The next years promise to offer a fascinating duel between two very different type of internet giants in a quest to own the $555-billion global accommodation market. Challenger Airbnb, posterchild of the Sharing Economy, is striking hard and fast to become the new King, but current leader seems well suited to extend its phenomenal growth track for another decade. Who has the better cards to win the game?

The lines between private and hotel accomodation are blurring. Phocuswright most recent study among Airbnb bookers showed that the key drivers for booking a privat accommodation were the same than for hotel bookers: price and location (meet local people and experience local culture ranked 3rd and 4th respectively).

Airbnb seems to have acknowledged this fact and is pushing forward major transformational changes that were announced with great fanfare these last weeks:

“Our competition is two companies –  Expedia and – and I’m extremely excited about what the next ten years have in store.”

To date, Airbnb already offers more than 24,000 boutique hotel listings on the platform. This might only represent around 5 percent of their 4.5 million listings, but they are 100% instantly bookable. 1.9 million properties were available for instantly booking out a total 4 million listings in August 2017, and the company claimed that 70% of all new listings were using this facility (most likely spurred by the fact that share of hotels and Bed-and-Breakfast newcomers is higher than individual properties). We can deduct that the total number of instantly bookable properties on Airbnb today is likely to be north of 2.2 millions, hotel inventory representing aprox 10% of the total.

Despite boutique hotels being typically smaller than traditional hotels, the room capacity of these type of lodgings will still in average more than double the number of rooms offered by private accommodations. Therefore it seems reasonable to assume that the weight of hotels exceeds 20% of the total Airbnb instantly bookable room inventory. leading the pack

Meet, current worldwide leader in the online accommodation sector with over 1 million room nights booked per day. They consistently outperformed the entire industry during the last decade thanks to the flawless execution of a simple but super-efficient formula:

  • Maximizing the onboarding process for all type of lodging properties to offer the largest choice of accomodations
  • AB test to death the booking funnel to maximize conversion
  • Laser focused optimization in Search Marketing allowing them to efficiently outbid the rest of competitors

Each of these success factors re-enforced the other ones, creating the most powerful booking platform of the industry.

The clash of titans

The same way that Airbnb is making a foray into the hotel sector, has gradually expanded its footprint into the vacation rental sector during these last years.

In the prepared notes of Bookings Holding Q3 earning call, CEO Glenn Fogel stated:

aggressively expanding our vacation rental business is a key part of our growth strategy. As consumers increasingly desire to explore more unique places to stay, including homes and apartments, we want to remain to be the leading platform to search and book all types of accommodations

In the latest Q4 earning call they announced that by the end of 2017 listed over 1,200,000 vacation rental properties, which represented a 53% year-over-year growth

Compared to Airbnb 1,980,000 instantly bookable properties (assuming the rest are hotels), has an aprox. 700,000 property gap to cover if they want to compete head to head against Airbnb in the inventory game.

This seems to be a key strategic goal for the company, as they highlighted in Q3 earnings call:

“We’re also making significant investments on the IT side. So we’re adding teams of people under our booking home umbrella, and they’re focused on improving the experience with property owners, including individual property owners that are putting their apartment or home up for rent, to make it a more intuitive experience, easier for them to self-signup and improve efficiency that way.”

Assuming they can keep up a 50% YoY listing growth in private accommodations, it would take them little more than a year to catch up with Airbnb current offer.

The winning cards of each contender

Airbnb´s CEO argues that his company has the upper hand in this race thanks to their unique home sharing content, a passionate travel community and a one stop shop travel app offering homes, experiences and restaurants. On the supplier side, Airbnb´s lower commission structure of 3% to 5% should make them an attractive distribution channel for homeowner and hotels in comparison to the likes of who charge in average between 15% to 20%.

All of them seem valid points, but let’s dig a little bit deeper if these assets are sustainable in the long run.

The inventory game:

With 4.5 million properties, Airbnb beats all its competitors in number of listings. But, with teams in 198 offices around the world focused on contracting and their well-oiled onboarding process, will likely close the gap on the most valuable part of the inventory, which are instantly bookable properties.

Many homeowners will diversify the risk by listing their properties among the 2 to 3 sites that guarantees them enough leads to maximize occupation. As long as is part of this shortlist, the private accomodation content of both players will increasingly overlap.

Airbnb latest moves will strongly increase their inventory in the near future but the largest part will be Bed-and-Breakfasts and Boutique Hotels that in many cases are already present in

The increasingly strict city regulations for short rentals across the world poses a serious risk in the inventory game too. According to the Financial Times in the UK only it represented a loss of $100 million last year and this recent article showcases the example of San Francisco where Airbnb lost over 50% of its listings between Aug17 and beginning of 2018. This trend will impact Airbnb to a higher degree than, who has been cautious in playing by the local rules in this area.

Brand strategy: rational vs emotional

Airbnb has managed to build the first truly lifestyle brand in the online travel industry thanks to their unique content and their design driven focus through the entire customer journey. This strategy has paid off with a loyal community that connects with Airbnb values at an emotional level.

Will the brand premium they currently command against other industry players such as be sustainable over the next decade? Certain facts seem to play against them:

  • their key strength, the uniqueness of their lodging content, is gradually getting diluted
  • new products additions that are more commoditized like restaurants, powered by 3d party technology provider Resy, or new property types like Airbnb Plus, with more standardized hospitality-like features, don’t always match with their core values
  • the company moving from a niche startup player to a mainstream corporation-type actor might potentially alienate part of the core Airbnb base. comes from the exact opposite branding spectrum with a marketing strategy focused on profitable traffic acquisition via performance driven online channels and a rational value proposition based on choice and price.

However, things don´t stand still in the internet giant neither and channeling more advertisement dollars to branded channels like TV have become a strategic priority (likely also driven by the fact that Google CpC´s inflation have made them hit a ceiling in how much value they can extract in this channel). In Q3 earning call Fogel confirmed their goal to advertise on TV in 30 countries by end of 2017 vs 12 countries the year before. In the 2017 annual report their branding investment grew by nearly a third year on year to $392 million.

The new tagline “Hotels, homes and everything in between” for US TV creatives highlights the fact that they offer more than hotels, and some of the ads specifically target the vacation rental audience:

Footage shot by employees showcases the many destinations where the travel site offers accommodations. From hotels to igloos, with over 1 million places to stay, encourages travelers to book theirs.

CFO Daniel J. Finnegan confirmed this strategy in their last earning calls

“I think where we have an opportunity in the future is with our brand advertising to get the message across to people that, you know what, if you love Airbnb and that type of property, well, take a look at, too, because we’ve got a massive amount of those properties as well as the more traditional properties, as Glenn said, available to you in one search.”

One stop shop travel app?

Airbnb recently shared their lofty ambition to become the proverbial “one stop shop travel app”. Offering Homes, in-destination activities labelled Experiences and restaurants is a good start, but key travel components like flights and car rentals are still missing.

While has been busy expanding services to cover all traveler needs (flights, train, car rental etc.) for desktop users, their mobile app is so far limited to accommodation only. Two possible reasons might explain this:

1.  Hotel conversion has taken a hit in their tests on mobile adding new products due to the limited screen space

2.  The non-hotel services are integrated via white label solutions that work fine in a desktop environment, but pose a serious technical challenge for a seamless integration in an in-app environment.

Airbnb´s vertically integrated full-stack platform has an edge in this respect, but its current limited offering outside accommodation can so far not fulfill the promise of a one stop shop. Other players like Tripadvisor or Expedia are better positioned to truly offer a multiservice app covering all travel needs.

Commissions and fees – which is the right formula?

To have the full picture of distribution costs, final prices and operating margins, commissions and customer fees have to be added together. The website for Homeowners Gonitely provides a good overview in this article on the current landscape of commissions and fees:

Airbnb can lure hotels and hosts with 3% to 5% commission levels thanks to their customer fees ranging between 5% to 15%. Adding it up, their overall revenue margin are probably not far from, who applies a 15% to 18% commission and a no fee policy across all properties.

From a consumer perspective, in a rate parity scenario between both players, would be consistently cheaper in final price thanks to this policy.

This might have been less of an issue for Airbnb in the past thanks to their unique inventory, but with the increasing overlap of their content, it can pose a serious competitive threat – except if properties provide more expensive rates to offset the higher commission.

Fogel wasn´t shy in highlighting this situation in the last earning call:

“We do not charge the travelers fees. I mean that’s also an annoying thing for a customer, you go through. You think the price is one thing. Then all of a sudden you see there’s this big service fee. That, also, to me is not the proper way to go. So I believe we have a superior offering.”

And the winner is…

According to a report on alternative/private accommodations released by Susquehanna International Group in 2017 the 2018 global accommodations market could be as big as $555-billion, private accommodation with $106 billion representing 19% of its total. Who will grab the biggest slice of this market in the coming years?

To pick a winner let´s look to the end consumer. As mentioned at the beginning, Phocuswright report (US consumers only) concluded that Airbnb customers are increasingly driven by the same factors than hotel bookers: price and location. with its simple value proposition around price and choice seems to be better-positioned to beat Airbnb in their home turf than the other way round.

The current leader in hotel bookings can rely on a 6 times higher global traffic volume than Airbnb according to Similarweb. They seem better prepared for a mobile first future with a significant higher mobile share of mobile (although this doesn’t factor in App traffic): is still below Airbnb in their home market US, but clearly beats them in the rest of the world (ranked by largest markets for Airbnb):

In terms of direct traffic, Airbnb has a higher share than but in absoluteterms would beat its competitor hands down:

Google worldwide branded queries also give a leading position, although the long-term trend shows Airbnb closing the gap: has another winning card in the sleeve: their 2017 advertisement Budget of $4.1 billion allowed them to outspend all competitors, while keeping industry record Ebitda margins thanks to their advertising efficiency. This spending is likely to keep growing in coming years, based on the historical trend.

Despite Airbnb´s deep pockets and the fact that they recently reached operational profitability, it is difficult to see how they will be able to get anywhere close to these spending levels in near/mid term future with an IPO standing at the door.

In Airbnb´s 10 years’ history, the company has proven to be a phenomenal competitor that has profoundly disrupted the global accommodation market. Their ambition to keep reshaping the travel industry in the coming years seems to be limitless.

Nevertheless, in a private accomodation space increasingly commoditized, Airbnb competitive advantages will dilute over time and will face stronger competition. Make no mistake, Airbnb is here to stay and their competitive nature will no doubt allow them to adapt and keep thriving in the coming years, but expecting a change of Kings in the online accommodation space seems an unrealistic scenario. will dominate this industry for many years to come.

Mario Gavira

Mario Gavira

Managing Director at

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The enchanting premises of Shandrani Beachcomber Resort & Spa served as the platform for the contest MOM ( Meilleur Ouvrier Mauricien) on Friday whereby Ajnisha Neeloo Ugnoo became the first woman to win the title of ‘ Meilleur Ouvrier’ in Mauritius in the ‘Gastronomy’ category. Renaud Azema and his team proceeded to the selection following the recommendations of the jury which for the occasion comprised of 4 members of the kitchen brigade of the most celebrated inn of Pont a Collognes by Paul Bocuse. 52 chefs took part in the contest which entailed 8 of them to come up with creativity, authenticity and cooking techniques in the menu that they proposed and that too under certain given constraints and conditions. The winner conquered the heart and the palate of the jury with her mastery over her art. She came up with the best starter and dessert and topped the qualification round for the theoretical test. She hereby won a month’s training at Bocuse, financed entirely by the MCB and ‘ la maison Paul Bocuse’. The other candidates were also awarded fairly for their participation. Upon receiving her medal from ‘Les Meilleurs Ouvriers de France’, Neeloo who received her training at Ecole Hoteliere and was under the internship of Chef Neezam Peeroo at the be- ginning of her career, was reminded of the new covenant that she needs to abide by for being the first ‘MOM’ : Excellence, Sharing of knowhow and adequate representation. The freshly awarded ambassador of MAURITIAN Cuisine now sets out on a new path of excellence which she will be required to live by throughout her career.



“Moving to Mauritius was a decision first led by the island’s reputation for fascinating cuisine, but when I discovered the passion and warmth of the people, I knew there could be no better place for me.”

Four Seasons Tenure: Since 2015

First Four Seasons Assignment: Executive Chef, Four Seasons Resort Mauritius at Anahita

Employment History:

Sofitel Guangzhou Sunrich, China; Sofitel So Bangkok, Thailand; Sofitel Shanghai Hyland, China Sofitel Bora Bora, French Polynesia Coral Palms Island Resort, New Caledonia; Fine Ca- tering and Event Company, Florida, USA; Café Moderne, Paris, France; Bal- thus Restaurant, Beirut, Lebanon; Sur Un arbre perche, Paris, France; Bistro Humbert, Boston, USA

Birthplace: Paris, France

Languages Spoken: French, English and Spanish

With a career that incorporates more than 14 years professional cooking and kitchen management experience across three continents, it is perhaps no wonder that keen traveller Chef Nicolas Vienne has found his home in the beautiful surroundings of the In- dian Ocean, on an island famous for its rich cultural diversity and welcoming nature. His role of Executive Chef at Four Seasons Resort Mauritius at Anahita now extends his experience across a new, fourth continent.

Beginning in his native Paris, Chef Nicolas developed his skills under the guidance of multiple Michelin Star chefs, including Alain Ducasse and Eric Briffard at Four Seasons Hotel GeorgeV. His first international opportunitycame in 2001 when he accepted the position of executive chef for Bistro Humbert in Boston, USA – a stepping stone towards his global journey. Following Boston, Chef Nicolas held various international positions as executive chef, including locations such as the bustling city of Beirut in Lebanon, the sunshine state of Florida, USA and the paradise South Pacific islands ofNew Caledonia and Bora Bora. During a return to Paris in 2004, Chef Vienne was awarded a Michelin Star while head chef of Café Moderne.

Joining Sofitel in 2007 while in BoraBora, Chef Nicolas embraced the company’s expansion into Asia, first taking on the executive chef role in Shanghai, before becoming part of the pre-opening team of Bangkok as culinary designer and then into his most recent role as area executive chef in Guangzhou in January 2013, where he oversaw five of the region’s hotels, leading a combined team of more than 600 chefs and 20 restaurants.

A multiple award-winner, Chef Nicolas is fluent in French, English and Spanish and is the proud author of three published cookery books. Chef Nicolas is married to his wife, Donia, and is the proud father to Meryl.