17 November 2017 Courier Weekly

Airbnb plateauing and London’s worst month for hotels.

PLUS: Damage control – Hotel glut – Investment – Hospitality workers

Signs we’re close to ‘Peak Airbnb’.

It had to happen at some point, but it was assumed there were many years of steep growth still to come for Airbnb.

The number of people booking a room on the platform grew just 3.3% last year, falling from 7.9% in the previous 12 months, and even higher in previous years. (That data is based on a survey of 4,000 consumers (paywall) in the US, UK, France and Germany.)

It dampens predictions of how much Airbnb can hurt the traditional hotel industry.

Fascinatingly, however, awareness of Airbnb has shot up as bookings have slowed; 80% of people knew about Airbnb in 2017 compared to 52% in 2015.

The conclusion is the ‘easy growth’ of selling Airbnb to people once they’ve been made aware of it is now coming to an end.

Two other questions in the report: how much is Airbnb a mainstream replacement for hotels, or is it in fact a bit more niche than many had forecasted? And, has the lobbying against Airbnb by the hotel industry made an impact? The FT reckons the former a bit, but not so much the latter.

Airbnb attempts damage control.

This Bloomberg article has the signs of a story placed by Airbnb. It attempts to divert the focus from the slowdown in the western markets by focussing instead on annual growth of bookings in Latin America (150%) and Asia (80%). The report also claims Airbnb is on course to achieve 17 months of sustained profitability.

The timing and nature of the article suggests Airbnb is genuinely worried about what impact signs that it’s slowing down in western markets will have on its plan to float next year.

London room occupancy is at an 11-year low.

A glut of new hotels are opening in London at a time when it’s getting harder to fill rooms.

October was London’s worst month for hotel occupancy in 11 years. The sheer volume of beds unleashed onto the market has cranked up competition.

That’s a lot of pressure to sell rooms in a market that typically needs 70% of rooms to be occupied to ensure profitability. (Hotels have also been frustrated with the growth of booking sites like Expedia and Booking.com which take chunks of their income – varying from 10% to 25%.)

Hotels have been popping up like mad over the last couple of years, even outside the traditional hotel hotspots in the West End.

The Curtain, the Ned, Nobu and Citizen M have turned the City and Shoreditch into a credible spot for hotels in recent years. Around 161 rooms will feature in the new Bankside hotel near the South Bank, due to open in the summer. King’s Cross will see the arrival of the 270-room Standard hotel next summer. Other large luxury hotels are opening in equally unlikely spots; Tower Hill and Aldgate, for example.

Not only are new luxury hotels emerging, but budget chains have been on an opening spree too. In fact, they now account for 20% of hotels in London with Premier Inn, Travelodge, Holiday Inn and Ibis the key players.

It’s only hostels which appear to be retrenching: just 2% of the London hotel market.

New companies forming in the ‘Airbnb economy’.

Such is the enormity of Airbnb, several startups are landing decent sized investment from offering add-on services to hosts on the platform.

Hostmaker is one of the biggest. The company helps property owners manage all aspects of home rentals, from interior design to housekeeping. It raised £11m in investment this month, taking its total to nearly £20m.

Other companies piggybacking on Airbnb include Pass the Keys – another Airbnb management company – and Guesty, which is aimed at professional property management companies which have multiple properties on Airbnb. Pass the Keys and Guesty have raised a total of £645,000 and £3.6m respectively.

Gary Neville, the hotelier, on the Brexit impact. 

Ex-footballer, TV pundit, football club owner and hotelier Gary Neville has added his voice to growing concerns over Brexit’s impact on the hospitality sector.

He described European hotel staff leaving the country due to Brexit as ‘a scandal’. Around 437,000 EU nationals have left the UK since the Brexit vote.

Neville owns the 133-room ‘Hotel Football’ in Manchester with several other former Manchester United footballers. The plan is to open more such properties around the world.

The impact of Brexit is something worrying many in the sector. Hoteliers in Cumbria estimate the county will need more than 80,000 workers in the next four years to replace migrant workers and fill new jobs.