Airbnb vs. Hotels: How the War for the Best Place to Crash Affects Your Contracting Business

There’s nothing like a little competition to get businesses working harder to build bigger and better. And the competition between hotels and short-term private rental companies like Airbnb is anything but little. Airbnb, which began as a way for owners of existing properties to rent them out for money, is now delving into construction. Hotels are streamlining and expanding to compete. Here’s how the battle could affect your contracting business.

Private Rentals Increase Demand for Renovations
Airbnb boasts more than 5 million homes available to rent in tens of thousands of cities worldwide. The business concept bursts with income potential. If homeowners have a decent living space in a high-demand area, they may be able to secure hundreds of dollars a night for the days when they aren’t occupying the house. Make a few minor upgrades, such a mid-range kitchen or bathroom upgrade, and Airbnb hosts can increase the price significantly. It’s changing the way that people conceive of the purchase and ownership of residential property, which may have long-term effects for construction as an industry.

Real Estate Investors Spur Demand for New Housing
If a person making a few renovations to their own home can make it much more likely to land a healthy income from short-term rentals, you can imagine how quickly real estate investors got involved. Across the country, investors are looking for existing homes or units to buy and fix up so they can rent for a higher price. They often have more access to capital for renovations than private homeowners, which allows them to hire contractors to do more extensive work. This increases demand for a variety of fields in construction, as well as other industries. For example, property management companies are expanding to specialize in short-term rentals through sites like Airbnb.

Hotels Attempt to Compete
The industry really feeling the pinch from such an influx of private rentals is undoubtedly hospitality. Hotels are trying to stay in the game with new buildings, specifically bigger ones with better features. Hotels now have to compete with possibly tens of thousands of private rentals within a 20-mile radius. The only way they can realistically do this is by building better and faster than they ever have before. Hotel chains are emphasizing modular construction especially as it allows them to expand and get to completion weeks or months earlier.

Cities Try to Curb Airbnb Real Estate Investors
Overcrowded and underhoused cities in California have been looking at this battle with wariness. A market that encourages investors to buy up and renovate units even in high cost-of-living regions like the Bay Area could dramatically cut down on the available housing. Some experts estimate that Airbnb alone accounts for a 10 percent increase in rent in New York City. Cities like San Francisco and Los Angeles have already set limits on the ways that people list properties on sites like Airbnb. But elsewhere in the state, the push to build housing for people to live (and to rent when they’re traveling) increases demand for new housing starts as a whole.

Both Sides Emphasize Speedy Completion of Projects
If this feels a little like an arms race, it is in a way. Everyone wants the best of the best and they’re not afraid to pay for it. For contracting businesses looking to take a piece of all this investment money, the focus must remain on efficient processes and good results, with a little extra fact-checking along the way. If you can spot an investor with a good plan, you may be able to take part in projects that open doors for you.

The battle between private rentals and the hospitality industry is only beginning to heat up, with lots of potential effects for construction. To find out how you can take advantage of increasing demand in this industry, contact CSLS today!

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Contractors State License Service (CSLS) is the largest school in California devoted to the Construction professional. For over 23 years, CSLS has helped its students pass the exam to become licensed contractors in the State of California, licensing more students than any other school. From our main offices in Southern California, CSLS operates over 25 locations with full-service support and classrooms. We have grown to this extent by providing quality, professional services. In comparison, this provides 7 times the number of convenient locations than the second largest contractor school. Contractors State License Services is one of the only contractor schools in the state that is run by educators, not lawyers or people mostly interested in the bonding and insurance business. Contractors State License Services formerly operated under the oversight of the State of California's Bureau for Private Post Secondary and Vocational Education. As of January 1 2010, the new Bureau for Private Postsecondary Education (BPPE) came into existence replacing the BPPVE. CSLS now operates under the provisions of the California Private Postsecondary Education Act of 2009 (CPPEA), Article 4 Section 94874(f). Our Mission is simple; We can help you pass your California Contractors License Exam. Celebrating our 25th year, CSLS has helped over 120,000 students pass the California contractor licensing exam to become licensed contractors in the State of California. Additionally, we offer complete home study and online contractor’s license programs to help you pass your California contractors license exam. CSLS offers licensing classes for all types of contractor licenses, including General Engineering Contractor, General Building Contractor, Specialty Contractor, Insulation and Acoustical Contractor, Framing and Rough Carpentry Contractor, Cabinet, Millwork and Finish Carpentry Contractor, Concrete Contractor, Drywall Contractor, Electrical Contractor, Elevator Contractor, Landscaping Contractor, Warm-Air Heating, Ventilating and Air-Conditioning Contractor, and many others. For a complete list of contractor licenses, visit and tuned for more informative posts.