“While theres a lot thats been stated in regards to the conventional lodge business bemoaning the brand new home-sharing financial system, the very fact stays that, firms like Airbnb who dynamically mix tech and journey usually are not for lodges to worry, even because the rental room big continues to take pleasure in fast development in Africa,” says Wayne Troughton, CEO of specialist hospitality and actual property consultancy agency, HTI Consulting.Talking in September this yr, Chris Lehane, Airbnb World Head of Public Coverage and Public Affairs shared the potential development alternative for African journey, which can account for 8.1% of African GDP by 2028. In South Africa, journey is forecasted to ship 10.1% of GDP in 2028. “Any addition to lodging choices out there in South Africas burgeoning vacationer market in South Africa can add worth”, says Troughton. “And, with Airbnb primarily focused on the leisure market, its traditionally proven little influence on the company section. It’s also addressing new demand not catered for by the lodge business by offering lodging to friends who in any other case cant afford a room in a specific market; and is including room capability in congested markets.”Since Airbnbs founding, 3.5 million friends have arrived at listings throughout Africa as an entire, and a pair of million friends have arrived at listings on Airbnb in South Africa, with roughly half of those arrivals occurring in simply the previous yr. The African continent additionally options three of the top-e ight quickest rising international locations for visitor arrivals on Airbnb (Nigeria, Ghana and Mozambique). There isn’t any doubt that, domestically, the variety of leases related to Airbnb is rising. Taking Cape City for example, Airbnb leases elevated from 10,627 whole leases cumulative in 2015 to 39,538 whole leases cumulative YTD 2018. “That is extraordinarily optimistic development and there’s no doubt {that a} portion of those leases have displaced demand from lodges,” says Troughton. “It is necessary to notice, nevertheless, that a big proportion of those leases usually are not out there yr spherical. Air DNA signifies that solely 12% of Airbnb properties in Cape City (approx. 1,970 properties) can be found for rental 10 – 12 months of the yr. The bulk (48%) are solely out there for rental 1 – Three months of the yr, he explains. Its extremely possible that many of those properties are let over peak vacation intervals resembling Christmas/Easter when lodges in Cape City are alre ady full and working at premium costs.””As well as a proportion of those leases are leases of homes and residences that are set free by house owners over the height season and lease their homes or residences as a method to fund their holidays or a method to generate extra money. Moreover, solely studio and one bed room items are more likely to compete straight with lodges for brief time period vacationers and these solely characterize 38% of whole Cape City leases.”Troughton additionally factors out that, while the variety of Airbnb leases in Cape City have elevated lately, occupancies for lodges within the metropolis have grown at a CAGR of three.3% between 2012 and 2017 regardless of Airbnb growth, adjustments to visa legal guidelines, impacts of the Ebola virus and a rise of 1000+ rooms within the metropolis. Together with the optimistic occupancy development, charges have additionally elevated at a CAGR of 10.7% over the past six years, he says. Though Airbnb leases have elevated considerably in Cap e City this doesn’t essentially imply that the variety of rooms out there for rental have elevated to the identical extent, as rooms listed on Airbnb are listed on different websites and thru otheragents and different channels as effectively and a proportion thereof had been listed earlier than the launch of Airbnb says Troughton.”An evaluation of the variety of leases in Johannesburg confirmed a smaller uptake within the Airbnb development,” states Troughton. “Complete cumulative leases elevated from 1,822 in 2015 to 10,430 whole cumulative leases YTD 2018,” he says. “The enterprise nature of journey to Johannesburg is more likely to be one of many stronger influencers of lodge demand.””While Airbnb is undoubtedly gaining a portion of lodge friends, that portion is not almost sufficient to unseat conventional lodgings. Moreover, not solely are firms like Airbnb delivering actual revenue and employment to native communities, theyre additionally serving to to bolster nationwide tourism economies,” Tro ughton feedback, “and proving helpful to second tier locations resembling Durban, Hermanus, Plettenberg Bay and George.”When evaluating the Airbnb providing with that of conventional lodges its necessary to notice that location is constantly rated a very powerful consider lodging buying choices. Most lodges have a bonus with central places and quick access to transportation with vacation rental maps usually look very like a doughnut across the heart of town.”Facilities are one other consideration,” says Troughton, “whereas some vacation leases might have a swimming pool they’re unlikely to have services resembling a spa, children membership or restaurant.”There are different points we must also have in mind. For one, take into account the ability of loyalty programmes as a means of retaining and rising enterprise. Marriott Rewards, for instance, the most important loyalty programme on this planet, brings a possible 100m vacationers to i ts lodges. The members usually are not more likely to forego their Reward factors in favour of one other sort of lodging providing.”The native lodge business can actually be taught from the likes of Airbnb although,” says Troughton. “Earlier this yr, Airbnb named Cape City amongst 13 cities globally that might pioneer Airbnb Plus, a hotel-like tier of properties verified for high quality and luxury, impressed by a few of Airbnbs greatest hosts and houses. A part of Airbnbs success has been its providing of related and personalised experiences that make travellers really feel like an area. And since personalisation is a rising development in our business, there’s something to be taught from this shifting ahead.”Airbnb have additionally lately signed a collaborative settlement with Cape City, the primary in Africa, to work with the Metropolis to advocate the advantages of people-to-people tourism for Cape City residents and communities, and promote Cape City the world over as a singular journey vacation spot .”Total, Airbnb performs a task and fulfills a necessity within the leisure section, and the part-time gross sales section, serving to to bolster room nights throughout peak intervals. Nevertheless, we dont see it as a direct menace to lodges, which offer a special providing and extra intensive listing of providers higher suited to and extra acknowledged by shot time period vacationers and people visiting a metropolis for the primary time,” concludes Troughton.

ContactHTI ConsultingPhone: +27 21 685 0635 Ship E-mail

About HTI Consulting
Hospitality and Tourism Worldwide Consulting “HTI Consulting” is a distinct segment, specialist hospitality, mixed-use, actual property and leisure centered consulting firm shaped in 2003. To-date greater than 400 assignments have been accomplished protecting 43 international locations in Africa and the Center East. HTI Consulting have current expertise in Addis Ababa, Accra, Benin, Cape City, Dar es Salaam, Dakar, Gaborone, Lagos, Lusaka, Monrovia, Nairobi, Pretoria and Sandton the place we have now lately undertaken Market and Monetary Feasibility Research, Market Evaluation, Valuations, Due Diligence, Brokerage and Operator Choice. For extra info on these and different providers please contact HTI Consulting: [email protected] or +27 21 685 0635 or go to www.hticonsulting.co.za

Airbnb a Menace?Markets & PerformanceSouth Africa