- Online travel portals Expedia and Priceline are moving into the home-sharing business with new inventory that lets consumers book a room in a home as easily as a hotel, according to a report in The Wall Street Journal.
- Travel industry research group Phocuswright found that, even though the home rental market's revenue is around one-fifth the size of that of hotels, it's grown far faster since 2015, per the Journal. The U.S. private accommodation market, including short-term vacation rentals, homes and rooms, grew 11% in 2016 compared to the hotel industry's 5% growth, the publication said. It's expected to grow another 8% this year to over $34 billion.
- While Airbnb leads the home-sharing sector, both Expedia and Priceline are showing more home-based rental options next to hotel listings on their platforms. Priceline has increased its inventory by 50% in the last year, and Expedia's 2015 acquisition of HomeAway, a platform similar to Airbnb, provided it with 1.4 million listings of this kind.
Airbnb has been active in marketing innovation and business expansion far beyond booking and listing rental spaces, evolving into a formidable player that's proved incredibly disruptive to the hotel industry. Late last year, Airbnb launched a Trips platform that offered more comprehensive travel planning, with a focus on highlighting unique local experiences. A month later, it was reported that the company was dabbling in the flight-booking business — another potential blow to the likes of Expedia, Priceline and Orbitz — although the feature is still in the planning stages.
As Airbnb has experienced strong growth — and steep valuations — more veteran online travel players like Expedia and Priceline have continued to be hurt by sluggishness in the hotel booking sector and are now clearly trying to leverage their more established businesses to push back. Overall, the maneuvers from all three companies illustrate how the home-sharing and private accommodation market is maturing. One reason for this is likely due to improvements in mobile and digital technology, including more seamless browsing and booking experiences on smartphones and improved mobile payment options.
As top competitors follow suit and the market grows increasingly crowded, Airbnb needs to continue to innovate and enhance the entire travel experience to maintain its rapid growth and position as an industry leader.