“BELONG ANYWHERE” AND DISRUPT EVERYWHERE:

HOW AIRBNB IS TRANSFORMING TOURISM (AND THE WORLD)

Tenth Annual Tourism Policy Workshop

Dromoland Castle, Ireland

November 23, 2019

Dr. Daniel Guttentag

Growth and Size

• 7M listings

• 500M guest arrivals

• 2M guests/night

• $2.6B revenue (2017)

• $35B valuation

Growth and Size

0 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000

Hotels

Airbnb 7M

1.32M 879K 850K 810K 698K616K 526K

Growth and Size

0

5,000

10,000

15,000

20,000

25,000

30,00027,10026,200

21,700

12,200

3,300

Ireland Private

Ireland Entire

Dublin Private

Dublin Entire

Guest motivations

3.45

4.35

4.45

4.71

4.99

5.22

1 2 3 4 5 6

Host, local interaction

Uniqueness

Authenticity

Household amenities

Convenient location

Low cost

Guttentag et al., 2018

Branding

Coolness

2.1

3.0

4.5

1

2

3

4

5

6

Guttentag, 2016

SubstitutionThe notion that we’re in

competition with hotels is also a little bit overstated.-Brian Chesky, CEO, Airbnb

I think we’re fundamentally in different businesses… So no, I’m

not worried about them. -Christopher Nassetta, CEO, Hilton

Dogru et al., 2019

Airbnb 10%

RevPAR 0.2%Guttentag & Smith, 2017

Evolution

Evolution

Hotel strategic responses

• (Regulatory lobbying)

• (Rate cutting)

• Highlight value

• Deliver quality hospitality

• Infuse more local character

• Packaging

• Revenue management

• Loyalty programs

• Adopt as distribution platform

OTA competition

You'll think of Airbnb to plan your entire vacation … not just housing,

not just homes.-Brian Chesky, CEO, Airbnb

Our competition is two companies – Expedia and Booking.com.

-Brian Chesky, CEO, Airbnb

Challenges ahead

• Penetrating non-leisure market

• Penetrating non-lodging sectors

• Host churn

• Plateauing growth

• Satisfying mainstream customers

• Maintaining quality at scale

• Regulation

Divisive issue

Issues: A level playing field

Taxes

• Tourism taxes

• Property taxes

• Income taxes

And…

• Licensing/safety

• Accessibility

• Zoning

Issues: Housing

Dublin Edinburgh London

Listings 9,512 11,985 77,096

Entire homes 50% 62% 56%

Avail 90+ days/yr 27% 51% 42%

Mult listings 43% 40% 47%

Schneiderman, 2014Barron et al., 2018

Airbnb 10%

Prices 0.26%

Rents 0.18%

Issues: Quality of life

26%

17%

12%

20%

0%

10%

20%

30%

Anyone Your neighbor

Should ______ be allowed to rent rooms?

Freely allowed

Completelybanned

Skift, 2015

Issues: Safety, discrimination

• Theory: Review system provides accountability, not permission

• Practice: 80% of Ireland listings have 4.5+ star rating

Regulation

Quotas

• Ireland: 90 days

• Charleston, SC: No whole-home

• Amsterdam: 30 days

• London: 90 days

• New York City: No whole-home

• Paris: 120 days

• San Francisco: 90 days

• Toronto: 180 days

• Vancouver: Only permanent residence

Other limitations

• Primary residence

• Registration / license

• Bedroom / occupancy max

• Additional tax

• Condo board permission

Enforcement

• Airbnb enforcement

• Third-party digital compliance monitoring

• Crackdowns

• Results Denver: 3,750 2,800 Vancouver: 6,600 3,740 San Francisco: 10,000 5,500 Japan: 62,000 41,000

Thank you

Daniel Guttentag

guttentagda@cofc.edu