There was a time when hotel owners were divided in their opinion on whether Airbnb is competition to hotels and whether it affects hotel rates or not. With hindsight, Airbnb is not only a growing business that has just received a bullish rating by global investment firm AB Bernstein for how it ‘uniquely inspires’ customers, but it also hosts hotels on its platform. Perhaps the question never should have been about competition, but about distribution.

In this blog post, we explore how Airbnb as a distribution partner to hotels is different, what Airbnb competitors are out there and what alternatives hoteliers might want to consider in order to diversify their reach using channel managers.

What are the benefits of listing your hotel on Airbnb?

In its early days around 2007, Airbnb appeared to be positioned in a niche for budget-conscious travellers, who did not mind sharing their accommodation with their hosts. Over time, however, listings of whole units or properties soared and the site began to dominate the short-term rental space, where the competition had some catching up to do in their online presence. As recently as 2016 STR measured the impact of Airbnb on hotels by impact on ADR during special events; for example, during the Boston Marathon hotel rates grew 5% year over year when unit supply on Airbnb had grown by 76%. For hotels that looked beyond rate impacts, there was a trend to catch that meant strategically listing some of their hotel room inventory on Airbnb.

Due to its longer average length of stay and diverse global customer base that is looking for more home-like accommodations, hotels are able to leverage Airbnb for distribution: simply by positioning larger or multi-bedroom room types, perhaps with kitchens or other amenities, to an audience that may previously not have landed on their own website. Say hello to digital nomads or travellers who also work. Many hotels even manage to convert these bookings on their own website, since price comparisons are part of guests’ research and their booking process.

How does Airbnb compare to the alternatives?

One piece of the puzzle that is often overlooked is just how Airbnb has been able to dominate the short-term rental space. The answer is rooted in what makes Airbnb different from incumbents in short-term rental, that were there before Airbnb entered the market, and also how Airbnb competitors differentiate themselves.

Before Airbnb, the short-term rental space was not technologically savvy: clunky websites have since been upgraded and virtually any platform now has an app to compete with Airbnb. However, where short-term rental platforms previously targeted mainly leisure travellers and families or were indeed specialised in corporate rentals, Airbnb manages to bridge the gap and attract all of those travellers to its platform, for whichever reason they travelled. By adding experiences to their booking options, Airbnb increased its influence on the guests’ entire stay. Quite simply, before Airbnb hotels did not consider listing their inventory on short-term rental platforms: they expected the consumer to make a decision about whether they wanted a hotel or a rental before going to search for precisely that.

When Airbnb introduced category-based search in 2022 it did not just differentiate itself from other short-term rental providers but asked the entire travel segment to update the way it inspires people to travel and research their trips. Suppose you are listing your hotel on Airbnb and you are in a beachfront location. In that case, you can now be found by anyone searching for a ‘beachfront’ holiday—not just people who specifically searched your location, region, or country.