NEW YORK CITY—Barring a successful regulatory push to modify its business model, the coming year could see Airbnb accommodating as many guests as some of the best-known hotel brands, DBRS Inc. says in a new report. “While hotel fundamentals are currently healthy and delinquency rates are low, 2018 is looking to be the year of the short-term rental industry,” according to DBRS.
Airbnb—which is only the most familiar of a number of crowd-sourced lodging services—will continue to be bolstered by factors including “celebrity endorsements, a trendy image among Millennials, ease of use and self-entrepreneurial capabilities,” the report states. “Next year will be the year of the alternative hospitality service.”
A key reason for this prediction is the growth that Airbnb has managed, at low cost. “Unlike the hotel industry, which requires substantial periodic investment to renovate assets and develop properties to remain competitive, the Airbnb business model requires comparatively little capital investment,” according to DBRS. “Instead, it rests on the successful recruitment of everyday people to host guests in their own homes, expanding the supply of rooms simply through an increase in home listings.”
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