Despite forecasts that Airbnb will hinder the hospitality industry, hotels are actually flourishing in Los Angeles, according to a recent Moody’s report.
The onslaught of Airbnb listings, which now tally to over 2 million worldwide from just 300,000 in 2014, could drag national hotel occupancy down by 1 percent in 2017, the report forecasted. But that may not be the case in La La Land, where the average daily hotel rate rose 7.5 percent in 2015 and more than 9 percent in the first eight months of 2016, the same analysis found.
This may be due to the fact that unlike New York and Miami, L.A. has a fewer share of Airbnb listings among all of its lodging options — 12 percent, compared to New York’s 25 percent. And in New York, the average daily hotel rate dipped by 1.6 percent in 2015 compared with the previous year and then dropped 2.9 percent more in the first eight months of 2016 compared with the same period the year earlier.
It also doesn’t hurt hotels that as City Council considers limits and regulations on the short-term rental platform, Airbnb has already agreed to collect lodging taxes from their hosts in a three-year agreement with the city.
Airbnb notwithstanding, L.A.’s hotel market is strong thanks in part to job growth and the advent of new companies. Occupancy rates are expected to hover around 80.5 percent through the end of this yearmore than 10 percent higher than the average over the past four quarters of 68.9 percent, according to a June CBRE report. Revenue per available room could see a nearly 8 percent increase by the end of the year, compared with the national growth rate of 4.2 percent, the CBRE report said. [LAT] — Cathaleen Chen