Imagine Pac-Man as Airbnb, slowly gobbling up the profits of the hotel industry around him.
Then imagine the ghosts as hotels, scrambling to save themselves as Pac-Man eats into their profits.
That's just one way to illustrate what could happen to Canada's accommodation sector if the home-sharing company keeps growing as it has.
A new report by Ryerson's Ted Rogers School of Management and hospitality consultancy HLT Advisory shows just how much Airbnb has grown across Canada since 2010 — and the share of the accommodation sector it managed to grab last year.
Airbnb demand is mostly driven by leisure travellers, who largely veer to cities such as Vancouver and Toronto. Users are less interested in cities such as Calgary and Ottawa, which are more business-oriented.
But that could change, HLT Advisory managing director Lyle Hall said in a news release.
"If Airbnb continues to grow at its recent pace and becomes more accepted by businesses and convention travelers, it will have a significant impact on the broader hotel business in Canada," HLT Advisory managing director Lyle Hall said in a news release.
Market share
The report determined Airbnb's market share in the accommodation sector by looking at a six-month period between July and December 2015.
Airbnb took up its greatest shares of accommodation demand in Metro Vancouver (5.3 per cent) and Greater Toronto (4.7 per cent) in those months. It took up a lesser share in Ottawa (2.6 per cent) and Calgary (1.5 per cent).
It also commanded a 5.1 per cent share of revenue on the West Coast and a 4.7 per cent share in the 6ix. The share of Calgary revenue was 1.2 per cent and the share of Ottawa revenue was 2.2 per cent.
One of the driving factors that makes Airbnb so popular is the idea of renting a place for less than what you'd have to pay for a hotel room.
That's true when it comes to the price of renting a room or sharing an apartment, the report noted. But it's not the case when you compare the cost of renting an entire place with the average daily rate (ADR) of a hotel room in these cities.
At a daily rate of $148.91, it actually cost more to stay in an Airbnb in Greater Toronto last year than a hotel ($146.89).
Vancouver was the most expensive of any Canadian city when it came to both Airbnb and hotel listings. But unlike Toronto, the latter ($173.86) was still more expensive than in the former ($167.64).
“If you’re a family looking for a place to stay, Airbnb does not always have the lowest price option if you compare the average daily rates of a hotel with the cost of renting an entire home on Airbnb," assistant professor and report co-author Chris Gibbs said in a news release.
Airbnb makes three-quarters of its money from people who rent out entire homes, rather than just a room or two, the report noted.
Those who manage two listings or more bring in half of its revenues.
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