How big of a threat to the hospitality industry is Airbnb’s upcoming IPO?
Digital Marketing in Hospitality
— 10 experts shared their view



Professor of Strategy at University of South Australia Business School
With a more explicit mission to maximize value for shareholders as a result of going public, Airbnb will move quickly to leverage its powerful brand and extensive online audience to realize its potential as a mainstream lodging platform. see more

Founder | CEO | Futurist
Unlike most of its competitors, Airbnb was able to turn a profit (even though mainly due to significant cost cuts) even in this turbulent year, with $219 million in Q3. Moreover, the IPO date has been set just weeks after the Pfizer, BioNTech, and Moderna vaccine announcements infused new hope to the industry and made the stocks of competitors such as Expedia Group and Booking Holdings rise. Bottom line is that I would personally buy Airbnb stocks, but that's not the point. My two cents is that the company's IPO will negatively impact hotels' performances, already hit by the COVID-19 crisis and that the only weapons hotel will have to fight back will be to keep lobbying for stricter and more severe regulations for the home-sharing industry. It may not be enough, though, and I foresee that Chesky's company will likely cannibalize a good portion of the hospitality space in 2021.

Adjunct Professor NYU Tisch Center for Hospitality and Hospitality & Online Travel Tech Consultant
In spite of all the pre-IPO hype, there are a lot of headwinds against Airbnb's unchecked growth:
A) 80% of inventory listings on Airbnb are entire houses and apartments, but there is a limited inventory of these rentable second homes. In 2019 the total count of second homes in the U.S. was 7.4 million, accounting for 5.6% of the total housing stock. Europe's housing stock is less than 5%. Many second homes are not-rentable since they are on the shabby side: cabin in the woods, fishing cabin by the lake, etc. see more

A successful IPO will place Airbnb in a much stronger financial position so they can remove the high cost (at 11% interest) of their recent funding and prepare to operate profitably again. The threat of Airbnb will be felt by hotels that are perceived to be "risky" in terms of Covid-19 transmission prevention, eg. large hotels with busy public areas. Without going into detail on the benefits of Airbnb accommodation vs a hotel, motel or resort - the pandemic has created awareness in the public of social distancing and remaining within a "social bubble" - which plays really well into the majority of Airbnb accommodation offerings (being a private residence, no lobby or elevator packed full of strangers). I believe Airbnb are a threat to many average hotel operators, even without funding from an IPO. A solid Airbnb just means they are here for the long haul and will likely have a detrimental impact on a section of the hotel market. Smart hotel operators offering consistent and predictable high levels of service will not be impacted too negatively by Airbnb, IMHO.

Managing Director Hotel Mogel Consulting Limited
The Airbnb IPO is interesting but has nothing to do with the success (or failure) of their business. Airbnb is the game-changer in our industry. Their value reduction as stated above is representative and consistent with all publicly traded hotel companies. I do not necessarily agree that their market share reduction has anything to do with competition. Rather, this is probably a function of reduced inventory due to inventory restrictions levied by some municipalities and rental unit conversion to long term occupants. This is just a short term blip. Rest assured this will be a very successful IPO and Airbnb is not going away! Airbnb is the de facto accommodation market leader.

Welcome to 2020. Airbnb is part of the hospitality industry already. Get over it.
I hope IPO cash might help them ease Expedia and Booking's oligopolistic power. I hope IPO cash might have them boost a faster global return to travel. I suspect it's rather marginal for hotels on both counts.

Associate Professor at The Collins College of Hospitality Management
Like most hotels were doing when the pandemic hit, Airbnb reported a 90% drop in booking or a $400 million adjusted loss in the second quarter. Additionally, Airbnb laid off 7,500 employees, 25% of its workforce, and immediately cut its marketing budget by 14%. see more

All the IPO will do will pour money into a business that already had billions of money chucked at them. The bigger question will be around the business model in the post-COVID era and how likely guests are using alternative accommodation instead of hotels. Early indications showed that OTA's who own vacation rental sites saw grat increase on those sites whilst all others declined. see more

Co-Founder at TRAVHOTECH
AirBNB is a distribution platform which is for the most part specific to a particular type of accommodation product in terms of AirBNB's core inventory. see more

The imminent IPO of Airbnb can be seen as both a threat and an opportunity for the hospitality industry. The prospect of its continued expansion is a timely warning to hotels that there's no room for complacency when it comes to monitoring all competitors and responding to threats. see more