The Lion’s Share

Platforms that power the sharing of assets and services—one of the megatrends shaping the global economy—will dominate the travel and transit landscape of the future.

In the coming decades, Airbnb will cement its status as the name-brand platform for property owners of all types and sizes to squeeze the most juice from their real estate assets—whether homes, workspaces, maybe even kitchens or parking spots.

That college grad who, once upon a time, followed her dream job to New York City, sunk her savings into a security deposit and furnished the place off Craigslist? In 2025, that job is remote, and she’s getting a taste of Lisbon, Miami and Cartagena on month-to-month Airbnb leases (see “The Great Unsticking”).

In less than 10 years, you won’t have to sift through dozens of rental listings to find what you’re looking for. In 2030, Airbnb has carved out an Airbnb Plus product, for premium homes with extra vetting, and Airbnb Luxe, for spectacular properties that come along with “trip designers” to act as personal concierges. Imagine expansions of these sub-brands—perhaps powered by acquisitions of boutique homesharing platforms such as Kid & Coe, Plum Guide and Red Cottage—along with, say, Airbnb Hustle (one-bedroom rentals equipped with contactless check-in, terabit broadband and top-notch coffee gear) and Airbnb Rooted (month-to-month leases that professionalize the market for furnished sublets).

Tomorrow’s traveler will be drawn to the “just for me” thrill of the treasure hunt for a perfect homeshare find over the predictability, and perks, that come with loyalty to HOTELCO. Meanwhile, a growing class of thrift-obsessed consumers will take any opportunity to target their spending, whether through unbundling cable subscriptions, trading car ownership for on-demand usage, or choosing homesharing over hotels when they really don’t care about the free breakfast or fitness center. The family of four that would traditionally squeeze into a junior suite? They’re booking a two-bedroom apartment for less, and they don’t miss the turndown service, either.

HOMESHARING HAS MADE MASSIVE INROADS…

Ten years ago, your average travel executive thought Airbnb would never go mainstream; today, it’s a $100 billion company that broke new ground by solving the biggest obstacle to sleeping in a stranger’s bed: trust. Becoming that trusted intermediary has unlocked a powerful set of consumer propositions.

VALUE 

Thanks to a fundamentally new supply model, peer-to-peer lodgings skew cheaper than hotel options.

REACH 

Homesharing platforms have presence in places where traditional hotels are scarce, including emerging rural destinations such as New York’s Hudson Valley or the Texas Hill Country, and they can quickly add capacity in response to trends in demand.

INVENTORY

Most listings are entire homes, which are more appealing for group/family and long-stay travel than conventional hotel offerings.

...BUT HOTELS ARE ADAPTING TO THE CHANGING MARKET, TOO

Peer-to-peer platforms like Airbnb and Vrbo have grown exponentially in the past decade to an inventory that now tops 10 million listings globally, but these homesharing platforms still account for less than two percent of total lodging revenues worldwide. Over the long term, hotels will still excel at providing:

• A level of service, and sometimes luxury, that is hard for peer-to-peer platforms to match
• Immersive resort experiences that integrate lodging with dining and entertainment
• Consistency and predictability from one stay to the next, including superior trust and safety
• Powerful loyalty programs

As short-stay business travel declines, likely for the long haul, hotel companies are thinking beyond the Standard King, beefing up their portfolios with inventory that appeals to families, groups, longer-duration travelers and that thrift-seeker who has become the bread and butter of homeshare.

To succeed, hotel companies will have to look more and more like homesharing networks. That’s not to say that the major hotel brands will be successful with copycat forays into peer-to-peer property sharing. Managing a dispersed network of individual hosts would require a whole new set of institutional capabilities—such as major investments in technology and new business development teams—to pull off successfully.

What hotel operators already excel at is branding, loyalty and franchising. Going forward, they can partner with high-end apartment buildings and property management companies—as Marriott has already begun to do with its Homes & Villas offering—a powerful combination that would bring these lodging types together with their trusted brand standards and quality control, loyalty tie-ins and a direct line to travel agents and corporate accounts. A company like Sonder, which manages luxury short-term apartment rentals in London, New York and Miami, would be a natural acquisition target for a large hotel player.

By 2025, look for a major hotel operator to apply its existing hospitality know-how and capabilities into a flexible lodging management system (a “Hotel OS,” if you will) for managing multiple types of lodging: homes, hotels, resorts and apartments.

FEATURED FUTURIST

ARUN SUNDARARAJAN

—Harold Price Professor of Entrepreneurship at NYU’s Stern School of Business, author of The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism

THE BATTLEFIELD

Traditional lodging companies will continue to dominate Tier One cities as homesharing platforms face increasing obstacles in these places. Paris, Barcelona, New York, San Francisco, Honolulu and Santa Monica are among the municipalities that already have significant restrictions in place for short-term rental listings. There’s a growing consensus that short-term rental markets can decrease affordable housing options and create quality-of-life issues for residents; plus, unlike hotels, home-sharing creates few local jobs. This lack of social sustainability will likely lead to increased legal restrictions for peer-to-peer services to operate in major cities, and will reduce their appeal among younger, more socially conscious travelers. Enforcement remains a hurdle, but we expect this to improve over time. Peer-to-peer platforms, however, win out in fast-trending places—new weekending hubs away from big cities—where flexibility is key. Creating new homeshares occurs exponentially faster than securing land rights, investors, construction and management for a hotel; by the time the property is ready to open its doors, another destination has begun touting its newfound cool factor. Over the next 10 to 15 years, peer-to-peer platforms will thrive in these city-adjacent destinations as well as in smaller cities and easily accessed resort areas.

FOUR FORCES SHAPING THE SHARING ECONOMY

1. THE SPREAD OF ADVANCED DIGITAL PLATFORMS AND DEVICES

2. A CHANGE IN ATTITUDES TOWARD OWNERSHIP

3. A FOCUS ON SUSTAINABILITY AND EFFORTS TO USE MATERIAL RESOURCES MORE EFFICIENTLY

4. GLOBALIZATION AND URBANIZATION

CAR SHARING

Peer-to-peer car sharing is still a niche segment of the sharing economy. At $1 billion annually, it’s about one percent the size of the rental car market—but all signs point to car sharing being ready to rev its engines as younger generations transition away from an ownership mindset to a mobility mindset. Your average Gen Z-er doesn’t want a car; she wants an easy and environmentally responsible way to get where she needs to go.

CONSIDER OWNING A CAR A NECESSITY?

BABY BOOMERS: 

74%

GEN Z:
40%

2021 Boston Consulting Group

In five years, peer-to-peer car sharing will be part of a suite of on-demand mobility options that allow consumers to access exactly the equipment they need, when they need it. A household might have a month-to-month subscription for a Tesla Model 3, then borrow bikes and scooters for urban commutes, and an SUV for a family road trip. All of these activities are likely to be united through such mobility platforms as Uber and Lyft, which have already integrated bikeshare and rental cars into their apps.

Peer-to-peer networks require widespread car ownership in order to function, but when a car no longer requires a driver, will individuals still own them? Ten to 15 years out, autonomous vehicles will transform this ecosystem once again. The nascent partnerships between rideshare and rental agencies—Uber drivers can now drive cars they’ve rented through Hertz—will lead to a future where rental car companies or even car manufacturers own and maintain the hard assets for autonomous mobility, rideshare apps provide the consumer-facing platforms, and most people become mobility subscribers.

THE NUMBER OF PEER-TO-PEER CAR-SHARING VEHICLES GLOBALLY

2025:

990K

2021:

440K

2015

200K

Public transit systems are the original mobility subscription, and some of these services will wind up interacting with the public sector as well, especially in cases where there are benefits to reducing traffic congestion and green-house gas emissions; think of urban bikeshare networks, which in places like Paris and London are city-owned. Imagine the Los Angeles Department of Transportation (LADOT) partnering with Uber, Lyft, Lime and Zipcar for an unlimited pass that functions across cars, buses, subways, bikes and mopeds, optimizing the speed and sustainability of every user’s mobility decisions in real time.