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Airbnb, a digital marketplace enabling travelers to rent and share private accommodations, has put a dent in the leisure travel industry, taking share at the low end from independent lodging properties. Now, a small but growing amount of business travel spending is shifting to Airbnb—a trend that, if it takes hold, could pose a threat to the broad hotel business, according to a new eMarketer report, “Airbnb and Business Travelers: Gauging the Impact on the Hotel Market.”
The impact of Airbnb is limited today because the service is often used as an inexpensive lodging alternative by younger travelers. Longer term, the threat could be substantial if these young leisure travelers continue to tap Airbnb once they become regular business travelers.
Airbnb represents a rapidly growing niche of the accommodations market. According to a report by GlobalWebIndex, 8% of internet users in North America and 14% worldwide had rented rooms or apartments through a home and lodging rentals service in Q1 2014.
Though US business travel use of Airbnb is currently a small portion of the more than $280 billion in spending forecast for 2014, expenditure is on the rise, driven by unmanaged business travelers and forward-thinking corporate travel departments. Mike Hilton, executive vice president at Concur, a company that processes $50 billion worth of corporate expense reports a year, told the San Francisco Chronicle that use of Airbnb had quadrupled every year since 2010, with the company expected to process $1 million of Airbnb expenses in Q1 2014. Michael Tangney, global travel manager at Google, told attendees at the 2014 PhoCusWright Europe conference that the company’s employees had spent $2 million on Airbnb rentals last year.
As millennial travelers dictate an ever-larger proportion of business spending, Airbnb corporate adoption is likely to become a mainstream behavior. In a November 2012 survey by JWTIntelligence, more than half of millennials (those ages 18 to 34) said they would use a peer-to-peer service like Airbnb—a far higher percentage than Generation X and baby boomers.
“Once millennials, who today use Airbnb for leisure travel, move up in their companies to positions that can dictate travel policy, Airbnb is on its way to being a legitimate accommodations choice for Fortune 1,000 corporations,” said Jan Freitag, senior vice president of strategic development at accommodations data company STR, in an April 2014 guest post for HotelNewsNow.com.
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