As the sharing economy continues to grow in popularity, that could impact the accommodations industry. The concept of Airbed and Breakfast has become popular throughout the World. Because of this emerging trend, companies are seeking ways to adapt.
The hotel industry is implementing new policies in hopes of attracting new investors. New ancillary companies are offering people new services and different ways to travel. Thousands of new jobs are being created. However, many governments are also trying to figure out how to regulate the benefits that arise from the accommodations.
Other companies are trying to reject the changes, which many analysts feel is a mistake. The majority of analysts believe that the accommodations industry will continue to expand. Millennial travelers will have a huge influence on the growth. As different types of travel merge together, business models will evolve. Ancillary industries will make a huge impact.
The sharing economy is accelerating. Companies such as Booking Homes and Agoda are quickly finding success. Analysts point out that the host market is growing at double the rate of the global economy. Total revenues from around the World are expected to be well over $100 billion. People are continuously using host rentals.
Investors have taken note, and are putting lots of money into the short term rental sector. Investors such as Capital To Day and Morningside Ventures have recently made large investments. Nlido created a new program that allows tenants to rent out their units, Asia is a thriving market, with China, India, and Thailand having the largest percentage of residents that are willing to share.
Millennials Are Driving The Trends
According to the data, business travelers spent over a trillion dollars last year. Many companies are offering programs with features such as self check in. The programs also have flexible cancellation policies. Analysts predict that people will continue merging business and leisure travel in the future. Millennial travelers are enjoying these new experiences.
Research shows that millennials are more likely to extend their stay to experience more of the culture. Millennials are also known for traveling for longer periods of time compared to others. They use online travel agencies to find good rates and also research peer reviews before making a decision. Asia has billions of millennials, which is one reason why the market is thriving over there. The environment also plays a role, as many millennial travelers prefer shared accommodations because they are more eco-friendly compared to hotels.
Short term rentals and hotels are becoming interchangeable. Some analysts believe that large global brands may eventually dominate the market. Hotels are adjusting. Locally curated hotels are being developed, and leisure spaces are getting added to established brands. Vacation rentals are also evolving. Apps such as Glamsquad and LuggageHero have been created primarily for vacation rentals. We Work provides office space along with amenities such as free refreshments and communal spaces.
While the sharing economy model has benefited the business world, the real estate industry is struggling to adapt. Many companies are being forced to pay for space that they only use half of the time. The real estate industry is one example of how unpredictable the effects of the sharing economy will be in the future.