by Michael J. Shapiro | October 01, 2014

A strange thing is happening in San Francisco. Large conferences are drawing record numbers of attendees, but they're not filling hotel rooms like they used to. "When you see your registered attendance being the same, if not growing, and yet your blocks aren't being met, something has drastically changed," says Eve Schmitt, CMP, senior manager of global meeting sourcing and vendor relations for software provider VMware in Palo Alto, Calif.

Schmitt's show, VMworld, attracted more than 22,000 software users and others to San Francisco in late August. While the final numbers haven't yet come in, she suspects there might be challenges with the room block. "In the past, attrition has never even been part of the discussion," she says, noting her group had either filled the block or exceeded it by a few percentage points. "Now I would not be surprised if we didn't reach 100 percent."

Although hard evidence of the cause has been difficult to pinpoint, a consensus is forming among industry professionals that it's the sharing economy -- in this case alternative lodging sites such as VRBO, FlipKey, Craig's List and, most significantly, the fast-growing Airbnb -- that are drawing attendees away from more traditional lodging offered by typical hotel room blocks.

While such sites have long attracted leisure guests, a growing number of business travelers and conference attendees are being lured by the promise of more space, a kitchen, the opportunity to "live like a local." Another draw is lower cost, particularly if several travelers stay together in an apartment or home.

And the phenomenon is hardly limited to San Francisco. Airbnb alone has 800,000 listings around the world, in more than 35,000 cities.

Unaccountable attendees

Rick Swig,
RSBA & Associates

 "The alternative transient-lodging sector is already affecting meetings," says Rick Swig, president of RSBA & Associates, a San Francisco-based consultancy specializing in hotel asset management. "And I'm speculating," he admits, "because there's no hard evidence to this. It's all pioneer territory, and therefore without any metrics, no methods of measuring the impact." But Swig's conjecture -- like that of show organizers -- is based on an insider's observation and logic.

Swig works closely with San Francisco hoteliers, a number of which told him that while occupancy was solid during VMworld and other recent large conventions, they didn't feel the pressure in demand that they had for those shows in previous years. However, San Francisco Travel, the city's convention and visitors bureau, reported that the shows drew record attendance and the organizers were pleased. "And I scratch my head," he says, "and think, well, where the hell are those people staying?"

Anecdotal evidence points to Airbnb, which has close to 5,000 listings in San Francisco alone, the city in which it is based. Swig, VMware's Eve Schmitt and S.F. Travel have all discovered that many conference attendees have booked houses and apartments via the site. And that's left organizers, hoteliers and destination marketers wondering just how Airbnb -- and other such sites -- should fit into their future plans.