NEW YORK ( TheStreet) -- Accommodation website Airbnb could become a major problem for the traditional hotel sector though it may still need to win over customers skeptical about staying in a stranger's apartment.
While investors salivate over an eventual IPO for the San Francisco-based company, its founders are downplaying such a possibility -- at least for the near-term.
It's not hard to understand the impatience: Airbnb has been valued at $2.5 billion, according to a source close to the company. It's various online properties have hosted more than 8.5 million guests in the five years since its inception. More critically, it's poised to gain momentum as the traditional hotel sector faces the prospect of sluggish global growth.
Airbnb's charm is found in fulfilling the desire among younger, more urbane travelers for cheaper and more interesting, neighborhood-based accommodations. The site matches hosts willing to offer their homes with travelers who pay a fee to access the listings. At present, Airbnb encompasses more than 500,000 property listings in 192 countries, according to the website.
Such broad listings trumps luxury hotel group Starwood Hotels (HOT), which offers 343,800 rooms in 100 countries under brands that include the Westin, Sheraton, Le Meridien, St Regis, W Hotels and The Luxury Collection. Starwood shares have jumped 26% over the past 12 months.
Another rival, InterContinental Hotel Group (IHG) operates 678,000 rooms in nearly 100 countries. For the six months ended June 30, InterContinental posted a 7% rise in revenue to $936 million on profit of $338 million. InterContinental has added 19% in the past year to $30.20.