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Airbnb’s effect on hotel sales growth
Journal article   Peer reviewed

Airbnb’s effect on hotel sales growth

Inès Blal, Manisha Singal and Jonathan Templin
International journal of hospitality management, Vol.73, pp.85-92
07/01/2018
DOI: 10.1016/j.ijhm.2018.02.006
url
http://hdl.handle.net/10919/100452View
Open Access

Abstract

•We study the longitudinal impact of Airbnb on hotel sales performance in San Francisco where Airbnb was founded and has a high penetration rate.•Airbnb supply does not affect hotel sales indicating a supplementary effect, but average price of Airbnb listings affects hotel RevPAR positively.•Further, interestingly Airbnb user satisfaction scores affect RevPAR negatively, indicating a substitution effect.•The effect depends on the scale of hotel and is not uniform across all types of hotels; lower scale hotels are affected more than upper scale.•Our study relies on longitudinal data and mixed model methodology compared to previous cross-sectional data and a before/ after entry design. Disruption of existing industries by peer-to-peer sharing economy platforms, like Airbnb, has received extensive media attention primarily regarding the regulatory and the social aspects of the sharing economy. In this paper, we examine the substitution and complementary effects of Airbnb supply on hotel sales performance patterns in San Francisco, the birthplace of Airbnb. Our results, based on a mixed-model analysis using a saturated, unstructured covariance matrix, show that overall hotel RevPAR is unrelated to total Airbnb supply. Interestingly however, in certain segments, RevPAR is affected by the average price of Airbnb listings. More importantly, hotel sales performance is impacted by Airbnb customer reviews, which points to nuanced and contextual complementary and substitution effects. We outline suggestions for future research as well as practical implications for hotel firms operating in similar markets where Airbnb has high penetration rates.
 Airbnb Disruptive innovation Lodging Sales performance Sharing economy

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