Among the concerns of hotels is the impact of Airbnb on their pricing and distribution strategies, which, according to a new study by the Tepper School of Business at Carnegie Mellon University, could be more dramatic than hoteliers might think.
SANTO DOMINGO.- Booking through the Airbnb platform is undoubtedly more economical, according to studies reviewed by this digital newspaper El Inmobiliario, in addition to directly verifying rates on the platform and in some of the most prominent hotels in Santo Domingo and tourist destinations.
In 2018, a study conducted in Mexico determined that Airbnb prices are significantly lower than those of traditional hotels in the country's main tourist areas. The study found that in Cabo San Lucas, one of the most expensive destinations in the global analysis, you can save up to 63% by staying in an Airbnb, considering the impeccable conditions, prime locations, cleaning services, and exceptional hosts—everything you could ask for in a hotel.
Compare The Market launched a study in 2019 analyzing Airbnb and hotel nightly rates in 52 popular cities. The firm converted the report's prices to euros and selected the best deals on TripAdvisor, Booking.com, Expedia, and other platforms in each city to help you see what's affordable.
The British company, known for comparing insurance, credit cards, and more, analyzed nightly rates for both hotels and Airbnb in 52 popular urban destinations. On average, they found cheaper hotels in only 10 of the 52 cities examined.
In the Dominican Republic
This digital portal conducted a search directly on the Airbnb platform and in some of the most prominent hotels in Santo Domingo and tourist areas. In a few cases, it was found that short stay offers have preferential prices, in addition to the motivations expressed by guests, which we will analyze in a subsequent installment.
In Las Terrenas, a villa for ten guests, with five bedrooms and five beds, costs six thousand pesos per night. It includes a kitchen, proximity to the beach, and a swimming pool. A 3.5-star hotel costs $5,940 for two guests; this rate is valid until May 2nd of this year.
In Sosua, Puerto Plata, Airbnb offers a villa for twelve guests with five bedrooms and six beds for $2,500 per night.
In Santo Domingo, an apartment on George Washington Avenue (Malecón) for four guests, with two bedrooms and two beds, is offered at five thousand pesos per night; a four-star hotel is around seven thousand pesos per night for two guests.
An apartment in El Mirador for four guests with two bedrooms, two beds, equipped kitchen, gym and pool, costs $4,750 a night on Airbnb; a five-star hotel in the central polygon for two guests has a rate of $8,700 a night.
They will impose taxes
Everything points to short-term rental platforms being taxed in the country in the coming weeks. Following yesterday's statement by Tourism Minister David Collado that regulating this sector is one of his priorities, there is little doubt that the current government will impose taxes on this currently popular business model.
The president of the Dominican Republic's Hotel and Tourism Association (Asonahores), Rafael Blanco Tejera, echoed the minister's sentiments, stating that the regulations would be the same as those required for any hotel. "In other words," he said, "they will have to comply with their tax obligations and the safety requirements and guarantees established by the Ministry of Tourism.".
The industry has raised its concerns in various forums, arguing that Airbnb represents unfair competition for traditional hotels. “We have been in constant discussions with the authorities; with the previous government, there was a small attempt to tax transactions with the ITBIS (Value Added Tax), because it continues to be unfair competition, and there is also an incredible opportunity to raise revenue,” stated Andrés Marranzini, vice president of Asonahores, last October.
Four ways Airbnb is challenging hotels' pricing strategies
Since the arrival of services based on collaborative economy models such as Airbnb, hotels have had serious difficulties competing with the alternative accommodation market.
Among the concerns of hotels is the impact of Airbnb on their pricing and distribution strategies, which, according to a new study by the Tepper School of Business at Carnegie Mellon University, could be more dramatic than hoteliers might think.
The study, called Competitive Dynamics in the Collaborative Economy: An Analysis in the Context of Airbnb and Hotels and shared in the journal INFORMS Marketing Science, paints a picture of Airbnb with a great capacity for flexibility compared to the traditional accommodation industry, supposedly less inclined to such flexibility.
The study seeks to discover how the sharing economy has changed the way the accommodation industry adapts to fluctuations in demand and how traditional hotels should respond.
The report also took into account market conditions, seasonal patterns, hotel prices and quality, the demographic composition of consumers and the characteristics of Airbnb providers, as well as its strategy towards business travelers, government regulations in different markets related to Airbnb and changes in accommodation costs.
