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“Sharing Economy” Gains Market Share in Travel with Online Sites Like Airbnb, HomeAway and Many Global Competitors, Business and Industry Trends Analysis

One of the most remarkable growth stories in ecommerce has been the advent of new ways to book non-traditional accommodations for travelers.  This “sharing economy” (also known as collaborative consumption) affords consumers the ability to rent or borrow everything from hotel rooms to cars to private homes.  As with all hospitality sectors, shared accommodation has been hard hit by the Coronavirus pandemic.  Many travelers may feel safer in small independent properties, away from crowds, rather than in large hotels.  While the early months of the Coronavirus saw plummeting demand for travel and for accommodations, short-term home rental sites such as Vrbo soon found popularity among travelers who wanted to avoid hotels.

Vrbo, which stands for Vacation Rental by Owner, is a site that allows property owners, especially owners of second homes and resort condos, to advertise their properties online to people seeking vacation accommodations.  Vrbo was acquired by startup HomeAway, Inc., a firm that originated when venture capital firm Austin Ventures agreed to back entrepreneur Brian Sharples in this promising business sector.  HomeAway also owns Travelmob, a sharing-economy accommodations site focused on Asia.  HomeAway was acquired by Expedia in 2015 for $3.9 billion, and the HomeAway name was dropped in favor of Vrbo.

Internet platforms that focus primarily on hotel room reservations are also adding homes and apartments as alternative places to stay.  For example,, a major presence in online hotel room booking and a subsidiary of Priceline, is also offering shared-space and vacation property listings on its site. 

The biggest disruptor to the hotel industry is San Francisco-based Airbnb, Inc., founded in 2008. members who are willing to let travelers stay in their homes can post their information, including pricing and accommodation details.  The accommodations range from a bedroom in an occupied house or apartment to a luxury apartment or condo reserved entirely for the guest.  In turn, travelers may search in a given market for members who are willing to accommodate them.  Airbnb offers more than 5.6 million accommodations in 220 countries.  Members are encouraged to write reviews describing the positive and/or negative aspects of their stays.  These reviews are partially encouraged so that renters and travelers may view profiles and feedback before staying in homes or letting others stay in their homes, thereby reducing the risk of danger or other negative situations.  The Airbnb network is also connected to Facebook, allowing members to search the social networking platform for additional information regarding certain hosts and guests.  Airbnb charges room owners a 3% host fee and an additional fee of 6% to 12% per guest.  The average commission is about 12% of total revenues.  The typical guest stays longer, on average, than a guest in a traditional hotel.

Airbnb has expanded to offer local-led activities in cities around the world.  Activities are varied and may include bike rides, walking tours or fishing trips, to name a few, and are typically provided by Airbnb hosts.  The company offers Airbnb Plus, a luxury service that matches higher-paying guests with quality-inspected home or apartment rentals.

Airbnb is establishing new standards for hosts with regard to cleanliness, communication and cancellations, and offers a mobile app to facilitate communication between hosts and guests.  Hosts are encouraged to earn badges for “business travel ready” listings that offer such amenities as Wi-Fi and hairdryers.  In growing numbers of cities, hosts are now required to purchase short-term rental licenses and collect and remit municipal taxes.

Literally hundreds of competitors and imitators have sprung up around the world.  Some are focused on particular locales, travelers or types of accommodations.  For example, (which was acquired by AccorHotels) is focused on renting a curated collection of better homes and condos in major cities, including New York, Paris, Los Angeles and London as well as resort destinations in the Caribbean, Hawaii and Central America, among others.

Despite their wide popularity, room- and home-sharing sites face multiple challenges.  Fraud has been a problem, with unscrupulous site members collecting fees for rentals of properties that they claim to own but are in fact owned by others.  Guest safety is a serious issue.  There have been accidents, dog bites, even a guest locked into his room by a host seeking sexual favors.  At most sites, there are no room inspections and no way to enforce room standards.  Guest room rentals may not be covered under a homeowner’s insurance policy.  Likewise, such rentals may not be allowed under homeowner’s association rules and municipal law.  Last, but not least, the market may become saturated, with only a limited number of properties available to add to inventory.

Nonetheless, the traditional hotel industry sees room-sharing as a significant competitive threat that is already taking market share.  The long-term result may be hotel chains creating their own branded sharing sites, listing both their own hotel properties and rooms or condos owned by others.  Hotels may build hybrid properties as well, with apartment towers for room sharing next door to traditional hotel properties.  The hotels could run the apartments to high standards, and could build oversized pools, spas and other common area facilities to be shared with guests from the apartments next door.

Marriott International offers a vacation property-sharing venture called Homes & Villas by Marriott International.  The division offers 2,000 luxury properties worldwide with options ranging from one-bedroom homes to a castle in Ireland.  Marriott is partnering with LaCure and Lloyd & Townsend Rose to vet and manage unique properties.

SPOTLIGHT:  Short Term Apartment Rentals Compete with Hotels

Travelers are finding furnished apartments in cities around the world available for short term rentals.  In some cases, large buildings built especially for this apartment-hotel purpose are springing up.  Similar to an Airbnb stay, the apartments offer kitchens and washers and dryers for about 20% to 30% lower nightly rates than hotels.  Management companies typically lease a few floors in a condo or apartment building, although Sonder Corp. ( manages all 270 units in the Butler Brothers building in downtown Dallas.  Another company that is active in this segment is Domio, Inc. (

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