Editor's Note: Below is a quick, complimentary research snippet from our Gaming, Lodging & Leisure team led by Todd Jordan.

Will Airbnb for Work Become a Threat to Hotels? - zbb

Airbnb for Work is trying to define itself as something more than just business travel.  Starting this week, Airbnb for Work is adding Airbnb Experience into its booking experience for business travelers.  Airbnb for Work already tripled its bookings YoY in 2017 and signed up >700k companies.

Three new options are:

  • teambuilding exercises
  • offsite/meeting locations and
  • longer-term rentals for relocations. 

Airbnb mentioned a successful trial process with the inclusion of these new features for Airbnb for Work. 

According to David Holyoke, Airbnb for Work’s global head, teambuilding options have tremendous value to build a deeper connection with employees, and offsite home retreat locations is a welcome alternative to boring conference spaces.  As for the relocation opportunity, Holyoke said:

“20% of employees say they’re eager to relocate…and when you think of the relocation market and where there's supply, in many cases I would say it's very sterile, one- or two-bedroom units. That may not fit in terms of what a relocating family or individual needs.” 

The growth of Airbnb for Work is important if Airbnb wants to get anywhere close to its 2028 goal of engaging with one billion guests.

As it relates to our bullish hotel thesis, Airbnb for Work is still in its (very) early days before becoming a legitimate threat, but that doesn’t mean it’s not worth discussing. 

For our full service REIT stock picks (PK and HST), both with significant convention and resort assets in high barrier to entry markets, we don’t see Airbnb as a threat just yet.  Airbnb is a long way from being able to compete with large scale resorts that can accommodate groups of all sizes while being able to offer various amenities. 

Airbnb will continue to be a threat with respect to limiting compression night pricing power, but as we have flagged in the past, Airbnb’s supply growth has started to dwindle in a number of the REIT stronghold markets across the US, and in some cases supply has actually decreased significantly (SF, NYC, DC, Boston, LA, Philly).          

Will Airbnb for Work Become a Threat to Hotels? - hedgeye pro