Leading Meeting Professionals

Professional Convention Management Association

July 07 2014

Another Sign That Airbnb Is A Serious Threat To The Hotel Industry

By David McMillin

Airbnb has already earned a stamp of approval from Warren Buffett. Now, the peer-to-peer online rental company is aiming to earn praises — and dollars — from tens of thousands of runners from around the world. According to Crain’s, the company has inked a sponsorship deal with the New York Road Runners for the upcoming TCS New York City Marathon.

The Sheraton New York Times Square Hotel and the Hilton New York serve as the official headquarters hotels of the marathon. However, the rates of these hotels might prove troublesome for cash-strapped competitors. The Sheraton lists single/double rates at $369 per night with an additional charge of $30 per person, and the Hilton rates currently clock in at $469 per night. My quick search of Airbnb for a one-night stay on November 1, the evening before the race, uncovered a wide range of cheaper options, including this one-bedroom in Times Square for $225.

SEE ALSO: Should Hoteliers Be More Concerned About This Company?

While Airbnb rentals can help runners save money on their stays, the company is currently facing some serious pressure from New York Attorney General Eric Schneiderman. Earlier this year, he subpoenaed Airbnb’s records after accusing the company of violating city and state laws that prevent short-term rentals of private apartments.

The hotel industry has not received news of the NYRR sponsorship with open arms. Josh Gold, political director of New York-based Hotel Trades Council, questioned why the NYRR decided to accept Airbnb as a sponsor.

“Whatever the amount of money NYRR was offered, I hope it was worth it to align with a company that is still struggling to exist within the law,” Gold said.

It appears that runners have already been using Airbnb during the race. An Airbnb executive told Crain’s that more than 10,000 visitors used Airbnb during the marathon weekend in 2013. With the sponsorship deal in place, those numbers may be poised for big growth. More than 50,000 runners completed the race last year, and Airbnb is certainly hoping to leverage the partnership to fill more of its properties in the Big Apple.

SEE ALSO: 3 Trends That Will Redefine Hotels

The supply of traditional hotel rooms in the US has been relatively flat, but the reality is that the supply of affordably-priced accommodations is soaring due to Airbnb. In fact, when Brian Chesky, CEO and founder of Airbnb, heard that Marriott wanted to add 30,000 rooms in 2014, he tweeted, “Marriott wants to add 30,000 rooms this year. We will add that in the next 2 weeks.”

Looking for more proof that Airbnb is on the rise? Take a look at these numbers. On July 5, 2012, approximately 30,000 people stayed in an Airbnb property. On July 5 of this year, Airbnb hit a new record with 331,000 guests. It’s clear that travelers are ready and willing to break up with a traditional hotel experience.

Has Airbnb impacted your room block yet? Share your perspective on Catalyst.

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