Airbnb’s effect on hotel sales growth [Summary]

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Date
2018-07
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Journal ISSN
Volume Title
Publisher
Virginia Tech
Abstract

Disruption of existing industries by peer-to-peer sharing economy platforms, like Airbnb, has received extensive media attention primarily regarding the regulatory and the social aspects of the sharing economy. In this paper, we examine the substitution and complementary effects of Airbnb supply on hotel sales performance patterns in San Francisco, the birthplace of Airbnb. Our results, based on a mixed-model analysis using a saturated, unstructured covariance matrix, show that overall hotel RevPAR is unrelated to total Airbnb supply. Interestingly however, in certain segments, RevPAR is affected by the average price of Airbnb listings. More importantly, hotel sales performance is impacted by Airbnb customer reviews, which points to nuanced and contextual complementary and substitution effects. We outline suggestions for future research as well as practical implications for hotel firms operating in similar markets where Airbnb has high penetration rates.

Description
Keywords
Sharing economy, Airbnb, Lodging, Sales, Performance, Disruptive, innovation
Citation