Skift Take

For all the challenges facing this year's Summer Games, chief among them a lack of hotel rooms, the beauty of Airbnb's flexible supply scheme makes it ideal for major events like the Olympics.

This year’s Rio Olympics have been plagued with a number of challenges: Suddenly green-tinged diving pools. Zika. Traffic jams. Security concerns. Less than stellar accommodations for athletes at the Olympic Village.

But one of the biggest problems at the Games — a lack of hotel rooms in Rio — is being taken care of by Airbnb.

As the “official alternative accommodations service” of the Rio Olympics, Airbnb is doing what most hotel companies cannot do as easily or quickly: helping house some of the estimated 500,000 visitors who are flooding the city of Rio de Janeiro for a little more than two weeks.

Rio’s reputation for a low number of hotel rooms isn’t a new one and, with the Olympics, organizers for the Games had already booked 90 percent of those existing hotels. When the city won its Olympic bid in 2009, it only had half of the 40,000 hotel beds required by Olympic officials to host the Games. The city now has at least 40,000, but that’s still not enough. Notably, the U.S. men’s and women’s basketball team are avoiding the athlete’s village altogether, opting to stay aboard a cruise ship instead of booking hotel rooms, for example.

Because Airbnb’s room supply isn’t dependent on multimillion-dollar investments from developers and approval from city building officials, it’s been that much easier for Airbnb to accommodate an estimated 66,000 visitors who have come to the Games.

That’s a big plus in a country grappling with a crippling recession and political turmoil following the ongoing impeachment of its president this year.

“Instead of building more places, more concrete, that you know, you have a legacy in the city. Sometimes, [with that], you have underutilization [of those hotels] after the Games,” Leonardo Tristao, country manager of Airbnb Brazil told CNBC. “Instead you mobilize the community and have this additional capacity. And then after the Games, things will settle normally.”

Rio was already Airbnb’s fourth largest market by the number of listings before the Games and during the Olympics, Airbnb said it has nearly 38,000 listings. Those listings are being booked most, Airbnb said, by visitors from Brazil (50 percent), followed by the U.S., Great Britain, Argentina, and Australia.

Whatever listings Airbnb has right now in Rio aren’t exactly cheap, either. The average nightly rate is $206 a night for an Airbnb, making Rio more expensive than an Airbnb in Miami or San Francisco, according to an Aug. 3 Bloomberg Index rating. The average nightly hotel rate in Rio is approximately $242. On Aug. 11, a spokesperson for Airbnb said the average nightly rate for one of its listings was now only $165 for three guests.

Airbnb estimates that each of its 66,000 guests during the Games will contribute more than $25 million in income for its Airbnb hosts in Rio, and spend an average of $136 per day during their stays.

The idea to utilize Airbnb was sparked after the alternative accommodations provider was used throughout Brazil during the World Cup. FIFA turned to Airbnb in 2014 and within a few weeks, Airbnb was able to accommodate 120,000 visitors in more than 18,000 homes throughout Rio alone.

Serving as an additional accommodations provider for a big event is something that’s more or less in Airbnb’s DNA. The company, now valued at $30 billion, got its start when its three founders decided to rent out three airbeds in their apartment, which was located near San Francisco’s Moscone Center. They knew a large design conference would be taking place and seized on the opportunity to make some extra money from attendees.

That Airbnb can more or less add to its supply overnight is a big plus for being able to accommodate a large influx of visitors for major events like the World Cup, the Olympics, and most recently, the Republican and Democratic National Conventions.

This ability to scale up dramatically, without additional costs, isn’t lost on hotels, who are seeing Airbnb chip away, in some ways, at their business during citywide events.

Will Airbnb soon become the “official alternative accommodations service” for other major events going forward? If the Olympics and the World Cup in Brazil have shown, it’s certainly a golden possibility.

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Tags: airbnb, olympics, rio de janiero

Photo credit: Rio de Janeiro's famed Ipanema Beach. Airbnb is helping the city accommodate an influx of visitors who have come for the Summer Olympics. Eduardo Zappia / Airbnb

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