Airbnb may put lid on hotel rates during U.S. political conventions
By Laila Kearney
NEW YORK (Reuters) - This year's U.S. Republican and Democratic conventions may prove what hotels have long feared: They could lose a consistent windfall to Airbnb and other home-sharing services.
Normally, hotels would be cashing in on the combined 100,000 people expected to flood Cleveland for the Republican presidential nominating convention next week and Philadelphia for the Democratic gathering July 25-28.
But because of what hoteliers call "shadow inventory" from home-sharing brokers, they may not be able to get the convention-week markups they collected in the past, and that could foreshadow a rate-shaving trend as peer-to-peer rentals grow.
Airbnb, which expects 5,400 rentals for the two political conventions, is also helping people find lodging in Brazil in August for the Summer Olympics, the next big event to watch.
Jeremy Adkison, a 28-year-old delegate to the Democratic convention, said he decided to try Airbnb because he thought a hotel would cost too much.
The Emporia, Kansas, resident paid $442 for a five-night stay at a townhouse near the convention site.
Hotel rooms are still available in Philadelphia, albeit at those higher rates Adkison sought to avoid. The Marriott Courtyard Philadelphia, for example, is advertising rooms for $989 a night, triple its normal rate.
This is not out of the question for what the trade calls a "compression" period. These times of peak demand, typically associated with a nearby event, contribute 25 percent to 30 percent to hotels' annual profits. Continued...