With the kick-off of the World Cup last week, tourists and fútbol fanatics have flooded Brazil to partake in the month-long tournament. The harsh criticism Latin America’s largest country has suffered on account of its sub-par preparation for the event has opened the door for Airbnb to swoop in and seize a firm foothold on the market.
Airbnb has typically been a thorn in the side of hotels, eating into the hospitality industry’s market share by offering lower prices and a more authentic local experience. But with FIFA’s tournament bringing such a huge spike in demand, Airbnb provides necessary relief to the 3.5 million foreigners and locals seeking accommodations while economically benefiting Brazil. As seen from prior such world sporting events, host countries that attempt to accommodate the tourism influx by hastily building hotel infrastructure are subject to either scathing public backlash from shoddy construction (Sochi 2014 Winter Olympics) or barren hotels after the tourism tidal wave subsides (South Africa 2010 World Cup). Airbnb helps serve as a more sustainable way to deal with the demand.
Beyond benefiting the local economy, Airbnb also helps relieve the financial burdens of the budget-confined tourist. Hotel rates in many of the World Cup host cities more than doubled in advance of the tournament. TripAdvisor reports visitors to Rio will face the highest prices, with hotel rates averaging $445 per night. For tourists, such an exorbitant cost provides huge impetus to seek alternative options, as travelers cite price as the largest key factor in selecting their accommodations.
In this regard, Airbnb provides an ideal alternative, but also causes alarm for traditional hotels vying for the business of the price-sensitive tourist. L2’s recent Digital IQ Index: Prestige Hotels study found that just 41 percent of brands include price as a booking search filter, missing the opportunity to quickly capture the attention of budget-savvy hotel shoppers. Special offers present another opportunity for hotel brand sites to distinguish their offerings and compete against budget-friendly travel sites like Tripadvisor and Airbnb. While 88 percent of brands include links to special offers on their homepage, only two percent integrate offers into booking search as a filter.
With an estimated 50,000 people using Airbnb on the most popular World Cup game nights, the service has obviously received a warm embrace from locals and travelers. But while the room-sharing service gives the financially struggling population a burst of income and prevents a hotel surplus in the aftermath of the event, the company’s success at the World Cup serves as a warning for hotel brands as they grapple with a shifting marketing landscape and changing consumer behavior.
For a deeper look into hotel brands’ digital strategy, see L2’s Digital IQ Index: Prestige Hotels.