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www.bu.edu/bhr Published by the Boston University School of Hospitality Administration

Airbnb and the Hotel Industry: The Past, Present,

and Future of Sales, Marketing, Branding, and

Revenue Management

By Makarand Mody and Monica Gomez

Fall 2018

© Copyright 2018 by Boston University

pg. 1

By Makarand Mody and Monica Gomez

For a long time, the hotel industry did not consider Airbnb a threat. Both the industry and Airbnb claimed they were serving different markets and had different underlying business models. Over the years, as Airbnb become more successful and grown to being larger than the companies in the hotel industry, the rhetoric has changed. The hotel industry began to realize they had something to worry about. A stage of denial was followed by the American Hotel & Lodging Association (AH&LA) attacking Airbnb by sponsoring research to demonstrate its negative impacts on the economy and lobbying governments to impose taxes and regulations on homesharing. The association is arguing for a level playing field between homesharing and hotels (and rightly so). The next stage of this battle involves competition and integration. Not only are hotels looking to add homesharing-like attributes and experiences to their properties, to more effectively compete with Airbnb, but are also looking to tap into the platform-based business pg. 2 The Past: How does Airbnb impact the hotel industry? economically. A recent study by Dogru, Mody, and Suess (2018) found that a 1% growth in Airbnb supply across 10 key hotel markets in the U.S. between 2008 and 2017 caused hotel RevPAR to decease 0.02% across all segments. While these numbers may not appear substantial at first, given that Airbnb supply grew by over 100% year-on-

The hotel industrys response: classic pattern of

disruption

Airbnb's competition with

traditional hotels is overstated, as it serves a different segment of travelers Brian Chesky, CEO,

Airbnb

No, there not a threat. We

serve different market Hotel CEOs

We want a level

playing field quotesdbs_dbs3.pdfusesText_6