.

In February 2015, short-term residential rentals in San Francisco were legalized for permanent residents in their permanent residence (occupying a residential unit for at least 60 consecutive days). These residents can rent out their residences on a short-term basis, un-hosted (host is not present), for a maximum of 90 nights per year. There is no limit to the number of nights a resident can rent out a room or portion of their home for hosted stays (when the host is present). All short-term rental hosts, however, must obtain a business registration certificate prior to registering with the city’s Office of Short-Term Rentals (OSTR), and they also have to maintain liability insurance and provide a quarterly report to the OSTR on the number of nights their unit is rented, among other obligations.

Last November, a proposition that would have enforced tighter restrictions on short-term rentals to 75 nights per year, as well as other enforcement tools, was on the ballot, but it was defeated and not implemented. Following the release of a report from the OSTR in April, which showed that nearly 80 percent of Airbnb hosts in the city have not yet registered with the OSTR, the city’s Board of Supervisors passed a new law that would hold platforms like Airbnb responsible for advertising listings from hosts who aren’t registered with the city.

Airbnb responded with a lawsuit, and the Board of Supervisors has since revised the amendment so that the OSTR can subpoena records from Airbnb and its peers when it finds possible violations from hosts.

The Impact on Hotels and Housing

What kind of an impact is Airbnb and its peers having on traditional hotels? That’s a billion-dollar question on the minds of many in the hospitality industry. While most data suggests Airbnb is having a relatively minimal impact on hotels, it also notes that Airbnb’s impact varies by market. In a mature city like New York City, for example, Airbnb has one listing for every five hotel rooms in the city, and the city generates the most revenue for the company than any other city in the U.S.

Most hospitality executives believe that there’s room for both alternative accommodations providers and traditional hotels to more or less coexist with one another, although those same executives have also been asking for stricter regulations and a “more fair playing field” when it comes to short-term rentals.

One area where Airbnb, HomeAway, and others do seem to be having somewhat of an impact on hotel business, however, relates to compression nights, or high-demand nights where market-wide occupancy levels are 95 percent or more. A recent report from Morgan Stanley Research suggested alternative accommodations providers may have had something to do with the 24 percent drop in compression nights for 2016 from 2015 because of their flexible supply. Rooms can be made available to meet demand much more quickly via Airbnb or HomeAway than you can build a hotel, and the recent Rio Olympics were a prime example; Olympic organizers designated Airbnb as the Games’ official alternative accommodations provider and Airbnb hosted some 66,000 visitors. Researchers at Boston University found that hotel rates during the annual South by Southwest festival declined as Airbnb’s popularity grew, even though attendance for the event has grown over time.

Not only is the hotel industry concerned about Airbnb’s impact but so are housing advocates and, even U.S. senators. In July, California Senator Dianne Feinstein, Hawaii Senator Brian Schatz, and Massachusetts Senator Elizabeth Warren penned a letter to the Federal Trade Commission Chairwoman Edith Ramirez, asking the FTC to “study and quantify” commercial activity on Airbnb, HomeAway Inc., VRBO, and other short-term rental providers. The letter said this type of professional activity is adding to housing shortages and driving up prices for homes and apartments.

Airbnb and its peers’ impact on housing markets is most pronounced in cities like New York and San Francisco that have large populations and limited housing units. A June report commissioned and paid for by the Housing Conservation Coordinators and MFY Legal Services showed a direct impact on access to affordable housing in New York City, for example.

This report said more than 55 percent (28,765 listings out of 51,397) of Airbnb NYC listings in 2015 violate the state’s short-term housing law (for entire apartment/home listings) and were rented for more than a third of a year. And for each of the top 20 neighborhoods for Airbnb listings in Manhattan and Brooklyn, average rent increases have nearly doubled the citywide average from 2011 to 2015. In 2015, the report estimates the city also lost more than 8,000 housing units to Airbnb, reducing access to affordable housing in the city by 10 percent.

Addressing Issues of Discrimination

As much as Airbnb is admired for its trust- and review-based platform, that same platform has been plagued with charges of discrimination, bias, and prejudice early on, especially because there’s the potential for both hosts and guests to discriminate against one another simply based on their names and appearances.

As far back as 2014, researchers at Harvard Business School noted the possibility of racial discrimination against hosts by guests using the platform. Their study found that hosts who were not African American could charge 12 percent more, on average, with everything else being equal.

More recently, those same researchers discovered that Airbnb guests who had African American-sounding names had a much more difficult time being approved by hosts for reservations than those guests with more white-sounding names, even when all of their other information and messaging was exactly the same.

Charges of discrimination on Airbnb finally reached a boiling point earlier this year, spawning an entire movement behind the hashtag #AirbnbWhileBlack, and other platforms designed to be more inclusive of African American travelers (Noirbnb, Innclusive). A Virginia man also filed a civil-rights lawsuit against the company in May for allegedly being discriminated against by a host because he is black.

In July, Airbnb CEO Brian Chesky said fighting discrimination is the company’s biggest challenge to date and to address the issue, the company has enlisted former U.S. Attorney General Eric Holder and Laura Murphy, former head of the American Civil Liberties Union’s Washington, D.C. legislative office as advisors to craft a better policy for the company. Airbnb is also looking at other ways for it to combat discrimination, bias, and prejudice on its platform.

The Evolution of Alternative Accommodations

In addition to dealing with challenges related to regulation, hotel interest, housing advocates, and discrimination, however, many alternative accommodations providers, especially Airbnb, are experimenting with new products and services that extend well beyond just offering someone a place to stay.

Most recently, Airbnb debuted its newest initiative, a design studio, Samara, which it states is geared to explore “new attitudes towards sharing and trust.” While most media outlets have described Samara’s first offshoot, Yoshino Cedar House, as Airbnb’s “foray into urban planning,” or a hotel, Airbnb, was quick to point out that the facility is not a hotel.

Samara the design studio, however, is the latest signal that Airbnb is interested in diversifying its products and exploring new categories or industries to disrupt.

There’s been talk of Airbnb launching “Magical Trips,” or curated experiences, for guests to book later this year. It is also testing a City Hosts program where its hosts act as personal tour guides. This summer, the company tested hotel-style amenities and packages with a Sonoma Select pilot program in California.

Other reports have hinted that Airbnb is also trying to convince homebuilders to build extra rooms in houses and condominiums with the purpose of setting them aside specifically for short-term stays. There’s talk Airbnb might even go into the home insurance or home financing businesses as well.

There have also been articles noting Airbnb has approached some of the biggest apartment owners in the U.S. about forming a revenue-sharing model in which landlords would be encouraged to rent their units on Airbnb, as opposed to renting them to residents.

 The Alternative Accommodation Ecosystem

The broader alternative accommodations ecosystem extends far beyond the mainstream consumer facing platforms. Just like for traditional hotel establishments there are a multitude of support services and apps now available for the alternative accommodation sector.

Typical travel products such as Aggregators, Global Distribution Systems, Property Management Systems, Meta-Search, and Pricing systems are not limited to hotels and flights anymore. In fact, they already have a strong presence and acceptance in the alternative accommodation market.

The business facing platforms for the alternative accommodation sector have also extended into new directions. Services such as concierges, also known as rental managers, take care of all the steps involved in the process of renting: listing, pricing, cleaning and laundry, key delivery, and the whole booking and scheduling process. Tech-enabled rental management, make use of technology to facilitate the management of alternative listings, through the use of smart locks and remote support.

GDSs, PMSs, meta-search and pricing systems are optimized for the alternative accommodation market and offer tailored services depending on the type and location of the rental listing. GDSs such as BookingPal, integrate with PMSs and then distribute through a multitude of alternative accommodation sites. Services such as Safely even provide short-term rental hosts with background checks on guests as well as insurance for homeowners and property managers.

As Airbnb and similar platforms have entered increasingly into the mainstream, the profile of the typical alternative accommodations renter has also shifted. Here it’s important to distinguish between users of Airbnb and similar platforms that provide shared accommodations – e.g. private rooms in homes otherwise shared by the owner or other guests; and vacation rental platforms such as HomeAway that have historically focused on beach destinations and completely private, non-owner-occupied properties.

The big competitive battleground now playing out between Airbnb and HomeAway largely rests on the premise that Airbnb inventory allows for shared accommodations, while HomeAway does not. HomeAway’s tagline “upgrade to a whole vacation” clearly caters to a more mature travel audience unwilling or uninterested in sharing their travel accommodations with hosts or other travelers.

The reality is that while HomeAway may not allow hosts to rent out individual rooms, it does allow for owner-occupied properties –  not just second homes. This further diminishes the distinction between Airbnb and HomeAway as an alternative accommodations rental site, at least in terms of quality and inventory profile. Web traffic to the HomeAway family of brands is also significantly fragmented at the global level.

Note: Share calculated based on total visits between June – August 2016

Profiling the Alternative Accommodation Loyalist

In a recent Skift survey targeting US adults who were traveling at the time of the survey, we queried respondents about their attitudes toward alternative accommodations as well as loyalties towards alternative accommodations brands such as Airbnb and HomeAway.

The majority of respondents who stated to be loyal to the alternative accommodation scene fell between the ages of 25-34, also identifying themselves as frequent travelers. Fifty percent stated that they partake in more than 4 trips a year – 87% in more than two trips per year.

Users loyal to Alternative Accommodation services, were more likely to take a higher amount of leisure trips a year. They also positioned themselves in a higher income bracket, which justifies the higher number of trips.

When looking at mobile and social behavior of our alternative accommodation loyal respondents, we found that they were regular users of both. Every respondent stated that they use social media regularly, and 70% engaged with social media at least three times per day.

Of users loyal to at least one alternative accommodation platform, 87% had a dating app installed on their smartphone, compared to just 25% of those who weren’t. And they were far more likely to use such an app, to connect with locals whilst on their trip.

Alternative loyals also used their social networks intensively during their trips. 87% stated that they were very likely to post updates of their trip on their social media, and the majority of loyals stated that their use of social media was much higher during their trips than usual.

Not only did they create more content on social media, but they also made most use of user-generated-content, and were more likely to create new user-generated-content, in form of reviews, than those who were not loyal to an alternative accommodation site.

Alternative accommodations loyalists also tended to be heavy users of mobile tech. Nine out of 10 had Uber installed on their smartphone, while 5 out of 10 had Lyft installed.

99% had a payment app such as Apple Pay, Samsung Pay, Google Wallet installed on their phone, and 93% stated that they use it often.

 

Data Dive – A closer Look at Five Urban Markets

Our Data Partner

Transparent is a data intelligence company that builds and maintains data analytics products for companies seeking a better understanding of the short term rental industry.

In this section we take a deeper dive into five key alternative accommodations markets within the U.S. Transparent, provided detailed inventory and pricing data across the top three alternative accommodation platforms including Airbnb, HomeAway, and Booking.com. We compare and contrast the data on a regional and metro level, and introduce variables such as relative density to put the data into perspective. We analyze the inventory composition throughout the various cities and also draw a picture of the luxury segment of alternative accommodations. Data used in this analysis was pulled on August 10th 2016.

Total Inventory

Data collected by Transparent was pulled on August 10th, 2016 and contained listings from Airbnb.com, Villas.com, Homeaway.com for five U.S. Markets: Austin, Los Angeles, Miami, New York, and San Francisco. In total, we analyzed 132,053 listings across all platforms and regions. Whenever possible, we looked at county-level data to reflect inventory profiles of those areas most frequented by tourists.

Los Angeles is by far the county with the most overall listings – 30,315 in total. Followed by New York County with 22,645 and Miami-Dade County with 15,564 listings.

Note: Unless otherwise stated, total figures may include duplicate listings across the three platforms analyzed.

When we look at listings broken down by platform, we find that Airbnb represents the vast majority of listings in each county, dominating the market in all counties. Homeaway still maintains a significantly higher presence in the alternative accommodation scene than Booking’s Villas.com.

 

While Los Angeles has the highest total number of listings, New York County, which represents the borough of Manhattan, has the highest relative density with just short of 14 listing’s per 1,000 inhabitants. San Francisco County claims second place at 10.7 per 1,000 inhabitants.

Inventory Composition

For Airbnb, which offers entire apartments as well as private rooms, we find a similar composition across all counties in terms of relative share of listing type. Entire Home listings are consistently the most common listing type (62%), followed by Private Rooms (34%), and a small percentage of Shared Rooms (4%).

The composition of listings via bedrooms, is fairly consistent across all five counties. One-bedroom listings usually represent more than half of the total listings, with the exception of Travis county in Austin. Perhaps not surprisingly, the inventory stock in more densely populated metro areas tends to have few numbers of bedrooms.

Airbnb has the youngest inventory among the three platforms, with an overall median age per listing of 379 days, compared to 427 for Homeaway, and 395 of Booking.com’s Villas.com. Only in New York and San Francisco, Airbnb had the most mature inventory of all three platforms.

The regional level again, shares most attributes with the county one. The major variation being in Austin, where the median age of a Booking.com listing rises up to 759 days, just over 2 years.

Median Listing Price

Median price per listing varies significantly depending on platform. Airbnb tends to have cheaper rates overall, but shared accommodations tend to skew the data. A closer comparison of rates for entire apartments shows that the median rate fluctuates between the lower and upper $200.00 range across all four counties.

San Francisco listings on Airbnb were the most expensive among the five regions examined.

Luxury Listings

We’ve often heard the story of Brian Chesky and Joe Gebbia who couldn’t afford their rent in San Fracisco and launched AirBedAndBreakfast.com, a website to list their spare room on. There is no doubt that the alternative accommodation market started out as a cheap alternative to hotels. However, there is also no doubt that ever since AirBedAndBreakfast the market has vastly branched out into various segments and niches. While specific websites for the luxury segment of alternative accommodation exist, we take a look at the inventory on mainstream platforms to explore their offerings in the luxury segment. We consider listings with a daily rate above $1,000.00, to be luxury.

On a regional level, Los Angeles is far ahead in luxury listings, with a total of 1,423 listings across all platforms. Miami ranks in second with 726, followed by Austin, 659, and New York, 633. San Francisco ranks in 5^th with 337.

The regional trend is persistent in the counties, with some minor variances. Whilst New York and San Francisco are among the most expensive counties, they both have the fewest amount of luxury listings.

 

Although Airbnb is often thought of as the ‘cheap alternative to hotels’, among alternative accommodation sites Airbnb carried most luxury listings.

New York Deep Dive

New York has 49,505 alternative accommodation listings on a regional level, 87% of which are listed on Airbnb. When narrowing our focus on New York County, Kings County, and Queens County the number of listings takes just a small decline to 41,716. In this section we look at the concentration of listings throughout the Metro area, and we also look at the median price based on Zip Codes, which allows for deeper insight into the pricing situation throughout New York areas.

Concentration of Listings in New York

In New York the vast majority of listings are concentrated within the borough of Manhattan, which also sees the highest prices per listings.

Median Price in New York

 

An analysis of web traffic

Airbnb has 62 million monthly visits with about two-thirds of traffic coming from Desktop. The average visit duration was of of 8:13 minutes, and typically 14.59 pages were viewed per visit. Airbnb also leads both in direct and organic search traffic, 40.57% of traffic originated through direct hits and 23.0% from organic search.

 

Booking’s Villas.com has 1.67 million monthly visits, with an average visit duration of 4:45 minutes, and typically 5.97 pages viewed per visit. Villas.com was by far the platform gaining most traffic from Paid Search, in fact it was the main traffic source overall for the platform.

 

Homeaway has 13.43 million monthly visits, with an average visit duration of 4:25 minutes, and typically 5.9 pages viewed per visit. Homeaway also had the highest bounce rate of all three platforms at around 51%, compared to the other two which had a rate around 35%.

The platform also has a very organic traffic through direct traffic, referrals, and organic search; which together represent 80.45% of the platform’s total traffic.

 

Conclusions and Takeaways

• Many of the issues impacting the alternative accommodations industry are being tackled at the local level. Local tax authorities, planning boards, housing commissions, and hotel lobbies recognize the rise of this new product of accommodations as a disruption if not threat to the status quo. As the poster child for the sharing economy, Airbnb has taken the brunt of the criticism from these local groups.

• Airbnb and the HomeAway family are the two front-running brands in the U.S.. Within the span of six short years, Airbnb has managed to gain a significant lead against established players including HomeAway and sister brand VRBO. This battle will wage forward on two fronts: On product and brand. Airbnb’s first-mover advantage focused on building owner-occupied properties gave it the supercharged boost it needed to push traditional players into the rear-view. HomeAway and others will need to catch up, while not deviating too much away from their original business model focused on the vacation rental owner.

• The lack of uniformity in inventory and pricing makes the alternative accommodations market difficult to track and predict. Supply (at least the majority of it) is ultimately controlled at the individual owner level. This will make it difficult for traditional hotel groups to compete with the likes of Airbnb. Having up-to-the minute data on pricing and inventory trends will become more important.

 

Endnotes and Further Reading