The Sharing Economy: A Threat To The European Hotel Industry?

The rise of the ‘sharing economy’ has become the topic of much debate around Europe. So much so that even its very definition is widely refuted. However, most agree that sharing economy refers to an economic model in which individuals are able to rent or borrow assets from someone else. While many believe the emergence of the sharing economy is a good thing, presenting opportunity and empowerment to ordinary people, there is a large subset of critics who believe it is causing irrevocable damage to existing industries.
The European hotel industry is especially concerned with the rise in popularity of the home sharing service, Airbnb, which offers users the ability to list, find, and rent lodging online, both for long-term and short-term stay. In a survey given by Atmosphere to 300 hotel groups in 2015, over 70% said they believed Airbnb and other home sharing services would pose a threat to their business in the next 3 years. With 1.5 million listings in 34,000 cities and 190 countries, and unprecedented growth, particularly in Europe, for 2014 & 2015, it easy to understand why Airbnb may have the European hotel industry shaking in their boots a little. But how much of a threat are they really posing?
To get a better of idea of how the sharing economy is really stacking up against the European hotel industry, we compared the social conversation in Europe since 2009 around Airbnb to the conversation around Europe’s top hotel booking sites: Expedia, Booking.com, and Hotels.com.
Initially, a look at general volume of mentions gives the appearance of domination by hotel booking sites with their 236,296 mentions to Airbnb’s 174,818. They also appear to have a lot more conversation prior to 2014, which is when the majority of mentions start to appear for Airbnb.                         

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If we narrow our findings to 2014 and 2015, when the sharing economy first started to gain acceptance and attention, we see the two are actually almost neck and neck, with Airbnb leading mentions by just over 1,480.

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Looking at share of voice, Airbnb’s rise in popularity is even more apparent, growing from almost no share of the conversation in 2010 up to almost 80% at points last year. While it appears hotel booking sites have lost some ground to Airbnb, they still seem to be maintaining the majority of the conversation across the year.
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Examining sentiment, however, we really see Airbnb start to distinguish itself. The graph below shows overall sentiment across all posts for hotel booking websites and Airbnb since 2009.

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Airbnb not only holds much higher positive sentiment than hotel booking sites, but also a lower percentage of negative sentiment. These findings are made even clearer by using Crimson Hexagon’s word cloud abilities. As seen below, Airbnb’s cloud contains a host of positive language like ‘happy’,’great’,’love’,’best’, etc. This is further confirmation of the positive conversation around them, and is a sign of high customer satisfaction with their services. In the hotel booking sites cloud, while we still see some positive language, we also see a much higher volume of negative word use like ‘poor’, ‘bad’, ‘confused’, ‘cancel’, etc. This is a sign that perhaps these sites, and hotel services themselves, are not meeting customer needs.

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While this study only scratches the surface of the impact of the sharing economy on the European hotels industry, its findings paint a pretty clear picture of the current climate. Hotels still hold favour with the majority of the audience, but Airbnb and the sharing economy are hot on their heels, displaying incredible growth in the last two years as well obtaining much more positive feedback from consumers than their hotel counterparts. If Airbnb continues to grow at this rate, and the hotels industry doesn’t find a way to actively compete, the tide could very quickly turn, solidifying home sharing as the way of the future, and hoteling a thing of the past.
To learn more about the rapidly changing landscape of the European hotel industry, download our e-book ‘Analysing The European Hotel Industry: A Data-Driven Comparison of Europe’s Top Hospitality Brands’ here!

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