Airbnb May Force Hotels to Lower Prices
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Airbnb May Force Hotels to Lower Prices

© Eric Nathan / Alamy

Travelers today have more choices than ever before on where to stay and how to book. This proliferation of options could soon lower prices across the board. As Airbnb’s listings grow in destinations around the world, hotels may be forced to lower their prices to continue to attract guests, analysts suggested after crunching the data on room growth.

Airbnb’s listings are expected to increase by up to 50 percent in the coming year and make up 3.6 percent to 4.3 percent of lodging inventory by 2020. There are currently more travelers looking for rooms than there are rooms to house them, but that dynamic could change as soon as 2017, when there will be more room options, between hotels and Airbnb, than there is demand, Merrill Lynch analysts found. That means more competition for hotels and lower costs for consumers.

This will especially been seen in large U.S. cities such as New York, San Francisco, and Chicago where hotel prices traditionally run higher. These are also places where more and more Airbnb properties are being put online.

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