It's shaping up to become one of travel's great competitive rivalries: Airbnb versus Booking.com.
One has achieved global dominance in online hotel distribution, the other in private accommodation.
But as Phocuswright Research has been forecasting for several years, the silos and segments within accommodation are collapsing as travelers increasingly consider and book both.
Each of these online travel giants are moving aggressively into each other's turf and the stakes – the more than $600 billion global travel accommodation market – are high.
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Booking.com is the clear global leader by a significant multiple in virtually every major financial metric – gross bookings, revenue, profit and market cap.
Phocuswright's 2017 analysis of nearly 2.5 million online rental listings across Europe with Transparent showed Airbnb firmly ahead in supply across five key markets.
Private Accommodation in Europe: 2010-2020
Market sizing and projections, in-depth analysis of key players, insights on travelers' attitudes, and much more in this
Phocuswright report.
Booking.com has made clear its intentions to accelerate its growth in the private accommodation sector, while Airbnb has formally opened its platform for independent and boutique hotels, including partnerships with hotel technology firms to facilitate connectivity.
Both present clear strategic threats to one another – Airbnb with its disruptive commission model for hotels, and Booking.com with its uncanny ability to acquire and convert demand.
Both companies also face key strategic challenges:
- How will Booking.com make inroads on supply with a higher commission model for owners and a rigid insistence on instant booking and confirmation?
- How will Airbnb expand its supply portfolio into hotels without diluting its core brand positioning?
How the next few months and years will play out depends on various factors, yet this is set to become a fight worth watching.