Sun | Jan 21, 2018

Sharing economy impacting traditional hoteliers

Published:Thursday | February 9, 2017 | 1:16 PM

Janet Silvera, Senior Gleaner Writer

The rise of the sharing economy and additional hotel room stocks are having a noteworthy impact on the revenues collected by traditional hoteliers in the region.

“The average daily rate (ADR) fell by less than a dollar to US$201.50 and revenue per available room contracted by 2.6 per cent to US$ 134.48 while occupancy fell by 1.6 percentage points to 66.7 per cent in 2016,” says Ryan Skeete, director of research and information technology at the Caribbean Tourism Organisation (CTO).

This fall in revenue comes even while the region marked another record setting year of welcoming over 29 million arrivals.

Skeete was addressing the media this morning during the State of the Industry press conference in Barbados.

According to him, the findings reflect the rise of the sharing economy and additional hotel room stock.

The sharing economy is run by companies such as Airbnb, VRBO, Uber and Snapgoods.

The CTO official noted that the improvement in arrivals to the Caribbean was not reflected in improved hotel performance. Quoting research information released by Smith Travel Research, he said the primary revenue metrics were slightly down.

Airbnb, a simple idea, which is a form of matchmaking between travellers and individuals with a spare room or rooms, offers a visitor somewhere that is cheaper than a hotel, while providing a genuine sense of place and experience of the country they are visiting.

“So successful has this simple idea become that the company, which only started in 2008, now has around two million listings globally in 34,000 cities and 191 countries,” the UK based David Jessop, wrote in The Gleaner’s Hospitality Jamaica late last year.

According to the CTO Airbnb have approximately 40,000 listings in the Caribbean.

“We don’t know how many rooms that represents. There are a lot of cross listings. We are currently carrying out our research,” Skeete told the gathering.

In fact, the big debate CTO’s secretary general, Hugh Riley admits is how to capitalise on the economic impact the sharing economy is having on the tourism sector.

Having signed a recent Memorandum of Understanding with Airbnb, he said the CTO was now looking at regulatory and security considerations.

“What we do know is that the market is changing and this change is being pushed by consumers, who are looking to immerse themselves into the various communities.”