Short-term rentals’ impact on hotels performance in european cities

Dissertation presented as the partial requirement for obtaining a Master's degree in Information Management, specialization in Knowledge Management and Business IntelligenceShort-term rental accommodation sharing platforms are one of the largest peer-to-peer markets in the lodging industry worldwide. With such a rapid increase in the past few years, its impact on the tourism and hospitality industry’s demand and supply is undeniable. This study objectives are to examine whether the short-term rentals’ listings have an economic impact on hotels performance and to identify any possible substitution threat. To achieve these goals, Average Daily Rate (ADR) and Occupancy Rate (OCC) by hotel typology, in four European cities - Berlin, Madrid, Paris, and Rome - at global and city levels, were analyzed. Power BI reports were developed to perform these analyzes on the five years and five months of hotels’ and short-term rentals’ data. Results showed that surprisingly, the mid-tier hotel classes are more likely to get impacted, as the short-term rentals’ metrics’ levels seem closer to those of those classes. Even though both segments’ OCC levels are quite similar globally, the hotels’ ADR ones are clearly higher. Nonetheless, a possible substitution threat seems quite unlikely, as both segments' metrics’ seasonality and trends are evolving in the same ascendant way. Also, the short-term rentals’ listings variation should have little to no impact on the hotels’ metrics, as their correlations are always positive. This confirms that any variation in these markets is likely to come from an external macroeconomic factor, affecting both similarly