Accommodation sector includes hotels, motels and commercial accomodations like backpackers, hostels among others. Other examples of the accommodation sector involves beds and breakfasts, lodges, resorts. The accommodation sector of Australia have emerged strong due to the increased demands of the rooms in case of the visitors. The data has recorded high occupancies by the end of 2018. Mention can be made of the cities of Hobart, Sydney, Melbourne, The Gold Coast and Cairns, which have produced 80%, which have escalated the revenue per available room (RevPAR) (Australia.com 2018).
(Source: Australia.com 2018)
Mention can be made of Airbnb, which has revolutionized the accommodation sector. As a matter of specification, the customers now do not have to depend on the property owners for finding prospective accommodation facilities. Reference can be cited of the hotel bookings, which have become easier due to the introduction of special services. Uploading minute information about the hotel rooms and their charges have answered all the queries of the customers (Airbnb.com.au 2018).
One of the major issues in the accommodation sector is the ever changing needs of the customers. Due to the advancement of technology, people are now tech savvy. This adversely affects the business of the hotels and the service providers like Airbnb with the absence of security policies and cookies. This absence contradicts the aspect of culture and ethics, which the customers seek culture within the hotels. This situation aggravates the complexities of the hotel staffs in order to understand the specific tastes and preferences of the customers. In terms of the demands for rooms, the customers seek to incorporate value for money (Nieves and Segarra 2015). Now, luxury has different connotations for the customers, which becomes difficult for the hotel staffs to deal with, if there is no strategic planning. Brand quality is no more the only agent for achieving the satisfaction of the customers (McCool and Bosak 2016). Providing quality services to the customers enhances their experience, which helps them in forming a particular perception regarding the accommodation facilities. Negligence towards maintaining the quality of the rooms compels the staffs to receive complaints from the customers. This includes dirty bed sheets, pillows, which creates a negative image about the hotel in the minds of the customers (Razli, Jamal and Zahari 2017). Upon uploading the details of the room preference, if they are not secured, fraudulent cases occur in terms of leakages and cybercrimes, degrading the reputation of the hotel.
The increasing competition makes it difficult for the hotel staffs to fulfil the needs, demands and requirements of the clients and the customers. This degrades the reputation of the hotels. Reference can be cited of the competition from Airbnb. The valuation of Airbnb has been recorded as over $10 billion, which is higher than the revenue of the larger hotels like Hyatt. In this competition, there are tendencies for threat of substitutes, which results in customer turnover. Limited service properties in market share and tourism provides Airbnb competitive advantage over the hotels. However, recently it has been seen that tourists prefer the services of the hotels (Xie et al. 2014). This is in terms of Airbnb’s failure to provide the much needed luxury and security to the customers. Moreover, increase in the number of apps have added vulnerability into the services of Airbnb (Smh.com.au 2018). Security within these apps is a weakness for the hotels, compelling the staffs to lose customers.
Improper and ineffective marketing strategies is a related issue, aggravating the complexities of the hotels staffs to provide luxurious accommodation. Many hotels have failed to acquire effective and efficient technologies (Bbc.com 2018). Herein lays the importance of incorporating security within the apps, which most of the Australian hotels fail to adopt. This is one of the points, which adds vulnerability to the market position of most of the hotels in the threshold of Australia. As compared to the hotels, other sectors of the hospitality industry are technologically advanced, which results in the achievement of large scale customer satisfaction. Incapability of incorporating technology within the operations has declined the number of customers. Herein lays the inappropriate approach towards exploring the flexible marketing strategies (Mason 2015).
Absence of surveys and feedbacks results in poor customer satisfaction. This is the lackadaisical and careless approach of the staffs towards the infrastructural development. This negligence provides the opportunity to enjoy competitive advantage to Airbnb in terms of achieving trust, loyalty and dependence of the customers (Bbc.com 2018). This is in terms of the wide supply chain network helps in increasing the trafficking of the audience towards the brand image. At this point, security is essential in terms of maintaining the safety and security of the opinions forwarded by the customers in terms of accommodation facilities. Lack of training results in the achievement of negative outcomes in maintaining the quality and standards of the rooms. Absence of training compels the hotel staffs to encounter complaints from the customers. Recruitment of the appropriate staffs is a difficult task for the hotels (Masiero, Nicolau and Law 2015). On the other hand, Airbnb has skilled and efficient staffs, which result in the fulfilment of the specific tastes and preferences of the customers. Luxurious accommodation providers recruit trained professionals at low costs. This is in terms of the financial stability. This is impossible for the small hotels, as their business lacks strength (Abc.net.au 2018).
Operational costs is one of the other issues, affecting the business of the accommodation sector. Penalty rates, labor maintenance and GST obligations aggravate the complexities of the hotel staffs to provide quality room service to the customers. Penalty issues still prevail in the current scenario. 71% of the hotels have experienced penalties, which have hampered the business. 46% of the hotels have encountered tax and GST compliances, affecting the business of 48% of the hotels under accommodation sector (Australia.com 2018). Some of the hotels have experienced the challenge of maintaining the balance between operational costs and profit margin. This has adversely affected the purchasing power of the customers belonging to the middle class yet intending to avail high class accommodation facilities for their vacation. Absence of security in the operational costs creates instabilities in the financial parameter. Market research would enhance the awareness regarding the latest software cookies and policies, which would prove beneficial in maintaining the privacy of the private and confidential information of the customers.
(Source: Airbnb.com.au 2018)
The above figure represents the customer switch over into Airbnb. The majority of the customers have switched over from the hotels, as they lack quality within the accommodation facilities. Numerically, 42% of the customers are the leisure users, who have turned into the Airbnb services in the last 12 months. Introduction of social media enabled the critics to estimate that 47% of the customers would switch over to the services of Airbnb. Typical evidence of this lies in the apps, through which the customers can make online bookings (Airbnb.com.au 2018). The figure depicts the incapability of the hotel staffs to provide security within the apps. This has resulted in the drastic decline in the number of customers, adversely affecting the productivity.
Conclusion
Accomodation facilities caters to the needs of “shelter” for the customers during the tenure of vacation. Quality issues decline the number of customers, giving competitive advantage to the companies like Airbnb to achieve large scale customer satisfaction. Lack of training is the main reason behind luring the customers. Incapability to cater to the specific tastes and demands of the clients and the customers adds vulnerability into the market position of the companies under accommodation section. Technological innovation possesses the flexibility to alter the business of the hotels, resorts and the other companies dealing with the accommodation facilities.
Accommodation sector needs to adopt strategic planning for systematizing the business activities. Uploading the image of the newly furnished rooms on the social networking sites would enable the staffs to gain an insight into the approach of the customers. After gaining the approach of the customers, surveys and feedback process need to be adopted for detecting the modifications, which needs to be made in the levied services. Herein lays the appropriateness of evaluation, which would bring to the forefront the drawbacks within the business operations. Market research would make the hotel staffs aware of the latest trends, which the contemporary brands. This research would assist the hotel staffs to secure their position within the competitive ambience of the market. Market research would make the hotel staffs aware of the latest security software and cookies, which would enhance the security of the personal information of the clients and the customers.
References
Abc.net.au (2018). Meriton fined $ million for interfering with negative TripAdvisor reviews. Available at: https://www.abc.net.au/news/2018-07-31/accc-trips-up-meriton-over-fake-reviews/10055618 [Accessed on 13th August 2018]
Airbnb.com.au (2018), About us, Available at: https://www.airbnb.com.au/ [Accessed on 12th August 2018]
Bbc.com (2018). Hotel, restaurants and tourism may face staff shortage. Available at: https://www.bbc.com/news/business-39448424 [Accessed on 13th August 2018]
Bbc.com (2018). Lock out: The Australian hotel that was hacked four times. Available at: https://www.bbc.com/news/business-42352326 [Accessed on 13th August 2018]
Cheer, J.M. and Lew, A.A. eds., 2017. Tourism, resilience and sustainability: Adapting to social, political and economic change. Routledge.
Masiero, L., Nicolau, J.L. and Law, R., 2015. A demand-driven analysis of tourist accommodation price: A quantile regression of room bookings. International Journal of Hospitality Management, 50, pp.1-8.
Mason, P., 2015. Tourism impacts, planning and management. Routledge.
McCool, S.F. and Bosak, K. eds., 2016. Reframing sustainable tourism. Berlin: Springer.
Molina-Azorín, J.F., Tarí, J.J., Pereira-Moliner, J., López-Gamero, M.D. and Pertusa-Ortega, E.M., 2015. The effects of quality and environmental management on competitive advantage: A mixed methods study in the hotel industry. Tourism Management, 50, pp.41-54.
Razli, I.A., Jamal, S.A. and Zahari, M.S.M., 2017. Perceived value in peer-to-peer (P2P) accommodation: A case of Airbnb. Journal of Tourism, Hospitality & Culinary Arts, 9(2), pp.213-224.
Smh.com.au (2018). Hotel sector preparing for a shake up. Available at: https://www.smh.com.au/business/companies/hotel-sector-preparing-for-a-shakeup-20171012-gyzo54.html
Xie, K.L., Zhang, Z. and Zhang, Z., 2014. The business value of online consumer reviews and management response to hotel performance. International Journal of Hospitality Management, 43, pp.1-12.
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