A new study from Juniper Research has revealed that shared space providers such as Airbnb will see revenues surpass ride-sharing apps such as Uber over the next three years.
Disruption to the hotel industry from companies that enable the peer-to-peer rental of people’s homes will contribute to a growth in revenue for these types of companies (which take a share of booking fees) of US$3.8 billion. This is up from US$2.3 billion in 2015 to US$6.1 billion in 2019.
Research author Lauren Foye said:“The shared space industry is set to significantly impact the hotel industry, with consumers set to spend over $34 billion in 2020. That sum represents approximately 6 per cent of today’s global hotel industry market size.”
The full report, which costs £1,990 to download, claims to “give a comprehensive analysis of the market and its associated components, including new, burgeoning areas which are set to disrupt traditional business models”.
How does Airbnb rank in terms of value?
By the end of last year, Uber was the most valuable privately held start-up, worth US$62.5 billion. In second place was Chinese electronics company Xiaomi, worth US$46 billion, and in third place Airbnb, worth US$25.5 billion.
A statement from Juniper Research said: “The ease of use provided by Airbnb in terms of no-nonsense booking, as well as the financial rewards available to registered property owners, will see a surge in both listings and bookings.”
According to a report in Wired, Airbnb generated US$340 million on bookings equal to US$2.2 billion in the third quarter of last year alone, hitting about US$900 million turnover for 2015 as a whole. This was up substantially from 2013, when it saw revenues amounting to US$250 million.
By 2020, Airbnb projects to have an annual revenue of US$10 billion, but only then will it become profitable as it has been investing so much in expanding.
Uber, meanwhile, lost almost US$1 billion in the first six months of 2015 but closed with a net revenue of US$1.5 billion.
According to bloomberg.com, ride-sharing app Lyft lost US$127 million in the first half of last year (more than US$96 million spent on marketing), with just US$46.7 million in revenue.
Uber, of course, will continue to fight. Juniper Research said: “Whilst Uber has struggled to gain a significant foothold in China, largely due to the dominance of taxi hailing service Didi Kuaidi, Uber is not without the determination and the means to force its way into new markets.
“Uber has reportedly spent $1 billion per year on expansion in China alone. In addition, it has recently set its sights on disrupting the huge motorbike taxi industries of India and Thailand, displaying a willingness and drive to aggressively obtain market share.
“Uber’s February announcement that it is to launch its UberMOTO service in India, opens it to an enormous potential market – the city of Bangalore alone has 3.5 million registered motorbikes, and India already allows motorbike taxi bookings through applications in two states.”