assessing the real impact of airbnb on the canadian lodging industry
TRANSCRIPT
03/11/2016
1
03/11/2016
2
ASSESSING THE REAL IMPACT
OF AIRBNB ON THE CANADIAN
LODGING INDUSTRY
SPEAKERS
Chris Gibbs | Ryerson University
Ken Lambert | HLT Advisory Inc.
03/11/2016
3
03/11/2016
4
03/11/2016
5
03/11/2016
6
Airbnb Fast Facts
Official Site Launch: August 2008
Growth in first 8 years of operation (vs. OTA):
Current Operations:
• 191 Countries
• 34,000 Cities
• 2,000,000 Listings
• 60,000,000 Users
• $25.5 billion valuation
Source: Airbnb – About Us, Reuters
03/11/2016
7
Global Airbnb growth
03/11/2016
8
Canada Listing Growth
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
Jan
-11
Mar
-11
May
-11
Jul-
11
Sep
-11
No
v-11
Jan
-12
Mar
-12
May
-12
Jul-
12
Sep
-12
No
v-12
Jan
-13
Mar
-13
May
-13
Jul-
13
Sep
-13
No
v-13
Jan
-14
Mar
-14
May
-14
Jul-
14
Sep
-14
No
v-14
Jan
-15
Mar
-15
May
-15
Jul-
15
Sep
-15
No
v-15
Jan
-16
Mar
-16
Calgary
Ottawa
Montreal
Toronto
Vancouver
03/11/2016
9
Available Room Nights
Source: Airdna (Entire Place & Census City)
Analysis completed by the Ted Rogers Institute for Hospitality and Tourism Research at Ryerson University with support from HLT Advisory.
03/11/2016
10
Airbnb Listings Available
Source: Airdna (Entire Place & Census City)
Analysis completed by the Ted Rogers Institute for Hospitality and Tourism Research at Ryerson University with support from HLT Advisory.
03/11/2016
11
Revenue Growth
Change to Vancouver & Calgary ?
0
2
4
6
8
10
12
Mill
ion
Toronto Vancouver
03/11/2016
12
Why People Choose Airbnb
Source: Phocuswright Report: From Hotels to Homes: Opening the Door to the Airbnb Traveler
22%
22%
24%
25%
26%
26%
28%
30%
33%
33%
36%
38%
0% 5% 10% 15% 20% 25% 30% 35% 40%
All acceptable hotels were booked
Treveling companions chose property
Lowest price
Prefer Airbnb
Enjoy meeting people
Most spacious among options
Recommended by friends/family
Quality of rooms or options available
Found a beautiful Airbnb, couldn’t pass up
Home-like feeling
Overall value for money
Convenient location
03/11/2016
13
Airbnb Supply & Demand Listings
Source: Airdna (Entire Place & Census City)
Analysis completed by the Ted Rogers Institute for Hospitality and Tourism Research at Ryerson University with support from HLT Advisory.
03/11/2016
14
Airbnb Listings Supply & Demand
Source: Airdna (Entire Place & Census City)
Analysis completed by the Ted Rogers Institute for Hospitality and Tourism Research at Ryerson University with support from HLT Advisory.
03/11/2016
15
Airbnb Share of Demand and Revenue
Source: STR Toronto Downtown & Airdna Toronto Downtown
Analysis completed by the Ted Rogers Institute for Hospitality and Tourism Research at Ryerson University with support from HLT Advisory.
03/11/2016
16
Airbnb Share of Demand and Revenue
Source: STR Toronto Downtown & Airdna Toronto Downtown
Analysis completed by the Ted Rogers Institute for Hospitality and Tourism Research at Ryerson University with support from HLT Advisory.
03/11/2016
17
Airbnb Share of Demand and Revenue
Source: Tourism Vancouver & Airdna Census Cities
Analysis completed by the Ted Rogers Institute for Hospitality and Tourism Research at Ryerson University with support from HLT Advisory.
03/11/2016
18
Airbnb to Hotel ADR Comparison
Airbnb Share of Market and ADR Entire Place
Hotel Airbnb Price Index
Metro Vancouver 173.86 167.64 96.4
Calgary 155.24 121.82 78.5
Greater Toronto 146.89 148.91 101.4
Ottawa 142.55 119.43 83.8
All 4 Markets 156.69 153.93 98.2 Airbnb ADR w as converted from US$ to CAN$ using monthly average exchange rates from the Bank of Canada
Market
ADR ($'s)
03/11/2016
19
Airbnb Hosts & Dynamic Pricing
Vancouver - Season Vancouver Day of Week
03/11/2016
20
New Research and Current Events
Consumer Research
Future Growth
Competitive Intelligence
Legislation
03/11/2016
21
80%
4%7%
9%
Leisure
Visiting
friends/family
Convention, conference,
major event
Business
Trip Purpose
13%
13%
12%51%
11%
Number of Guests
5+
43
2
1
2%
28%
70%
Shared space
Private
Room
Entire
Home
Type of Accommodation
Research by Guttentag, Daniel (2016) “Why travellers choose Airbnb and how do they use it?”
Consumer Research
03/11/2016
22
Future Growth
Airbnb plans to grow revenue from $900 million in 2015 to $10 billion in 2020 (Fortune, 2015)
Google “Airbnb Property Management (insert city)”
03/11/2016
23
Competitive Intelligence
Prices range from
$11 - $1,257 per night
Locations distributed
throughout the city
Access to actionable data
Impact on individual hotel
property is gradual
03/11/2016
24
Legislation
Zoning
NeighbourhoodsLaws
Airbnb
Host
Field
Professional
Estate
Unfair
FireReal
SafetyCode
Leveling
PricesHotel the
PlayingTaxation
03/11/2016
25
Vancouver
Sept. 28th CBC
Vancouver is experience a shortage of affordable accommodation
Recently announced proposal to tax empty or vacant homes
Only principal residents will be able to get a license to rent
Basement suites and laneway home would not be able to get a
license
Tenants of sub-leases can get a license with permission from the
landlord
In city council discussion this week with draft regulations early 2017
Link to Article: http://www.cbc.ca/news/canada/british-columbia/airbnb-vancouver-regulations-1.3781998
03/11/2016
26
Berlin
Zweckentfremdungsverbot
Law was passed in 2014 but came into effect on May 1, 2016
Law was in response to rents increasing 56% from 2009 to 2014
At time Airbnb represented 6.1 million room nights or about 20% of
overall room night demand in Berlin
Basic element of the law is that you cannot rent out an “entire place”
If caught, face fines up to 100,000 €
Results to Date
Law as of May 1st 2016, Airbnb removed hundreds of listings representing a 40% drop in availability on the site in one month
BUT you can still find an entire place to rent on the site.
Link to article: https://www.theguardian.com/technology/2016/may/01/berlin-authorities-taking-stand-against-airbnb-rental-boom
03/11/2016
27
Montreal, Quebec
April 2015 introduced tourist accommodation law
Anyone renting for more than 31 days in a year must
obtain $250 permit + carry $2 million of insurance and
pay nightly hotel tax (3.5% occupancy tax)
Collection and remittance of tax is the host responsibility;
collected $7.2 million from 2014-15
Results to Date
Only 41 of 10,000 listings in Montreal have paid the license fee
Inspected 267 files since starting it only 2 have been prosecuted
03/11/2016
28
San Francisco Legalized short-term rentals on February 1, 2015, Prior to this, the
city banned rentals for less than 30 days
Stipulation is that hosts needed to register and be permanent residence of San Francisco
Rentals are limited to 90 days in one year when host is not present “hosted rentals” are not subject to the limit – Hosts responsibility to track the 90 days
Only primary residence may be rented
Hosts required to obtain a permit and pay a $50 fee every two year, have at least $500,000 insurance coverage, collect and pay 14% hotel tax and comply with building code
Results to Date
Only 1,650 of 9,000 listing in Airbnb have a license
Airbnb is taking city of San Francisco to court over the new laws, claiming it violates the Communications Decency Act, which protects websites from being held liable for content provided by their users.
03/11/2016
29
Key Takeaways
Airbnb has agenda and funding for rapid growth
Key markets for growth are in business and resort
Legislation will be driven by housing issues; condo,
affordable housing
Present models of legislation are ineffective
03/11/2016
30
Links to Airbnb Reports
Airbnb and the impact on the Canadian Hotel
Industry [Link here]
The secret under the sheets, The truth behind your
next booking with Airbnb [Link here]
Airbnb: Why tourists choose It and how they use it
[Link here]
03/11/2016
31
CONTACT
KEN LAMBERT DIRECTOR at HLT Advisory Inc
Ken is a seasoned sales & marketing practitioner with over 25 years of senior management experience in the Canadian hotel, airline and tourism sectors.
Ken started his marketing career with Wardair Airlines in 1988 followed by a stint at Canadian Airlines. He then took the helm, together with full P&L responsibility, for Ottawa Tourism (1994-1996) and then the Americas’ division of Hong Kong Tourism during its tumultuous repatriation era in the late 1990’s. From 1998 – 2013. Ken served as Vice-President Marketing & Sales for Delta Hotels and Resorts.
Ken’s experience has focused in the realm of brand and tactical marketing with direct experience over a 25 year span in brand positioning, as well as hands-on execution of digital strategies and CRM disciplines including oversight of the Delta Privilege loyalty program. It is noteworthy that Ken held responsibility on behalf of the city-state of Hong Kong for all US, Canadian and South American media relations and messaging during its 1997 repatriation to China.
Currently Ken has focused, during his tenure with HLT, on lodging, tourism, meetings & conventions assignments providing strategic planning support and revenue generation strategies and tactics. Additionally, he has taken on broad based strategic roles in support of national and provincial tourism sector organizations.
416-924-8519
03/11/2016
32
CONTACT
Dr. CHRIS GIBBSProfessor at Ted Rogers School of Management, Ryerson UniversityHospitality and Tourism Management
Dr. Chris Gibbs has over 20 years of diverse sports, entertainment, travel and hospitality industry work experience prior to teaching at university. He uses this diverse experience to guide his teaching and research. His recent research looks at the use of mobile ready platforms (mobile websites, responsive website design and mobile applications) across the spectrum of hotels, destination marketing organizations and airports. Prior research has investigated the use of twitter for sports media relations, fan engagement, ethics communications and social media for hotel human resources. Beyond his academic research he has done research for a diverse group of organizations; Royal Bank, Tourism Toronto, Fairmont Hotels and Resorts and Miles Destination Marketing.
(416)-979-5000 ext 2483
03/11/2016
33
CONTACT
ORIE BERLASSOManaging Director at Big Picture ConferencesProducer for Western Canadian Lodging Conference
In her ten years with Big Picture Conferences, Orie has been responsible and accountable for the coordinated management of multiple related hospitality conferences marketed towards CEO’s, COO’s and CIO’s, presidents and owners of Canadian hotels, resorts, and restaurants.
Orie oversees the day to day operations of BPC, directing staff and suppliers with respect to accounting, marketing, and logistic procedures. Past experience includes Sales and Marketing management at the Metro Toronto Convention Centre.
(416) 924-2002 x229
03/11/2016
34