We all love the wonders that technology has bestowed upon us. Truly, it has changed our lives in some fascinating ways. We have instant access to virtually all of the world’s knowledge, we can communicate with almost anyone in the world, instantaneously, and we are making significant advancements in a variety of industries, like healthcare and finance. That being said, although technology has been a major boon for us as a society, it has also been a bit of a nuisance to others. Technology has a knack for “disrupting” longstanding traditions and industries. And almost every industry has been disrupted in some form or another. For those unaware of the term disruption in this context, it can be quickly summed up like this: disruption occurs when a new technology or method of completing a task, objective or service displaces longstanding traditions and methods.
And while disruption tends to move our society forward in a positive direction, it can pose challenges to our pre-existing industries. A great example of this can be seen in the sharing economy. Services like Uber and Lyft, where ordinary citizens can become overnight chauffeurs, are giving the taxi industry a run for its money. But I want to focus on another sharing economy service: AirBnB.
AirBnB takes the concept of Uber and Lyft and applies it to the hospitality industry. Homeowners and landlords can post a room or building on the service and host visitors, travelers or anyone else. You simply sign up with AirBnB and, essentially, turn your house into a hotel. And while this may sound like a novel idea, it poses a potential threat to the real estate industry.
According to recent reports, the wildly popular sharing economy company is looking into getting into long-term real estate. Currently, AirBnB focuses primarily on short-term leases. Most AirBnB hosts rent rooms out for a few days, but now, because of the company’s growth, they may be expanding into more lengthy leases.
Industry professionals are unphased, claiming that AirBnB could not make the necessary impact on the industry to make any real impact. However, with the company’s massive growth and popularity, they could certainly hurt other real estate developers and investors. Many of the hosts that use AirBnB purchase multiple properties for the sole purpose of using AirBnB.
These are still just rumors, but if they come to fruition, then multiple real estate developers and investors could wind up competing with one of the largest growing hospitality services in the country.