By Tracey Cheek

Airbnb has become the largest player in the lodging market and is growing by about twice the rate of traditional lodging chains as new travelers come onto the platform and existing users book more reservations, e-commerce analyst Ken Cassar told Cheddar Thursday.

Cassar, the vice president of strategy and insights at Rakuten Intelligence, said Airbnb now boasts a 25 percent share of the lodging market and reported a growth rate of 40 percent.

"Of that 40 percent growth that they saw last year, they saw 33 percent growth in new buyers, and they actually saw a little bit of an increase in spend amongst existing buyers, and that's usually pretty difficult," said Cassar. "When you're in a situation where you're bringing a lot of new customers in, they tend to be dipping their toe in the water so they tend to spend lightly, which tells us that folks are every quickly engaging with the experience."

Airbnb also tends to attract longer stays than conventional hotels.

Casser said the average Airbnb reservation is 3.3 nights, compared to 1.9 nights for the rest of the lodging sector.

"You know that when you book Airbnb you're going to have to play a cleaning fee, so it's not going to make sense to book one night if you're going to have to pay that cleaning fee," said Cassar. "So I think that there's a lot of incentive to use Airbnb for those longer stays."

As for pricing, there are cases where Airbnb can be a better bang for your buck than a hotel, but Rakuten Intelligence found that the average cost per night through Airbnb is nearly identical to the cost of traditional hotels.

"Over 2018, it was about $152 per night for a hotel, and $152 per night for an Airbnb," said Cassar. "The Airbnb $152 includes a prorated portion of that cleaning fee plus Airbnb fees, but it's not all about it being a much more aggressively priced alternative today as it might've been when Airbnb first launched."

The bigger difference may be related to the demographic of the traveler.

Rakuten Intelligence found that 42 percent of Airbnb buyers are under the age of 35 compared to 29 percent under the age of 35 for traditional hotels.

"Millennials seem to be a heck of a lot more likely to think about Airbnb, which certainly bodes well because millennials are going to get older, they're going to have more disposable income, they're going to travel more," said Cassar. "Airbnb seems to be their default destination."

For full interview click here.