Airbnb usage slowing, OTAs should seize opportunity

Adoption of Airbnb has started to flatten sooner than some analysts have expected, with online travel agencies tipped as likely beneficiaries.

In a report issued by Morgan Stanley, usage of the private accommodation sharing service increased by only 330 base points to 25%, down from 800 base points in 2016.

Awareness of the brand is also "topping out," according to the paper, with the U.S. and Europe hitting 80% but slowing to only 800 base points compared to 2,000 base points the previous year.

The slowing of awareness for Airbnb is, conversely, bolstered by an increase in the barriers to people using the service, mainly around concerns over privacy and safety.

The figures from Morgan Stanley follow a similar trend previously noted by Phocuswright, with its own research showing rental accommodation usage across U.S. and European travelers going up moderately between 2015 and 2017, after several years of rapid growth beforehand.

In the U.S., for example, overall usage increased by just three percentage points to 29% over the period.

The impact on growth from safety/privacy angle could be a reflection on two important points, Morgan Stanley suggests:

1. Airbnb and the wider private accommodation sector "could be more niche" than previously anticipated.
2. Activities of opponents and well-funded lobbyists could be working.

The report says, as a result of the new analysis, it is scaling back its forecast for overall growth at Airbnb from 9% to 6% of the overall accommodation pie in the U.S. and Europe.

It's not all doom and gloom, however, with Airbnb and online travel agencies understood to be only two channels with any growth year-on-year.

Airbnb is forecast to generate some 155 million room nights in the U.S. and Europe during 2018, up by 14%.

Yet, OTAs - with a long-standing and resilient model which keeps investors and analysts happy (recent stocks moves notwithstanding) - are tipped to make the most of the flattening of growth at Airbnb.

The report says:

"We see the OTAs strong use trends, paid search/traffic acquisition expertise and improving inventory offerings (more alternative accommodations) becoming a growing threat to Airbnb, as the OTAs, in our view, are better positioned to act as the online travel one-stop shop."

Morgan Stanley notes the activities of both Expedia Inc and the Priceline Group in recent years, as both mount rearguard action to the previously rapid rise of Airbnb by a combination of acquisition (HomeAway to Expedia Inc) and drive to increase supply of private accommodation (massive influx of inventory to Booking.com).

Private accommodation currently outnumbers the volume of traditional hospitality choices on Booking.com.