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Hotels were looking to cash in during the papal visit, raising prices to capitalize on the increased demand. Instead, Airbnb, with its thousands of listings, threw a monkey wrench into those plans, leading to hotel complaints that Airbnb "siphoned away" business during Pope Francis’ historic US tour.
Hotels rely heavily on one-time or annual events to get the highest rates of the year, but with Airbnb around, analysts say, hoteliers are finding it harder to maximize their profits. "It’s sapping their pricing power," Fitch Ratings hotel analyst Stephen Boyd says.
In NYC alone, Airbnb posted nearly 20,000 listings, a 17% increase of lodging space. Philadelphia had a 16% increase with about 7,000 Airbnb listings. The Pope's case isn't isolated, either. A similar situation occurred during the Kentucky Derby in Louisville and again in Palm Springs with music festival Coachella.
Still, hotels are doing just fine. US hotel average daily rates, occupancy levels and revenue are near all-time highs. [WSJ]
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