Future of Hospitality 2016

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shaking up the UK hotel sector economy and delivered a stark wake-up call which is revitalising the sector celona you need a licence to rent your property. These are other op- tions for UK regulators which may impact growth." Nevertheless, Mr Sharma argues that demand for authentic, person - al travel experiences will continue to fuel Airbnb's appeal even after regulatory corrections come into force. He sees a gradual merging of hotels and homes, combing the pro - fessionalism of one with the experi- ences offered by the other. And there is evidence to back up his claim. In April, global hotel group Accord acquired upmarket Airbnb rival Onefinestay for €128 million. The business provides a similar service to Hostmaker, of - fering a hands-on experience with fuller customer service. "Branded homes are the future of the hotel industry," says Mr Shar- ma. "Hotel chains are best placed to make this happen as they have the resources, reach and household name that would be needed. Collab - orations between sharing-econo- my disruptors and big hotel groups would be no bad thing." Elena Lopez, managing direc- tor of fellow property manage- ment company My Property Host, agrees. "The traditional hospital- ity sector can learn a lot from the most successful Airbnb hosts," she says. "Adding greater individuali- ty to rooms, providing more infor- mal communal areas and offering more personalised recommenda- tions about the local area will all appeal to guests who value au- Share this article online via Raconteur.net stays," says David Ryland, corpo- rate real estate partner at law firm Paul Hastings. "This may well en- courage local government to take action given how sensitive and po- litical issues around housing are in the UK currently." In the German capital Berlin, Air- bnb has been subject to a partial ban such are concerns about its impact on the local economy, while other European cities have slapped restrictions on its use. "Airbnb is under threat of regula - tion in cities around the world. It's plausible that similar rules as those in Berlin could be implemented in the UK," says Nakul Sharma, chief executive of Airbnb management platform Hostmaker. "In Paris, Air - bnb pays tourist taxes and in Bar- provisions and signage. As yet Air- bnb makes no such commitment. There is also the question of legality where someone's home is also their business; what are the implications for areas like tax and insurance? A third bone of contention, par - ticularly in places like London where residential property is in short supply, is the large profit margins of short lets. More Airbnb listings mean fewer homes to go around for local residents, equat - ing to even higher house prices and rental values. "In London, concerns have been raised that Airbnb is impacting the housing crisis, with landlords being accused of taking long-term lets off the market and promoting them instead as short-term holiday INDUSTRY FORECAST IMPACT OF AIRBNB ON HOTEL INDUSTRY OCCUPANCY FORECAST 2015 67% 68% 69% 70% 2016 2017 2018 2019 2020 Occupancy under traditional model (pre-Airbnb) Occupancy with impact of Airbnb (base case) Source: STR Global/MKG Group/Company data/Morgan Stanley Research FORECAST IMPACT OF AIRBNB ON HOTEL INDUSTRY RevPAR GROWTH* FORECAST 2015 3% 4% 5% 6% 2016 2017 2018 2019 2020 Growth under traditional model (pre-Airbnb) Growth with impact of Airbnb (base case) *Revenue per available room (RevPAR) OF LISTINGS 01 02 08 10 07 06 04 09 LONDON 47,000 NEW YORK 46,000 03 LOS ANGELES 26,000 05 COPENHAGEN 20,000 08 SYDNEY 20,000 09 AMSTERDAM 17,000 10 CHANNELS USED TO BOOK LEISURE TRAVEL thenticity as well as a comfortable bed for the night." Like so many other industries im- pacted by new technologies and the ideas they help to facilitate, the hos- pitality sector is in turbulent waters. But with flux comes opportunity and companies will do well if they can adapt to evolving customer proclivi - ties while walking the legal tightrope. Victor Hugo was right. All powers in the world won't be able to reverse the march of the sharing economy. Hotels must understand that it's better to get on board than sit on the sidelines and dumbly watch as the opportunity passes by. Source: AlphaWise/Morgan Stanley Research 2015 Online travel agency 56% Hotel website 56% Travel agent 30% Other rental site 13% Airbnb 12% Source: Airbnb Data & Analytics 2016 PRICE DIFFERENCE BETWEEN AIRBNB AND HOTEL AVERAGE AlphaWise/Morgan Stanley Research 2015 nights 10+ nights 25% 5% 12% 33% 25% Hotels Source: STR Global/MKG Group/Morgan Stanley Research Global average Airbnb ADR* US ADR Europe ADR** $115 $105 $100 ADR: average daily rate *Morgan Stanley estimate **2014 ADR ROME 23,000 RIO DE JANEIRO 33,000 04 RACONTEUR raconteur.net 09 FUTURE OF HOSPITALITY 22 / 09 / 2016

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