Opinion And Analysis

Experts say Airbnb hotel model may be starting to show cracks

By Gordana Davila 0 Comments NEWS, Opinion And Analysis

A recent article in the Australian Financial Review has focused on the beginnings of Airbnb's tarnishing luster. Experts are saying that Airbnb's accommodation model is starting to weaken; they have noticed that the company is no longer as affordable, it lacks a single streamlined operating model for thousands of Airbnb landlords, has safety issues and it's being targeted by mainstream hotels which are looking to stunt the growth of the short-term rental industry, as well as competing against Airbnb by also entering the "shared community" space.

"You will see hotels come back to fill that space, because there are problems in the [Airbnb] space, especially in the way they are being provided," Dream Hotels Group managing director Kevin Wallace told the HotelsWorld 2017 conference in Sydney on Tuesday.

Wallace brought up the point that, like Uber's rogue drivers, Airbnb may have unreported rogue landlords "...a lot of corporates are disallowing people from using Airbnb due to personal and fire safety. How are you going to police all these landlords? That's a big potential issue, as well as quality and safety issues," he added.

Mainstream hotels are looking to gain back their market share by combining safe, traditional hotel services with 'local experiences,' and this may consequently hurt Airbnb. In Australia, the largest hotel operator AccorHotels is planning to open several lifestyle hotels looking to appeal to guests who want to experience the local flavor.

Smaller hotel groups like Veriu have also started "authentic local experience hotels" with explorer bicycles, such as Sydney's Veriu Broadway which is built out of a former tannery. Even cheaper hotel groups like youth hostels are beating Airbnb on price.

Experts have predicted the rise and/or fall of many-a-company, but truth be told, only time will be able to tell, whether the sudden influx of mainstream and boutique hotels into the niche "sharing market" will actually take a bite large enough out of Airbnb's "pie" to actually wound the company.

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