“Across Europe, alternative accommodations are not a new phenomenon; pensions, pub accommodation, hostels and family stays have long existed,” said Elizabeth Winkle, STR Global’s managing director. “What has changed is the distribution platform providing an accommodation owner the means to easily and seamlessly list and let their property (or properties) connect to guests. Airbnb is one of the most recognizable of these ‘peer-to-peer’ or ‘rental-by-owner’ companies, and its inventory continues to increase across the globe.”
STR Global’s analysis also showed Airbnb’s inventory to vary by borough in London, and on average, rates for Airbnb units to be higher than those of hotels in London. STR’s and Airbnb’s market definitions of London include some locations outside of the boroughs, but for the purpose of the analysis, all properties not in the boroughs were excluded.
As of 3 September 2015, Inside Airbnb listed 25,361 Airbnb units in London, 52.6% of which were entire home/apartment units. The remaining Airbnb inventory in the market comprised 45.8% private room and 1.6% shared room.
Based on criteria such as type of unit, date of last review, total reviews and other miscellaneous factors, STR Global narrowed the sample of Airbnb listings to units competitive with traditional hotel rooms.
With those criteria in place, STR Global showed an estimated 11,000 Airbnb listings in London, compared to some 134,000 hotel rooms in the London boroughs. Provided all Airbnb listings and hotel rooms are available the same number of nights, that gives Airbnb a roughly 8% share of the market. The study does note, however, that Airbnb listings and hotels are often not available the same amount of nights.
When looking at the overall number of hotel rooms and Airbnb listings by borough, Westminster holds 27% of all London hotel rooms and 17% of all Airbnb listings. The three largest boroughs (Westminster, Camden, and Kensington and Chelsea) combine to hold 51% of London’s hotel supply and 38% of Airbnb’s listings. Notably, 11% of Airbnb’s London listings are in Hackney, while only 1% of hotels reside in the borough.
In terms of listing share by borough, Lewisham holds the largest share of Airbnb listings, with 49% Airbnb listings and 51% hotel rooms in the borough. Hackney also has a large portion of Airbnb listings at 42% of all rooms in the borough. In 20 of the 33 London boroughs, the ratio of Airbnb units to hotel rooms is around or less than 5%.
Airbnb units are offered at a wide variety of price points. In 22 of the 25 boroughs with sufficient rate information, the average Airbnb rate is higher than the prevailing hotel average daily rate. Conversely, the hotel ADR in Westminster is GBP42.00 higher than the Airbnb average rate. Hackney and Lambeth, the other two boroughs with higher hotels rates, show hotel ADRs of GBP16.00 more than the Airbnb average listing price.
The distribution of hotel rooms and Airbnb listings by price follows a similar pattern with the bulk of the listings around the low to mid-priced options. The majority of hotel rooms and Airbnb listings fall in the GBP100.00 to GBP199.00 price range with 45,000 hotel rooms (46% of all hotel rooms) and 5,800 Airbnb listings (52% of all Airbnb listings). Airbnb’s largest share of total accommodations falls in the GBP300.00 to GBP399.00 price range with 12% of all listings/rooms. Airbnb’s share of total accommodations is reduced to 3% for the less than GBP50.00 and more than GBP500.00 price buckets.