Airbnb, an online service that allows travelers to stay in unique places around the world is now becoming a big threat in the hotel and accommodation industry. Like how Uber is taking most of the share in the taxi and public transportation industry, Airbnb has already gained multi-billion dollars in short-term accommodations, greathly hurting and affecting hoteliers and the hotel industry.
The hotel industry believes that Airbnb is a growing grey market in the accommodation industry. As indicated in reports by Australia's News.com, the hotel industry is bound with a lot of legislations and regulations. Everything is checked and balanced, and they run their business "by the book."
Airbnb short-term rentals, on the other hand, do not undergo regulatory processes, consumer protection programs, taxes and other legal frameworks, creating a loophole in the "legality" of the service. Airbnb itself may practice these legislations, but the hosts that use the service may not completely adhere to the said standards.
Hotel owners apparently believe that they are the ones that should gain the most profits out of the economy and that Airbnb, which operates under the radar, shouldn't be taking clients and in turn profits away from them. Safety of the consumers is also reportedly compromised with such unregulated services.
Meanwhile, Airbnb has already managed to raise a huge fund of $1.5 billion back in June and file necessary paperworks with the US Securities and Exchange Commission. This makes Airbnb the third most valuable privately held startup, with Uber on the top spot and Xiaomi on second, Wired reports. However, Airbnb declined to reveal its revenue range in its filing with the SEC.
The hotel industry is indeed feeling the pressure and the threat that startups like Airbnb pose against their services. A growing concern on whether Aribnb is posing the risk of creating a grey area in the hotel and accommodation market is also expected to be highlighted in the future.
