The research has revolved around the impact of Airbnb on the hotel industry on the United States of America and the European countries. The concept has modernized the trend of accommodation for the travellers in the worldwide places. Travellers can now avail accommodation in a flat or in a villa for a day or for a week. Services such as of Airbnb have changed the behaviours of travellers in relation to their booking of places to live. The hotel industry and the tourism sector are both interrelated by means of interrelated business. Of long, the hotel industry has remained an ultimate choice for the travellers for their accommodation option. However, the recent few years have witnessed a shifting trend for making the selection on the choice of accommodation. Services such as offered by Airbnb and others like it have significantly influenced the traveller’s decision-making on their choice of accommodation option. The shifting trend is because of various reasons such as low cost, experience of the local culture, convenient location and household amenities. Services such as Airbnb offer a package cheaper than the traditional hotels.
Additionally, they are providing spacious flat or villa where travellers can have an extended spending, which is not possible with traditional hotels. Airbnb also captures the cultural values of the local tourists. This is why they have been successful in attracting the travellers in huge numbers. Household amenities are another feature that has benefitted the business of Airbnb. It offers home like experience in spacious flats or villa for a day or a week or more than that. Convenient location is another characteristic of the Airbnb Company, which significantly attracts travellers towards the concept. They are close to beach and other attractive locales. There are some who gives high values to their choice of destination over any other offerings (Kurtz 2014). The main purpose of this paper is to get information on the fact that why more people choose Airbnb.
The different resources that have been cited on the research works collectively points to a single fact that most people now prefer Airbnb services on the conventional hotel concept. The practicality of the services that are promised to the travellers is one of those reasons, which are attracting their interests towards the concept (Marin 2015). All the ten sources that are cited after doing research on the chosen topic do briefly explain the changing mentalities of travellers. The sources have shown at the numerous places that the incrementing inclination of customers towards Airbnb services is affecting the business of traditional hotel industry in the United States of America. A fiscal report on the impact of the Airbnb services on the lodging market of the New York City does very well illustrate the various kinds of losses occurred to the traditional industry. The direct loss occurred to the traditional industry is equal to 21%. The ancillary losses are equal to 7%. Construction losses are around 51%. This report does very well show the enhancing trend for the Airbnb services (Zervas, Proserpio and Byers 2014).
Household amenities are another factor that is encouraging the decision-making of customers. At Airbnb, they provide house like experience with a number of such features that is never viable with the traditional accommodation style with hotels. Travellers are getting attracted because Airbnb do rent the entire homes in spite of sharing this with other hosts. This is indeed good for privacy reasons. A survey conducted by Guttentag in the year 2015 had 844 respondents. They had received varied responses in support of reasons that are compelling the travellers towards the Airbnb services (Ryerson University 2017). Household amenities have been voted as one of those factors that attract large customer base towards the Airbnb concept (Marin 2015). Sixty one percent of the total booking that the respondents have done was because it offered them better services than the budgeted hotels. Interestingly, 26 percent of the respondents had made the bookings just because they got longer staying opportunity in the different Airbnb accommodation resources (Ryerson University 2017).
Airbnb’s effects on the traditional hotel services can groom to a longer participation than it was anticipated. The eight-year-old company seems to have driven the attraction of travellers who have already availed its services (Aznar et al. 2017). Travellers are getting attracted towards the concept because of multiple reasons of which the commonest of reasons had been the offerings of the services in practicality. The living condition in the services provided by the Airbnb is more like a home, which is also one of the reasons for the travellers for getting attracted towards the services. This is economically good for the Airbnb services; however, this is not good for the society where incomes are shared. The concept has given two kinds of options to the travellers, which is good for them, as they would have multiple options for the accommodation.
Furthermore, it is painful for one industry while good for another. The capitalist have started their talks on attaining a balance progress of both the sectors. According to the economic capitalist, there should be a balance growth of both the concepts. Traditional hotels in particular are their concerns because services such as Airbnb are affecting their performances (Quattrone et al. 2016). The cheaper rates that Airbnb offers to its customers are not viable to the traditional hotels. This is because the traditional hotels have to follow certain rules and regulations that also include the tax payment made to the government. On other hand, the Airbnb services have not yet been regulated or governed by the government rules and regulations. This may be one of the reasons behind the cheaper offering of the Airbnb Company (Guttentag 2016).
Low cost prices for the accommodation are one of those factors, which are giving Airbnb an edge over the traditional hotels. Low cost offering on other hand is controversial also. Airbnb is not any exception. They are offering cheaper prices to the travellers. The rentals provided by the company have perhaps created issues as the advertised rentals were up against the local rules and regulations of renting. For example, in the New York City, it is prohibited to provide room on rents for a period less than 30 days. This is only possible if the tenants or the owners are themselves sharing the apartments or rooms (Coldwell 2017). Another issue is related to the tax payment as many cities have rules such as holiday accommodation must necessarily pay taxes to the tourist or the hotel. The company has recently been fined in Barcelona for breaking the local tourism laws. They have been charged a whopping €30,000 as a fine to break the local tourism laws. They are facing criticism in places such as New York, San Francisco, New Orleans, Malibu and Berlin (Levendis and Dicle 2016). Despite of all the criticism that has kept on surrounding the company, it is rapidly becoming the choice of customers. The low cost prices for a range of services have encouraged a large number of customers for Airbnb services.
Experience the local culture is another strategy, which is influencing the large customer fall for the Airbnb services. The local culture is to provide solution to the requirement of home like experience. The local culture is to get a luxurious experience at the most feasible cost. The local culture is to get a grand apartment or a villa for a long stay. The concept and the local culture’s requirement are fulfilled with the collaboration of Airbnb and hosts clients that offers them flat or villa for lease. Travellers now prefer the selection of independent hosts that are linked to the Airbnb to the traditional hotel rooms (Russell and Wall 2015).
Airbnb services have divided their business in two groups such as the hosts and the guests. Hosts give them their spare rooms, castle or villa for which Airbnb charges certain amount. Airbnb then offers the available different accommodation resources to the guests or travellers. In doing so Airbnb charges, a higher amount to the guests than the charges set by the hosts. This strategy enables them in attaining a good profit on each booking. Airbnb is earning its revenues from both the host’s and the guest’s side. This is highly profitable to the company. Interestingly, the rates charged to the travellers are lower than the rates of traditional hotels, which is another asset for such services (Net 2017).
Convenient location is another factor, which is making up business for the Airbnb Company. The Airbnb Company selects locations close to beach and other beautiful locales to attract their target customers. Their customers have indeed proved them right as they have so far responded hugely to the concept. Convenient location has huge interference in the interest making for destination location. A location close to beach or other attractive city places are always the first preference when customers plan for a trip. The best thing about the Airbnb service is the selection of attractive locations that offers complete package to travellers with cost effective, cultural oriented and homely like experiences.
Furthermore, the offers are indeed rare with the traditional hotels as they construct their hotels in the form of big towers, which is geographically unsuitable to the beach sites. Travellers stay for a longer trip where they are close to natural places such as hill station, forestry places, beach sites etc. Airbnb Company has adjoined the multi-experience at just one place with the beautiful surroundings. The importance of convenient locations can be understood with a fact that some travellers often pay a bit higher for their trip in attractive locations. They are intensified to such level that they even compromise some of their preferences over the convenient location (Marin 2015).
Different resources that are used for the research works and for the literature review more or less are relevant to each other in overall understanding; however, they differ in their way of representation. The articles used for the research work mainly focus on the benefits of Airbnb services and the direct competition that it provides to the traditional hotels in the United States of America and the European countries. However, it differs to the sources used in the literature review because those sources do also cover controversies that have become part of the company.
The annoted bibliography has certain gaps as well. It has failed to communicate the negative part of the Airbnb services. In addition to this, it has also not covered the controversies, which the company is facing in different parts of world such as the New York City, San Francisco, Barcelona, New Orleans and few others (Coyle and Yeung 2015). Methodologically, the resources are useful for understanding the topic. The resources are also useful for researching the topic and writing a literature review on it. However, it could have been much better if it had some statistical facts in it as well. Statistical facts are highly required to conduct qualitative study on the research topic. Qualitative research provides quality data, which is useful in getting deeper information of the research topic. This is because it involves interviews with the higher officials in the organization or in the industry. Nevertheless, a topic as such depends highly on quality data, which would be used to conclude the findings of the research.
The business concept of Airbnb is significantly popular for the travellers across the globe; however, this is not similarly profitable to the traditional hotel industry. The hotel industry now has constraints to maintain a healthy business growth, which means a direct competition with the Airbnb Company. This is indeed very difficult for the traditional hotel industry because they have to carry the pressure of various kinds of tax payments as well. This is one such thing, which has not yet been imposed strictly on the Airbnb Company. Travellers who have been into the services provided by the Airbnb they are not considering any other option. The cheaper prices of homes, beautiful locations, local culture experience and a home like experience have all collectively contributed in the changed perceptions for lodging. The gap that has been identified would attract few other research works on the subject topic. This would be done to analyze the future consideration from the Airbnb Company, which has faced certain controversies for its tax rules violation. Future research works might also be done to check the shared economy of the traditional hotel industry and the Airbnb Company and its economy on both the sectors.
References
Aznar, J. et al. 2017. The irruption of Airbnb and its effects on hotel profitability: An analysis of Barcelona’s hotel sector. Intangible Capital 13(1), pp. 147-159.
Coldwell, W. 2017. Airbnb’s legal troubles: what are the issues?. [online] the Guardian. Available at: https://www.theguardian.com/travel/2014/jul/08/airbnb-legal-troubles-what-are-the-issues [Accessed 30 Jun. 2017].
Coyle, D. and Yeung, T. 2015. Understanding AirBnB in Fourteen European cities. Retrieved 21 June, 2017, from https://www.tse-fr.eu/sites/default/files/TSE/documents/ChaireJJL/PolicyPapers/2016_30_12_pp_understanding_airbnb_in_14_european_cities_coyle_yeung_v.3.1.pdf
Guttentag, D. 2016. Airbnb: disruptive innovation and the rise of an informal tourism accommodation sector. Current Issues in Tourism 18(12), pp.1192-1217.
Hospitality Ireland, 2016. The Air Apparent. Retrieved 21 June, 2017, from https://eds.b.ebscohost.com/eds/pdfviewer/pdfviewer?sid=fbd16c5a-21ad-4898-82e5-4a503b46edfb%40sessionmgr120&vid=0&hid=113
Impact analysis report. 2015. Airbnb and Impacts on the New York City Lodging Market and Economy. Retrieved 21 June, 2017, from https://www.hanyc.org/wp-content/uploads/2015/10/HVS-Impact-Study-FINAL-Airbnb-and-the-NYC-Lodging-Market-10-27-15-copy.pdf
Kurtz, M. 2014. Airbnb’s Inroads into the Hotel Industry. Retrieved 21 June, 2017, from https://eds.b.ebscohost.com/eds/pdfviewer/pdfviewer?sid=7a78fa2e-49ea-42d6-b774-2e1c3649936d%40sessionmgr104&vid=0&hid=113
Levendis, J. and Dicle, M. 2016. The Economic Impact of Airbnb on New Orleans. Retrieved 21 June, 2017, from https://www.airbnbaction.com/wp-content/uploads/2016/10/Final_rbtn_economic_impact_study-2016.pdf
Marin, M. 2015. HB on the Scene. Hotel Business 24(7), pp. 11-12.
Net, H. 2017. The Impact of AirBnb on Hotel and Hospitality Industry | By Ahmed Mahmoud – Hospitality Net. [online] Hospitality Net. Available at: https://www.hospitalitynet.org/opinion/4074708.html [Accessed 30 Jun. 2017].
Quattrone, G. et al. 2016. Who Benefits from the “Sharing” Economy of Airbnb? International World Wide Web Conference Committee.
Russell, B. and Wall, R. 2015. Five Key Takeaways. Retrieved 21 June, 2017, from https://eds.b.ebscohost.com/eds/pdfviewer/pdfviewer?sid=ceb8ed14-d03d-468a-bd0b-0a7e288bf3ae%40sessionmgr101&vid=0&hid=113
Ryerson University. 2017. Why tourists choose Airbnb over hotels. [online] Available at: https://www.ryerson.ca/news-events/news/2016/10/why-tourists-choose-airbnb-over-hotels/ [Accessed 30 Jun. 2017].
Zervas, G., Proserpio, D. and Byers, J.W., 2014. The rise of the sharing economy: Estimating the impact of Airbnb on the hotel industry. Journal of Marketing Research.
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