THE rise of shared accommodations in the Asia Pacific region poses a threat to the hotel industry as many tourists prefer Airbnb rentals due to lower rates, according to a report by a global real estate advisor.
In a report, CBRE noted that despite the strong number of tourist arrivals into the region, the traditional hotel industry faces new market competition with the rise of shared accommodation platforms such as Airbnb.
“Advances in technology have made it possible for hosts to offer rooms or apartments for short-term rental via online platforms,” CBRE said.
Airbnb is the largest player in the shared accommodation industry as it is present across 191 countries with more than 2 million rooms or apartments for rent.
Other active providers include HomeAway, FlipKey, and Rommorama.
“The main competitive advantage of Airbnb is the lower price,” CBRE said.
It emphasized that the average daily rate for a one -bedroom entire-place type accommodation is 200 percent lower than that of daily rates that hotels offer in a number of Asia Pacific cities including Manila, Jakarta,Guangzhou, Shenzhen, Taipei and Ho Chi Minh.
CBRE noted that the number of rental properties listed on shared accommodation platforms has been growing in the Asia Pacific region.
According to data from STR Global and Airdna, there are over 130,000 active rentals or Airbnb listings that have been used within the last 30 days in 25 major Asia Pacific cities as of August of this year.
Australia saw the largest number of active rentals at 28,000, followed by Japan with 20,493 and Indonesia with 16,295 active rentals.
CBRE noted that at present, around 60 percent of active Airbnb rentals are for entire apartments, which account for around 2 percent of the hotel room supply in Asia Pacific.
“The ratio is highest in Manila, where Airbnb supply is equivalent to 70 percent of the city’s hotel room supply, which stands at just 8,000 rooms,” CBRE said.
In a separate report by Jones Lang Lasalle, it noted that listings for Airbnb currently account for 5 percent of total room inventory and around 2 percent of occupied room nights in Southeast Asian cities such as Singapore, Bangkok and Kuala Lumpur.
This is expected to grow in coming years driven by the more affordable rates it offers.
“We expect the number of listings to grow to 15 percent of total inventory and 5 percent of occupied room nights by 2020,” JLL said.
Moreover, CBRE noted that aside from the lower rates that shared accommodation offers, other selling points of these properties are the free amenities it offers such as washing machines and kitchens, which are rarely offered by traditional hotels.
Also, Airbnb features unique experience and unconventional accommodation, which traditional hotel groups have not ventured into yet.
“Users can stay in local neighborhoods away from traditional tourist areas and even stay in unusual places such as tree houses or yurts,” CBRE said.