Airbnb’s Influence on Hotel Occupancy Threatens Industry Profits

Business Travel News says a report from Morgan Stanley Research suggests that a decline during 2016 in the number of compression nights at U.S. hotels could indicate a significant threat to the industry from alternative accommodation providers like Airbnb.

Last year, compression nights, defined as nights when hotel occupancy is greater than 95 percent, fell 17 percent year over year among the 25 U.S. markets with the most hotel rooms. That is the first time that’s happened since 2009. Additionally, though occupancy remained more than 1 percent higher in 2016 than in 2014, compression nights dipped 8 percent below 2014 levels.

But are Airbnb and its counterparts to blame for fewer compression room nights? The signs point to yes, according to Morgan Stanley.Morgan Stanley found that Airbnb use rose from 12 percent of travelers in 2015 to 18 percent in 2016. That trend, the firm says, is expected to continue in 2017.

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