Rethinking the real threat of short-term rentals for hotels

Why opportunistic supply, regulation, and data—not disruption—should guide hotel strategy

Short-term rentals have long been framed as an existential threat to hotels, but nearly two decades after Airbnb’s rise, both accommodation types continue to coexist. The article argues that the competitive risk posed by short-term rentals is uneven, market-specific, and often misunderstood. Rather than a permanent substitute for hotels, short-term rentals behave as an opportunistic and highly flexible form of supply. For hoteliers, the real opportunity lies in understanding when and where this flexibility matters—and using data, regulation awareness, and differentiation to respond effectively.

Key takeaways

• Short-term rentals operate as opportunistic supply: Unlike hotels, short-term rentals can enter and exit the market quickly, concentrating inventory around peak demand periods and disappearing afterward.
• Hotels face seasonal vulnerability, not constant competition: Short-term rental supply fluctuates around high-demand events and seasons, while hotel supply remains largely static throughout the year.
• Short-term rental data can act as a leading indicator: Short-term rentals often book earlier than hotels, making their occupancy and pricing trends useful signals of future hotel demand.
• Regulation materially reshapes competitive pressure: Changes in local and national legislation can rapidly reduce short-term rental supply or shift ownership toward more professional, multi-property operators.
• Not all short-term rentals compete with hotels: Only a subset of “hotel-like” short-term rentals—those offering short stays, central locations, and comparable amenities—pose direct competitive risk.
• Threat levels are highly market-specific: Cities vary widely in the proportion of hotel-like short-term rentals, meaning competitive pressure differs significantly by destination.
• Hotels can differentiate through reliability and amenities: Safety standards, on-site services, transparent pricing, and consistent guest experience remain structural advantages hotels can emphasize in mature markets.

Source: Lighthouse

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