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Airbnb is no threat to hotels - 11 Sep 2017

The explosion of Airbnb does not pose a major threat to the global hotel industry, says Stephen Rushmore, president and ceo of HVS Global Hospitality Services.

Discussing global hospitality market trends at the Tourism, Hotel Investment & Networking Conference (THINC) Africa 2017 in Cape Town, Stephen said Airbnb mainly targeted the leisure market, with very little impact on the corporate segment. It mostly targets new demand not catered for by the hotel industry by providing accommodation to guests who otherwise can’t afford a room in a particular market; and adds room capacity in congested markets.

Its main impact on the industry was that it lowered hotel rates in already low accommodation periods, Stephen added. “Overall, Airbnb has a role and fulfils a need in the leisure segment, but I don’t see it as a direct threat to hotels.”

According to Stephen, the global hotel market is now at the top of an eight-year growth cycle. However, volatility and oversupply as the cycle declined in future were less likely than in the past, because banks were now more knowledgeable about the dynamics of hotel values.

Hotels were becoming less risky assets as more and better-informed investors entered the market, Stephen added. Niche hotels in specific markets would provide the best investment opportunity, he said.

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