Over the past eight years, AirBnB has had a steady, methodical, yet meteoric rise as a disrupting force in the hotel and lodging industry. Their power comes from their unprecedented utilization of technology in the industry.
Previous technological advances revolved around comparing the best prices of established hotel and motel chains in a given area, which is a great idea and extremely useful. However, that “advance” only enhances and entrenches the status quo of making these large hotel chains the optimal choice for travelers and tourists alike. It simply made it easier to continue on with the established routine of the industry: if you travel somewhere, you stay at a hotel, just like everybody else.
AirBnB’s business model is centered around a new type of technology: finding affordable rentals for travelers that isn’t a hotel, motel, or inn, but rather could be someone’s lived-in home, apartment, couch, or even treehouse. Instead of being able to search for the cheapest room, this new platform allows users to search for the type of place they want to stay in, as well as the price. No longer are travelers forced to choose between styles of hotel rooms. Now they can choose between renting an apartment, a home, a couch, or pretty much any other place one could live in.
AirBnB introduced this technology 8 years ago and it now has 60 million users, 640,000 hosts (the users who are renting out their living spaces and dwellings), and 2 million listings. The company is valued at $25 billion (according to expandedramblings.com), and yet it still hasn’t reached it’s critical mass. In fact, I would argue it’s still at the early adopter phase, since it has just begun to take off as an application and a company, rapidly expanding the past couple of years. At this rate, however, it could reach it’s worldwide adoption point in the next 5 or so years.
What all this means is that for the first time in about 100 years, there is a credible, equally easy to use option other than renting out a single room for a night when traveling. People have more options when traveling, not just in terms of where they will stay, but also in the price since AirBnB listings are often cheaper, or at least competitive, to hotel room prices. Yet, a study from Hotel News Now revealed that AirBnB penetration in a specific market – they use Texas in their study – finds that competition from other hotels and chains eats into a specific hotel’s revenue more than AirBnB does. What this shows is that AirBnB is not necessarily displacing hotels (yet), but rather, they’re giving people more incentive to travel and offering cheap options to those who may not have been able to do so before.
Although AirBnB listings haven’t taken much away from hotel revenues currently, the kicker is that the company is still expanding – and rapidly. According to BusinessInsider, the site has gone from 1 million users in 2012 to over 17 million in 2015 – just 3 years later. And there’s no sign of slowing down either as they continue to rake in funding and investments all over the world.
Today, AirBnB continues to expand with a brand new technology and concept in an industry that could really use competition. Most hotels are run by just a few large chains and control a majority of the industry. AirBnB on the other hand has begun to make traveling and lodging more exciting. in 2015, 10,000 people stayed in treehouses that they rented on the site and 13,000 stayed in castles all across the world. No longer do tourists and those on the road have to settle for the same old hotel room. Now they can stay somewhere just as exciting as the place they are visiting, living amongst the culture of their destination rather than viewing it from a standard hotel room.
Of course, it’s not for everyone and the technology has only begun to catch on. However, it has created a whole new class of renters and travelers who see their trip and where they stay as a single concept, rather than looking at the destination apart from where they’re forced to stay. AirBnB’s technology offers a unique choice in lodging, allowing both parties to express creativity and enjoy the experience of traveling so much more.