This first chart looks at the change in expenditures for the home-sharing and hotel segments . As you can see , hotel category spending has been relatively flat compared to strong year-over-year growth for the home-sharing segment .
This second chart looks at number of transactions . Here , you can see that the total number of transactions for the hotel segment is flat or in a slight decline . On the other hand , the growth of homesharing transactions is remarkably strong .
This third chart looks at the ratio of the hotel to home sharing categories for both expenditures and transactions , revealing that the gap between the two segments is narrowing .
As Jason Gaughan , credit card executive at Bank of America , notes regarding these four charts along with other data at his disposal , “ Like other sharing economy services , home sharing continues to consistently experience high growth . As more consumers try out this new lodging option , we would expect this trend to continue .”
We cannot yet distinguish between the impact that home-sharing businesses are having on leisure versus business or group segments based on these statistics alone , but the general trend lines are clear . Alternate lodging providers are taking business from regular hotels , and even though they may only currently represent upwards of 10 percent of the total accommodations expenditures , this alone may be enough to erode a property ’ s margins and force drastic cost-savings measures .
Moreover , these charts debunk the often-cited argument against the deleterious effects on hotels whereby home sharing opens travel to totally new customers who wouldn ’ t be inclined to do so otherwise . By showing that , at the very least , a portion of the revenue for alternate lodgings is coming at the expense of hotels , it is now abundantly clear that this ‘ new traveler ’ hypothesis doesn ’ t hold water .
In essence , though , these charts are only putting numbers behind what many hoteliers already know . The next step is figuring out a solution . Without getting into specifics , the answer is innovation . If these home-sharing numbers continue to trend upward and chew away at hotels ’ foothold on the hospitality marketplace , we are going to need to be leaner and meaner – with better guest service , improved amenities , greater technological integration and more efficient operations – if we are to stay afloat .
Finally , if we consider home-sharing plus hotels combined into a single ‘ accommodations market ,’ the data translates to the following market shares for the home-sharing subcategory . As you can see , the share of spending has moved up to non-negligible amounts .
Larry Mogelonsky
Article also published in Today ’ s Hotelier todayshotelier . com www . TIBOmagazine . com
TIBO Magazine - Volume 003 | 7