KPMG: Airbnb gains momentum

In recent years, the Airbnb platform has gained momentum, affecting the hospitality sector worldwide.

According to Cyprus Hospitality Report issued by KPMG, in Cyprus, individuals select Airbnb accommodation both for leisure and business purposes. Bookings through the platform increased significantly by 68,9% over the past year. Net room occupancy rate in 2018 amounted to 52%; lower compared to the average of 70% of hotels and other hospitality establishments.

Airbnb has emerged as an opportunity for many individuals to commercialize their private property, as in recent years many residential properties where acquired and then converted into short-or-long-term rental properties. This phenomenon has been observed to be prevalent in the costal fronts of the island.

Peer-to-peer platforms have proven to be an immediate substitute product to traditional hospitality offerings whilst its effect in the Cyprus hospitality sector remains to be seen given the limited information available to date and the fact that such platforms are in the early stage of their life-cycle.

With the change of end user tastes and the rise of ‘Millennial’ travellers and continuous technological innovation, the growth of peer-to-peer accommodation is anticipated to continue over the medium term.

The average nightly price for Airbnb varies across the region; in Cyprus, for instance, the average price is €70. This represents a significant substitute threat to traditional hotel operators, which are reacting by rolling out brands to attract millennial consumers who typically favourAirbnb.