The impact of Airbnb on the hotel industry and the broader economy has been hotly debated these days. The central question is whether Airbnb is in fact disrupting the hotel business and changing the landscape of the lodging industry.
Founded in 2008, Airbnb is a social website that connects people looking to rent their homes with people who are looking for local accommodations. It operates in more than 34,000 cities and 190 countries.
Until now, the U.S. hotel sector has been in denial about Airbnb. Hotels mostly downplayed competition from platforms like Airbnb in the past, arguing that these platforms are a small niche market.
“I strongly do not believe that they are a major threat to the core value proposition we have,” said Christopher Nassetta, CEO of Hilton, at an earnings call in October.
However, things have started to change. Airbnb is indeed competing with and acquiring market share from established hotels, according to industry experts.
And New York is a prime example.
Based on a report by the Hotel Association of New York City (HANYC), in the 12-month period starting in September 2014, Airbnb had a negative impact to the tune of $2.1 billion on the hotel industry and the broader economy of New York City.
“This study not only confirms that Airbnb’s operations in New York City have a negative impact on the hotel industry, but it also details the tremendous disruptive reach Airbnb has on the broader city economy and our communities,” said Vijay Dandapani, chairman of HANYC, which represents more than 270 of the city’s hotels.
