Impact of Airbnb on Accommodation Industry: Pros and Cons

This study analyzes the impact of Airbnb on the accommodation industry, highlighting its pros and cons. It discusses how Airbnb is helping in the development of better interaction of demand and supply, and how it is posing a high threat to hotels. The study also emphasizes the importance of innovation in the accommodation industry to increase revenue and overall economic growth.

Running head: Accommodation operations
Accommodation operations
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1Accommodation operations
Table of contents
Introduction................................................................................................................................3
Clear understanding of the selected topic of discussion............................................................3
Its impact on the accommodation sector in the current environment........................................4
Well explained pros and cons of the arguments put forward.....................................................5
Coming to a conclusion from your point of view......................................................................5
Importance to the accommodation sector..................................................................................6
Conclusion..................................................................................................................................7
Reference list..............................................................................................................................8

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Introduction
The study is mainly going to introduce the impact of the air bnb in the hospitality
industry. Moreover, the concept of air bnb is important service that most of the countries are
hosting extra portion of their property. The air bnb is one of the services that are helping the
people living in the locality in search of properties. The study is important in the sense that it
will definitely help the incorporation of better level of property sharing. The resource
distribution, will definitely going to help in the improvement of the company to indulge in
better level of technological up gradation. Through the involvement of better level of
resource based distribution the company is going to indulge the development of better place
of accommodation. The study is significant in the sense that through the development of the
business, it is important for the development of better resource.
Clear understanding of the selected topic of discussion
Air bnb is important in the sense that through the development of property renting
business, most of the companies will be able to minimise the cost of operation and through
the process of resource sharing, it is important for the hosts and visitors to indulge the
development of resource sharing. This is an important concept for the development of
resource based activities that will definitely increase the sharing of resource and will maintain
the demand and supply that are having within the market of housing property (Edelman and
Geradin, 2015). Moreover, the air bnb company is important because of the fact that through
the development of better utility, the innovation in the technologies that will definitely
increase the chance of giving high level of protection. The air bnb is giving the facility of
provides protection for up to $1,000,000 in damages to covered property in the rare event of
guest damage, in eligible countries." However, the main disadvantage of this kind of service
is mainly that the renting of the rooms is not in a same way unlike hotel chains. This is

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important in the sense that most of the customers often get better level of resources (Ert, et al.
2016). This will definitely help the economic activities, to flourish that will definitely
increase the resource that will definitely increase the overall resource to be fully utilised.
Its impact on the accommodation sector in the current environment
Current accommodation sector is not having so much level of growth. Most of the
tourism industry is having huge number of middleman and due to their presence the tourism
industry is having high price of hotels. Throughout the incorporation of high level of
middleman most of the hotels cannot be afforded by the common people. In order to
minimise the problems that has been raised from the crisis the air bnb is helping in
developing a market place that will allow the economy to urge the hosts to use the unused
part of their property to use for the tourists purpose. However, the concept of home stay has
been predominantly determined from the concept of accommodation. However, the airbnb is
having US market as its largest market. In New York City, Airbnb comprised 9.7% of
accommodation demand, equalling approximately 8,000 rooms per night in Q1 2016
(Makarand Mody, 2019). The current accommodated demand of the airbnb is around 3% of
total demand of the hotel industry. The importance of these air bnb is lying on the
improvement of cleanliness and proper maintenance of the rooms and they are mostly
preferred by the customers. This is highlighting the fact that in order to increase the
development of resources, the customers are getting satisfaction while staying within the air
bnb or home stay apart from staying in hotel or resorts.

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Well explained pros and cons of the arguments put forward
In every hoteling industry, the present of cons is present in the form of high price
within the hoteling industry. Another pros that is being seen within the hoteling industry is
that the poor maintenance of the hotel rooms and other services. This is because most of the
hotels are being grown up on the verge of tourists area. If the customers are choosing the
hotels far from tourist place then they are not getting desired level of services. On the other
hand, pros of air bnb is that it is operating more as a market place where the demand and
suppliers are meeting and they are getting their properties based on their choice and price is
being open for bargaining as per based on their income level.
It is an important concept in the accommodation industry as another cons for the
industry is that food industry is associated. Now if any customer has to choose any hotel to
stay he has to bear extra cost to have some foods or they have to consume the foods cooked
by the hotel at a high price (Guttentag, 2015). This cost of feedings can be minimised in the
home stay or air bnb. In this form of market, when tourist are choosing home stay then they
can use the kitchen and even they can purchase the necessary goods and services from the
market.
Coming to a conclusion from your point of view
From the whole analysis it can be seen that the overall development of the air bnb
market is basically helping the development of better interaction of demand and supply. This
is an important concept for the development of hoteling industry. Previously the hoteling
industry thought that bnb industry will not be the biggest threat for the industry. Now the
current situation in the accommodation industry is feeling threat from the air bnb industry.
This is an open industry, where the demand and suppliers are meeting and purchasing

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services they are liking. Recent studies have seen that air bnb industry has outperformed the
hoteling industry, in terms of personalisation. Due to huge array of locations the guest and
host is having perfect macro segmentation. The homes in which the customers are setting is
different in nature and they have unique level of experiences (Ikkala and Lampinen, 2015).
On the other hand, the hoteling industry is having range of hotels and most of the hotel
companies will segregate the hotels based on the price. This is important factor in the sense
that services that are being supplied by these hotels is also having similar activities. The
hoteling industry is more or less following perfect competition and on the other hand, the
home stay or air bnb is serving unique services. They are providing the customers services
that are not only available in the market at a affordable price and the healthiness, maintenance
is basically the key usp point of the home services.
Importance to the accommodation sector
The accommodation sector of world tourism industry is having many loopholes that
are minimising customer satisfaction. The system of air bnb is quite different from the
hoteling industry. They charge guests a 9 − 12% service fee every time a reservation is
booked, depending on the length of the reservation, and they charge hosts a 3% service fee to
cover the cost of processing payments. Along with the development in the business, in the
offline industry, the air bnb is also growing its online market (Net, 2019). Currently the
online market of the online market of airbnb is growing. The site is being used by more than
50,000 renters per night and the market value is more than $2.5 billion after their total
financial performance in their quarter. It is an important because of the fact that through the
involvement of resources, it has been seen that renters are enjoying the home stay and they
are allowing the development of better quality of lifestyle with the increase in the business
(Oskam and Boswijk, 2016). Moreover, in the accommodation industry the companies need

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to improve their innovation process that will definitely increase the overall revenue of the
market as well as whole economy will flourish. Through the incorporation of better level of
technology the accommodation industry need to increase the development of resources.
Conclusion
The whole study has claimed the fact that home stay or air bnb is having huge benefit
that will definitely increase the development of proper level of revenue and the overall
structure of the accommodation industry. The overall accommodation industry need to
improve their situation so that the economy will be able to flourish. In order to indulge the
economic activities of the resource distribution, the home stay market is posing high threat to
the hotels. Most of the toursists are preferring the home stay and other services that are being
provided by these hosts who are allowing people to stay in their property.

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Reference list
Edelman, B.G. and Geradin, D., 2015. Efficiencies and regulatory shortcuts: How should we
regulate companies like Airbnb and Uber. Stan. Tech. L. Rev., 19, p.293.
Ert, E., Fleischer, A. and Magen, N., 2016. Trust and reputation in the sharing economy: The
role of personal photos in Airbnb. Tourism Management, 55, pp.62-73.
Guttentag, D., 2015. Airbnb: disruptive innovation and the rise of an informal tourism
accommodation sector. Current issues in Tourism, 18(12), pp.1192-1217.
Ikkala, T. and Lampinen, A., 2015, February. Monetizing network hospitality: Hospitality
and sociability in the context of Airbnb. In Proceedings of the 18th ACM conference on
computer supported cooperative work & social computing (pp. 1033-1044). ACM.
Liang, L.J., Choi, H.C. and Joppe, M., 2018. Understanding repurchase intention of Airbnb
consumers: perceived authenticity, electronic word-of-mouth, and price sensitivity. Journal of
Travel & Tourism Marketing, 35(1), pp.73-89.
Makarand Mody, M. (2019). Airbnb and the Hotel Industry: The Past, Present, and Future of
Sales, Marketing, Branding, and Revenue Management. Retrieved 13 August 2019, from
https://www.bu.edu/bhr/2018/10/31/airbnb-and-the-hotel-industry-the-past-present-and-
future-of-sales-marketing-branding-and-revenue-management/
McNamara, B., 2015. Airbnb: A not-so-safe resting place. Colo. Tech. LJ, 13, p.149.
Net, H. (2019). The Impact of AirBnb on Hotel and Hospitality Industry | By Ahmed
Mahmoud – Hospitality Net. Retrieved 13 August 2019, from
https://www.hospitalitynet.org/opinion/4074708.html
Oskam, J. and Boswijk, A., 2016. Airbnb: the future of networked hospitality businesses.
Journal of Tourism Futures, 2(1), pp.22-42.

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Varma, A., Jukic, N., Pestek, A., Shultz, C.J. and Nestorov, S., 2016. Airbnb: Exciting
innovation or passing fad?. Tourism Management Perspectives, 20, pp.228-237.
Zekanovic-Korona, L. and Grzunov, J., 2014, May. Evaluation of shared digital economy
adoption: Case of Airbnb. In 2014 37th International Convention on Information and
Communication Technology, Electronics and Microelectronics (MIPRO) (pp. 1574-1579).
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Zervas, G., Proserpio, D. and Byers, J.W., 2017. The rise of the sharing economy: Estimating
the impact of Airbnb on the hotel industry. Journal of marketing research, 54(5), pp.687-705.