Airbnb does not cannibalize hotel demand in New York City.
At least that's one of the major findings of an analysis conducted by STR about
the sharing-economy provider.
STR found
that during 2015, Airbnb accounted for 5.5 percent of overall demand in
Manhattan. That figure is up from 4.4 percent in 2014, but still a fairly small
piece of the pie. During 2015, Manhattan hotels saw occupancy reach 87 percent,
which STR said suggests large amounts of unaccomodated demand, "some of
which could be accommodated by Airbnb units or by new hotel supply as it
continues to open in the market." The analysis did not track the rate at
which guests who search both hotel and Airbnb accommodations choose the latter.
Other
conclusions STR drew from its research of the Manhattan market included: Airbnb
supply accounts for one-tenth of total hotel supply; Airbnb does not undermine
hotel pricing power; Airbnb units account for 3.5 percent of all lodging
revenue (up from 2.8 percent in 2014); the majority of Airbnb guests stay 7 or
more nights; and with only a few daily exceptions, Airbnb occupancy ran well
below hotel occupancy.
"The
results did not show Airbnb’s growth to have a severe impact on hotel
performance, as many in the industry believe," said STR president and COO
Amanda Hite. "Continued analysis to understand the key performance
indicators of the hotel industry and other paid accommodations will be crucial
to further understand the operating environment."
Airbnb is the
favored scapegoat during discussions about New York City's poor hotel
performance. PKF Hospitality Research senior managing director Mark Woodworth
said in late October of New York City performance, "If it wasn't for
Airbnb we would be seeing rate growth much stronger than what we are seeing. I
can't prove that; it's only intuitive at this point, but it makes sense."
While most other U.S. cities saw
average daily rate increases in the mid-single digits in 2015, New York City saw
ADR decrease 1.6 percent, according to STR. Conditions in the market have been
so disappointing in the current cycle that STR lodging insights senior vice
president Jan Freitag has suggested they're partly to blame for Wall
Street's negative
outlook on the current health of the hotel industry.
The STR research, however, suggests
that Airbnb isn't necessarily to blame. During compression nights in 2015, in which
occupancy was 95 percent or higher, hoteliers were able to realize strong rate
premiums, while Airbnb achieved rate gains less than 4 percent for the same
time-period comparisons.
"There’s no way through these
data sets to infer how the proliferation of Airbnb units in the Manhattan
market might be influencing pricing decisions made by hotel operators of all price
scales," the report stated.
Though the analysis doesn't explain
what's causing poor New York City ADR performance if not Airbnb, it does mark a
step toward the research company being able to provide some analysis of Airbnb
data. Multiple executives at this year's Americas Lodging Investment Summit
called on STR to find a way to track Airbnb, referring to it as the
"shadow supply" and asserting that it skews current hotel data.
"We requested the data from
Airbnb to examine an important topic being discussed throughout the hotel industry,”
said STR president and COO Amanda Hite. “We wanted to compare data for both
sides to give hoteliers a true picture of Airbnb’s effect on the industry
because it is a dominant player in the shared-accommodations space."
To conduct the analysis, STR used internal data
provided by Airbnb for its operations in Manhattan. STR used comparable Airbnb
units—private rooms or entire homes—to compare daily hotel data and daily
Airbnb data between Dec. 1, 2013 and Nov. 30, 2015. The analysis did not examine
data from the other four boroughs of New York City.