Is Airbnb a Legitimate Threat to the Hotel Industry?
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Less than a decade since its launch, Airbnb has already emerged as a significant threat to the hotel industry, according to a recent study from CBRE Hotels' Americas Research.
The advisory group, which specializes in providing research and consulting services to the hotel industry, found that travelers spent $2.4 billion on Airbnb rentals from October 2014 to September 2015. Although that figure represents less than two percent of the $141 billion hotels raked in over that period of time, it signals a notable rise when compared to the same period the previous year.
The study also found that a majority of the $2.4 billion (55 percent) was spent in five major U.S. cities: New York, Los Angeles, San Francisco, Miami and Boston.
READ MORE: Airbnb vs. Hotel: Which is Right For You?
Based on the Airbnb Competition Index developed by CBRE Hotels, New York's hotel market is at the greatest risk, followed by San Francisco, Miami, Oakland and Oahu.
"The fluid nature of Airbnb's supply suggests that traditional hotel's historic price premiums realized during peak demand periods will be mitigated," CBRE Hotels' senior managing director R. Mark Woodworth told USA Today.
CBRE Hotels' study comes on the heels of a study commissioned by the American Hotel & Lodging Association (AH&LA) suggesting Airbnb is profiting off of "illegal hotels."
The study found that Airbnb's revenue relies heavily on full-time hosts (renting out units 360 or more days out of the year) and that hosts renting out multiple units account for a significant portion of Airbnb's hosts. However Airbnb has disputed the study's findings.
"The overwhelming majority of Airbnb hosts are middle-class people who occasionally share the only home in which they live," a company spokesman said in an email to CNBC, calling the study "specious" and "intended to mislead and manipulate."
It's at least clear that the San Francisco-based company has captured the hotel industry's attention, confirming its status as a legitimate threat.
Choice Hotels International president and CEO Steve Joyce addressed the rise of Airbnb during last month's 2016 Americas Lodging Investment Summit.
"I take my hat off to them. They saw an opportunity the rest of us missed," said Joyce via USA Today.
As Airbnb continues to expand so will its target in the eyes of the hotel industry. The response to the growing threat will likely be greater efforts to push for government regulation, creating what AH&LA president and CEO Katherine Lugar calls a "level and legal playing field."
In the meantime, Airbnb will remain under intense scrutiny from the hotel industry.
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