February 4, 2016
CBRE has issued a report, The Sharing Economy Checks In: An Analysis of Airbnb in the United States. It opens,
The sharing economy has become a prominent though not well understood economic phenomenon over the past several years. Airbnb is the market leader as it relates to the temporary accommodations industry. CBRE Hotels’ Americas Research compiled select information from STR, Inc. and Airdna, a company that provides data on Airbnb, for hundreds of U.S. markets to assess the relevancy of this sharing platform to the traditional hotel industry.
Airbnb’s presence in key markets throughout the U.S. is growing at a rapid pace, with users spending $2.4 billion on lodging in the U.S. over the past year, according to analysis from CBRE Hotels. Over the study period of October 2014 – September 2015, more than 55 percent of the $2.4 billion generated was captured in only five U.S. cities (New York, Los Angeles, San Francisco, Miami and Boston), represents a significant portion of the lodging revenues in these markets.
CBRE Hotels compiled select information for hundreds of U.S. markets to assess the relevancy of this sharing platform to the traditional hotel industry. From this data, the firm has developed an Airbnb Competition Index. This measure incorporates a comparison of Airbnb’s Average Daily Room rates (ADR) to traditional hotel ADR’s; the scale of the active Airbnb inventory in a market to the supply of traditional hotels, and the overall growth of active Airbnb supply in that market, into a measure of potential risk. New York was identified as the number one domestic market at risk from the growth of Airbnb, with an Airbnb Risk Index of 81.4, followed by San Francisco, Miami, Oakland and Oahu. (1)
What I find interesting about this is that Airbnb’s footprint is so hyperlocal. On a national level, just a handful of markets account for a majority of its revenues. But then, if you look at one of those individual markets, New York, just a handful of neighborhoods account for a majority of the revenue coming from that market. I cannot yet imagine what the hospitality sector will look like once the sharing economy fully saturates it, but it will surely be different that what it is today.