Meeting Mentor Magazine

December 2018

Cover Story

Buzz About Airbnb and Meetings Gets Louder

As the buzz around Airbnb gets louder, big questions could be heard from meeting professionals at industry meetings this summer. From “How much of my group is turning to Airbnb?” to “How reliable, secure, safe and convenient are accommodations not vetted for their quality, service levels, appropriateness and price?” to “What will be the financial impact?”

Insight: The American Anthropological Association always has an issue with attendees booking outside the block, said Ushma J. Suvarnakar, MTA, CMP, director, meetings and conferences. That’s because it’s heavily academic audience — many of whom spend summers in third-world countries — is “fine” with shared bed-and-breakfast and hostel venues. Also, plenty of attendees don’t have the funds to stay within the room block, so they look for the cheapest alternative. Another sticking point is that the association can only select union properties and cities, which results in a price differential between hotels and Airbnb. A survey after the last annual meeting (December 2014) found that 53 percent of respondents did not stay within the block.

All this creates a real challenge for the meeting, which draws about 6,500 attendees (1,650 peak room nights) and up to 75 exhibit booths in 30,000 net square feet of space. “It’s a double-edged sword. If they stay in our room blocks, we can negotiate cheaper hotel rates, but if peak room nights drop, we’ll get fewer perks from hotels,” Suvarnakar said. While the annual meeting’s room block has held steady the past few years, without attrition kicking in, “there’s definitely room to partner with Airbnb moving forward. I don’t think it’s going away, so we might as well embrace it.”

Airbnb can work as an “alternative option for attendees when hotel compression is so tight that rooms are not available,” said Jerry Horan, president and COO, ConferenceDirect.

Market Analysis. STR conducted its first “deep dive” comparative analysis of New York City, using publicly available Airbnb data on May 1 and STR’s own hotel data for the month of May. One finding surprised senior vice president Jan Freitag: roughly 60 percent of available Airbnb units were standalone full apartments and houses. STR found approximately 105,000 hotel rooms and 8,600 Airbnb listings at that time. On average across all NYC boroughs, the hotel room rate was $289, and the Airbnb room rate was $256 with wide variation by submarket.

“When Airbnb started, it had the halo of shared couches and millennials staying with other young people,” he said. “The reality is that full apartments, and a lot of them, are competing with hotel rooms.”

Freitag acknowledged that the STR analysis “is circumstantial,” since hotels give STR actual rate data, but Airbnb does not. “We know that a certain Airbnb unit was on the market for a certain amount, but we don’t know whether it rented, for how long, and the actually achieved rate.”

One big issue around attendee use of Airbnb, he cited, is whether where they’re staying is legal. “Meeting planners and attendees want to be good corporate citizens and pay taxes as needed and required,” Freitag said. Indeed, some U.S. cities are looking to restrict Airbnb operations based on unfair competition, loss of affordable housing stock, and non-collection of transient occupancy taxes.

Hype…or Not? How much of the hype around Airbnb and meetings is just that? “When we first started digging into online travel agencies, we always joked they were 88 percent of conversation and 8 percent of demand,” Freitag said. “Aibnb is here to stay and a competitor for a certain target market. And it’s worth noting that Airbnb is targeting corporations with a business travel program and software solution.”

Indeed, more than 500 companies joined the “Airbnb for Business” program within 24 hours of the launch of its new corporate dashboard, the company reported, bringing total sign-ups to 1,000 businesses (including Fortune 1000 companies) from 35 countries.— Maxine Golding

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About ConferenceDirect
ConferenceDirect is a global meetings solutions company offering site selection/contract negotiation, conference management, housing & registration services, mobile app technology and strategic meetings management solutions. It provides expertise to 2,500 corporations and associations through our 325 Associates globally. www.conferencedirect.com

About MeetingMentor
MeetingMentor, the leading publication for senior meeting planners, is circulated to the clients, prospects and sales associates of ConferenceDirect, which books more than 3.87 million room nights. www.meetingmentormag.com

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