Industry Update
Editorial Article11 March 2015

The Rise of the Sharing Economy: Estimating the Impact of Airbnb on the Hotel Industry

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The Rise of the Sharing Economy: Estimating the Impact of Airbnb on the Hotel Industry

According to a recent report from Boston University, a 10% increase in Airbnb supply results in a 0.35% decrease in hotel room revenue, which translates into a 13% impact on revenue in Austin, Texas, which is home to the highest Airbnb supply. The report's authors -- Georgios Zervas, Davide Proserpio and John W. Byers -- also found that lower-priced hotels and hotels that don't cater to business travel are the most affected by Airbnb. As a result of these impacts, the researchers found, hotels are reducing prices in an effort to stay competitive. "Our work provides empirical evidence that the sharing economy is making inroads by successfully competing with, and acquiring market share from, incumbent firms," the report reads.

According to a recent report from Boston University, a 10% increase in Airbnb supply results in a 0.35% decrease in hotel room revenue, which translates into a 13% impact on revenue in Austin, Texas, which is home to the highest Airbnb supply. The report's authors -- Georgios Zervas, Davide Proserpio and John W. Byers -- also found that lower-priced hotels and hotels that don't cater to business travel are the most affected by Airbnb. As a result of these impacts, the researchers found, hotels are reducing prices in an effort to stay competitive. "Our work provides empirical evidence that the sharing economy is making inroads by successfully competing with, and acquiring market share from, incumbent firms," the report reads.

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11 March 2015 — According to a recent report from Boston University, a 10% increase in Airbnb supply results in a 0.35% decrease in hotel room revenue, which translates into a 13% impact on revenue in Austin, Texas, which is home to the highest Airbnb supply. The report's authors -- Georgios Zervas, Davide Proserpio and John W.
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