Depending on your perspective, Airbnb’s Summer Travel Report 2015 makes for exciting – or disquieting – reading. The home-sharing platform, launched just seven years ago by two cash-strapped 20-somethings, has passed a point of no return, expanding at a rate few onlookers could have envisaged.

Airbnb now maintains a presence in 191 countries and 34,000 cities around the world. It has hosted over 50 million guests in total, including 30 million in the past year alone, and registered nearly a million guests on one single, record-breaking day. Since 2010, summer travel with Airbnb has grown 353 times over.

For Airbnb’s users, this expansion is surely cause for celebration, moving a shadow supply of accommodation squarely into the mainstream.

"Where in the past you might stay with a friend, family or even on a random person’s couch on, non-traditional lodging options are now available in just about any country in the world on a single website," says Jamie Lane, a senior economist at PKFC. "The success of Airbnb has allowed hundreds of thousands of people around the world to become, in effect, innkeepers."

It is also a key player in what has been dubbed the ‘sharing economy’ – in essence, technology solutions for peer-to-peer buyers and sellers. Services of this kind are economically ingenious, quickly setting a rhythm in the dance between supply and demand. They have been routinely praised for their simplicity and functionality, and are bookable at the swipe of an app.

"With 74% of the Airbnb inventory located outside of the main hotel districts, it is possible to argue that it is targeting a different travel segment altogether." 

That said, while its cabby counterpart, Uber, has been described as ‘crushing’ the taxi industry, swiftly edging other players out of the market, Airbnb’s effects on the hotel industry have been rather more nuanced. CEO Brian Chesky is loath to call it a ‘disrupter’ brand, preferring to see it as a reversion to a far older mode of hospitality.

"I don’t think it’s a zero-sum game," he said at last year’s Aspen Ideas Festival. "I think for us to win, people don’t have to lose."

What the numbers say

For now, at least, the figures would suggest that hotels are in rude health. Within the US, the industry has enjoyed a bumper year, registering its highest ever levels of occupancy for the 12 months ending April 2015. Average daily rates are also forecast to reach their real (inflation adjusted) previous peak levels by the end of the year.

With 74% of the Airbnb inventory located outside of the main hotel districts, it is possible to argue that it is targeting a different travel segment altogether.

"Airbnb is opening up a new space for travel by unlocking local access to neighbourhoods around the world. At the same time, demand for traditional forms of travel is still on the up. This suggests that there is room for everyone, and both business models can peacefully coexist," a spokesperson tells Hotel Management International.

Not everyone, however, believes that this is the end of the story. Jamie Lane feels that the ramifications may be felt during the next cyclical downturn in the lodging industry. And according to Jan Freitag, senior vice-president of strategic development at STR Global, hoteliers can’t afford to be complacent.

"We talk about it at conferences and people are saying it’s on the fringes, it doesn’t really matter, it’s a bunch of millennials surfing couches, and I think the reality is very different," he says. "There are two options for Airbnb travellers – one is where you’re sharing a space and one is where you have the full unit to yourself. In my opinion, the shared bedrooms are not competing with the hotel because that’s not the same traveller. But the majority of the inventory is free-standing apartments, and those are absolutely 100% competing with standard hotel rooms."

Giorgos Zervas, an assistant professor of marketing at Boston University School of Management, conducted a study on Airbnb in Texas to estimate its effect on hotel revenue. He found that in certain areas, the overall impact was roughly 8-10%, with lower-priced hotels being the most vulnerable segment.

"The great thing about Airbnb is it can scale and compact very fast, and it explodes to certain changes in the market, so for instance when the Pope visits Philadelphia and many people want to go to the city, many people put their rooms up on Airbnb," he explains. "In cases like that, I would think hotels should be worried, because room prices go down during the same popular events and Airbnb now provides an alternative way to travel."

All travellers welcome

While most Airbnb customers still fall into the cost-conscious bracket, this could be poised to change. Since July 2014, Airbnb has made explicit attempts to court a different type of traveller, with the launch of ‘Business Travel’ on Airbnb. A tool for expenditure management, the service has recently been revamped in light of the rise in corporate clients.

To date, around 250 companies use Airbnb, including the likes of Google, Vox Media and SoundCloud. However, with US business travel expenditure poised to reach $302.7 billion by the end of the year, Airbnb wants to corner a bigger chunk of the market.

Perhaps unsurprisingly, established providers are beginning to kick back. While the party line in the industry has long been one of bullish unconcern, at this year’s summer conferences, a number of speakers expressed apprehensions. The question on their lips was whether Airbnb might actually be breaking the law.

"Airbnb has begun to collect occupancy taxes in many cities that are willing to work with Airbnb," says Jamie Lane. "On the other hand, many cities have enacted legislation to either curtail the growth of Airbnb or make it illegal altogether."

Here there are several issues at stake. First, the question of whether Airbnb should be subject to the same zoning laws and taxes as hotels, and if so, who should collect the taxes. Second, the question of security and accessibility – how can Airbnb be held to the appropriate safety standards and disability accommodations? Third, whether it is legal to rent out a specific condo or apartment, particularly in neighbourhoods where hotels per se have been banned.

"One point of contention beyond the usual issues of taxation and regulation, is the implications of potential investors buying residential real estate and running their business through an Airbnb system," says Cathy Enz, a Cornell professor. "If the purpose of a host-to-guest relationship is peer to peer, and hosts enter who are running commercial enterprises, the local and authentic connections may be reduced."

Sim city

According to Airbnb, a number of cities have taken an innovative approach to regulating their service. Some have gone one step further, with the UK Government keen to spotlight London as a beacon of the sharing economy. Still, the company is quick to acknowledge that this is a work in progress. As the sharing economy becomes ever harder to ignore, it seems clear that Airbnb and traditional hoteliers may benefit from revisiting their business models.

From the hotels’ side, Airbnb’s success serves to emphasise the appetite for ‘experiential’ travel. Often associated with younger travellers, this trend is perhaps more accurately pegged as a ‘millennial mindset’, that isn’t necessarily tied into age.

"Hotels can absolutely provide that – that’s what concierges were designed for," points out Freitag. "Hotels have to realise that their travellers want more experiences, and they have to cater to that, which I think they’re doing to some degree or another."

More intriguingly, Freitag suggests there may be scope for hotel brands and Airbnb to work together, with hotels in effect ‘disrupting the disrupter’.

"Business travellers are looking for certain assurances that the rooms are clean, that the Wi-Fi is working, that the water pressure is good, and that’s what the hotel brand stands for," he says. "Wouldn’t it be interesting if a hotel brand provided services to Airbnb units, so you could pick up the key in the hotel next door, and the hotel next door cleans the apartment? I’m very curious to see who’s going to be the first to scale that up, especially as Airbnb is targeting the business traveller."

"As the sharing economy becomes ever harder to ignore, it seems clear that Airbnb and traditional hoteliers may benefit from revisiting their business models." 

Early signs suggest the market may be heading in that direction. Recently, Hyatt invested in the London-based home rentals firm onefinestay, which, in a similar manner to Airbnb, matches travellers up with homeowners looking to rent their residences. Its pilot programme, now in full swing, has been touted as highlighting ‘the sharing economy collaboration to come’.

"Efforts to find a win-win are encouraging," says Cathy Enz. "If Airbnb enters more fully into the business-traveller space, it may become more of a threat, but working with a hotel loyalty programme may be a way to find cooperative relationships."

From Airbnb’s side, the dream of what’s to come sounds nothing short of utopian.

"Airbnb is pioneering a larger movement that is being powered by the connected world we live in. In the long term, we hope the sharing economy will continue to thrive as it continues to rapidly grow and change the world for the better," says the Airbnb spokesperson.

As this world-changing mission takes shape, how worried should hoteliers be? The answer seems to be, just worried enough. While Airbnb can no longer be ignored, for operators who keep an eye on the sharing economy, it’s as much an opportunity as a threat.