Hotel Market Share Collapses as ‘Share Economy’ Bookings Double

Hoteliers, stand aside. New stats from Tourism Research Australia show it’s not a question of if but when your mantle as the top provider of accommodation to international tourists will be passed to the thousands of Aussie individuals and businesses who are marketing their short-term rental play through the likes of Airbnb and HomeAway.

The share hotels, resorts and motor inns have of the international visitor market to Australia has collapsed 63% over the past 12 years, according to the latest International Visitor Survey from Tourism Research Australia. 

Back in the old days – 2005, to be precise – traditional operators accommodated 18% of international travellers, but by 2017 that share in a growing and increasingly competitive market had dwindled to just 11% (29.2 million visitor nights).

How can this be, you ask, when certain hotel markets such as Sydney are growing fast in terms of capacity and yet can barely keep pace with the influx of international visitors, 25% of who are now Chinese!

The issue is that sure, there’s growth, but it’s like comparing a cheetah to a house cat.

In 2017, there was 1% overall growth in the hotel/resort sector at a time when the number of international visitors to Australia rose 6%.

That is a huge and growing gap.

Hotel/resorts are way, way off the pace, growing at one-sixth the speed of the total international tourism market to Australia.

Meanwhile, international bookings through Airbnb, HomeAway etc grew 100% in 2017 compared with 2016.

In very dry terms TRA says: “Other private accommodation has reached 20 million international visitor nights and represents 8% of all international visitor nights,” says the TRA.

“Much of this growth is through increases to bookings via sites such as Airbnb.

“The number of international visitors using these sites to book accommodation has doubled during the last year and now represents 1 in every 12 visitors.”

Very clearly, this is why hotels/resorts want government to curb the rise and rise of short-term accommodation.

It’s more than a threat.

Within a few years, at present growth rates, and there’s no reason to think they’ll change, more international visitors will be staying in a holiday apartment rather than a hotel.

Game over.

That said, it may come as a surprise to discover that TRA says the strongest growth in visitation to Australia through 2017 was across the education and VFR sectors.

“This can be seen through significant increases in nights spent at the home of a friend or relative and in rented apartments, flats and units and other private accommodation dwellings,” the report says.

“Nights at the home of a friend and relative increased 6% to reach 79.7 million, and now accounts for 30% of all international visitor nights spent in Australia.

“International visitor nights spent in apartments, flats and units increased 5% to reach 103.1 million nights.

“This accommodation type now accounts for 39% of all international visitor nights, increasing from a 28% share in 2005.”

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