Is Airbnb affecting hotels in Sydney? New report reveals the truth…

Sydney's hotels were 85% full in 2015
Sydney’s hotels were 85% full in 2015

Airbnb’s presence in Sydney is growing, but it does not appear to be having a significant impact on the city’s hotel performance, a new report has revealed.

STR this week revealed the results of its analysis of the Sydney accommodation sector, comparing its own hotel performance figures with data obtained from Inside Airbnb, a third party company that pulls information from Airbnb’s website.

And as with a recent analysis of Airbnb’s impact on the New York hotel sector, STR found that the mainstream accommodation sector has not been greatly affected by Airbnb’s presence in the market. It did state however, that Airbnb appears to be benefitting from a lack of available hotels outside the city centre.

“Our international experience says that in general, Airbnb units are more prominent as a percentage in suburban locations,” said Matthew Burke, STR’s business development manager for the Pacific region.

“The location of hotel and Airbnb listings may also talk to the traditional nature of travel, be it for work or leisure. As consumers become more intrigued by ‘living like a local’ in the suburbs with sufficient amenities, Airbnb rentals may become a more desired source of location for both leisure and business travellers.”

There are 16,149 Airbnb units listed in Sydney (image by d8nn)
There are 16,149 Airbnb units listed in Sydney (image by d8nn)

As of 3 January 2016, Inside Airbnb listed 16,149 Airbnb units in Sydney. Sixty-one percent of these were entire homes or apartment units, while 38% were private rooms and 1% shared rooms.

STR’s analysis only accounted for listings that could be considered competitive with traditional hotel rooms, narrowing the sample size of 5,385 listings. For year-end 2015, Sydney’s hotel market featured 39,096 rooms across 358 properties.

In terms of price distribution, 50% of hotel units had an ADR below AU$200 (approx. US$151), compared with 54% for Airbnb. The majority of Airbnb listings fell between the AU$100-148 range. For traditional hotels, most available rooms fell into the AU$150-199 range.

Sydney’s hotels finished 2015 with an occupancy level of 85.3%, a 4.4% increase compared to 2014.

And STR noted that while Airbnb’s impact in Sydney isn’t strong at present, it could increase if the city’s hotel  occupancy and ADR remain high.

“Hoteliers, with continued high occupancy levels being forecasted, are focused on rate growth, which may cause consumer price ceilings to bring Airbnb forward as an option,” Burke said. “To date, hoteliers are continuing to see their occupancies grow. But that growth is slowing with a majority occurring outside of the central business district.”

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