Airbnb, a rapidly growing home and room rent-by-night site, is providing some stiff competition for hotels, and consumers could end up the winners.
Now boasting more than 1.5 million rental listings in 34,000 cities across the globe, Airbnb – short for Air Bed and Breakfast – could make up 1.2 percent of hotel offerings by the end of 2016, and up to 4.3 percent by 2020, MarketWatch reports.
Merrill Lynch analysts say that rapid growth, which is creating less demand for hotel rooms, could force hotels to drop their room prices to attract travelers.
“Our preliminary work suggests Airbnb is a force to be reckoned with that is likely to have an increasing impact on the travel landscape,” the analysts wrote.
Hotels in large U.S. cities, like New York, San Francisco, Los Angeles, Chicago, Austin and Seattle, are the most vulnerable to Airbnb, because that’s where the home renting site has the majority of its U.S. inventory, MarketWatch said.
In 2014, Merrill Lynch analysts said Airbnb had 40 million room nights reserved, totaling about $40 billion in gross bookings. That number is expected to increase to about 74 million bookings in 2015 and more than 100 million in 2016.
“The analysts estimate that 43 percent to 67 percent of Airbnb listings are competition for hotel rooms, as the others may be shared spaces,” MarketWatch said.
If you’re planning a trip and looking for ways to save on lodging, “10 Ways to Save Up to 60 Percent on a Hotel Stay” has some great tips.
Want to rent out your pad to travelers? Check out “15 Steps to Profit by Renting Your Home to Visitors.”
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