Airbnb completely changed the way that people travel.
For decades, the only real options for people traveling were to get hotel rooms or costly resorts. That all changed in 2008 when a new, innovative idea of renting out a home for vacationers to use became a reality – or at least as a mainstream option.
3 Ways Airbnb Changed the Economy
Today, Airbnb is a 73 billion-dollar industry, making up 26% of the travel booking industry. One may believe that Airbnb is the perfect business in the travel industry; however, not everything is smooth sailing.
This article will cover three unintended consequences that have resulted from the success of Airbnb.
Tourism and Attractions Industry
With resorts and hotels, people tend to stay in the same small area. For example, in Miami, most resorts and hotels are along a small beachfront property on the Miami coastline. With people now renting out homes, travelers are now spread out more.
Rather than being condensed into a small beachfront area, people are spread out all over Miami. This has resulted in hotels and resorts taking a hit with sales and business. At the same time, it also means more business to other parts of tourism-centered cities.
Companies once only visited by locals on a budget are now filled with tourists with money to spend. It has also allowed for excursion companies to spread out rather than being forced to compete in a small area around the resorts.
Housing Market
Another unintended consequence of Airbnb is its effect on the housing market. In Houston, Texas, there are more than 15,000 registered rentals in the city district. 15,000 homes that may have been previously rented or owned are no longer available.
This means fewer opportunities for companies like Green Residential, a Houston property management company, and fewer places for prospective renters to live.
With so many Airbnbs available, it has created a housing bubble in some regions of the world. For example, there are more than 6,500 Airbnb rentals in New Orleans. With lower supply, the demand grows, causing home prices to rise.
The biggest fear of this model is that if there is ever a severe recession and people stop traveling, all of these Airbnb homes will go up for sale. With thousands of homes on the market simultaneously, along with the typical rise in houses being put on the market, it could cause a significant crash.
Hotel and Resort Industry
There was a time when if travelers wanted to visit Orlando but couldn’t afford the expensive resorts near Disney, they would stay in a neighboring town in a smaller but still touristy area. With Airbnb offering more inventory and lower prices, these neighboring towns are losing their tourism business.
In the Orlando district, some projections show that 100 hotels will soon have to shut down. There are many reasons for this, but when looking at the locations of these resorts and hotels, it’s easy to conclude that most are outside of the Orlando area.
Meanwhile, hundreds of Airbnbs are still receiving plenty of business closer to the epicenter of the Orlando tourism areas.
Conclusion
Airbnb has undoubtedly opened up many opportunities for travelers and has
drastically changed the scope of the travel industry. However, it is also important to recognize that unintended consequences are happening. By doing so, decisions and future businesses can take more steps not to affect communities negatively and amongst companies.