Impact of Airbnb on Ritz's profitability in UK hotel industry

This study aims to critically analyze the impact of using Airbnb upon profitability of Ritz in UK hotel industry. It evaluates the relationship between Airbnb as an advance technology and profitability of hotel industry, challenges faced by Ritz while complying with advance technology such as Airbnb and recommends the best ways through which challenges faced by hotel industry can be reduced.

Business research project

Table of Contents
CHAPTER 1: INTRODUCTION....................................................................................................2
Rationale......................................................................................................................................2
Research Question.......................................................................................................................2
Research Aim...............................................................................................................................3
Research Objectives.....................................................................................................................3
CHAPTER 2: LITERATURE REVIEW.........................................................................................4
CHAPTER 3: METHODOLOGY...................................................................................................7
REFERENCES..............................................................................................................................10

Topic: To investigate the impact of using Airbnb as a technological driver of change upon
company’s profitability within UK hotel industry: A study on Ritz.
CHAPTER 1: INTRODUCTION
In this digital era, companies complied with different advance technologies in order to
smoothen the business operations. In hotel industry, majority of the hotels are uses online
application in order to provide assistance to their customers and this in turn helps to improve the
profit. Similarly, the present study also highlight about Airbnb which is now considered as a
driver of change in hotel industry affect the business performance either in positive or negative
manner. The study also evaluate how company faces challenges while using such advance
technology and the impact drawn upon business profitability.
Rationale
The reason for choosing this topic over other is to evaluate the impact of using Airbnb as
an advance technology upon Ritz profitability. In this digitalization era, companies keep uses
range of advance technology in order to improve the business operations. Similarly, hotel
industry also uses different technique in order to attract the customers but the negative reviews
upon online sites affect the buying behavior of the customers and as a result, it affect the
business performance as well. Therefore, this in turn considered as an issue for the present study
because disrupted technology like Airbnb somehow affect the business of hotel industry into
negative manner, as it stole market share and pressurize on hotel rates that lower down the
business brand image.
Further, it can be reflected that with the help of chosen topic, scholar also determine the
challenges faced by the hotels when industry operating bookings through Airbnb. So, it can be
stated that by choosing this topic, scholar shed a light upon how Airbnb affect the financial
performance of the hotels and the ways through which managers of the company implement
ways to minimize challenges. Thus, by using qualitative research type, scholar shed a light upon
different ways through advance technology causes direct impact over the business performance.
Research Question
Q1: What is the concept of Airbnb as a driver of change in technology?

Q2: What is the relationship between Airbnb and hotel’s profitability?
Q3: What are the different challenges faced by the Ritz industry while complying with advance
technology such as Airbnb?
Research Aim
The aim of the study is to critically analyse the impact of using Airbnb upon profitability
of Ritz.
Research Objectives
 To understand the concept of Airbnb as a driver of change in technology
 To critically analyse the relationship between Airbnb as an advance technology and
profitability of hotel industry.
 To identify different challenges faced by the Ritz industry while complying with advance
technology such as Airbnb.
 To recommend the best ways through which challenges faced by hotel industry can be
reduced.

CHAPTER 2: LITERATURE REVIEW
The current section will help to gain a knowledge and understanding pertaining to
academic literature with regard to the chosen topic. For that, different sources such as books and
article, will be selected that assist to create a better outcome and derive valid outcome. That is
why, the present section develop different themes by considering research objectives in order to
evaluate the results and trend run within a hotel industry.
Theme 1: concept of Airbnb as a driver of change in technology
According to Chang and Sokol (2022) Airbnb is an online marketplace concept that assist
people to rent out their homes with those people who are looking for accommodation with their
locality. The concept was developed in 2008 and the platform enable person to determine
available spaces and also earn extra income for rent. Therefore, it is entire based upon advance
technology which assist travelers to book their unique homestay from local host and save money
and enjoy the services by interacting with locals. The idea creation of Airbnb was in 2007 and in
August 2008, it was launched while in 2009, it was accepted in market and receive a funding that
helps to launch its own website. Till 2017, it get funding from different sources in order to
improve its operations in market.
Theme 2: relationship between Airbnb as an advance technology and profitability of hotel
industry
As per the view of Jandrić and Hayes (2021) there is a negative impact identified over the
hotel industry because it provide services at low cost as compared to group travel friendly. That
is why, it is recognized as a technology disruption, as 1% growth in Airbnb leads to 0.02%
decrease across all segments. Most of the research also indicated that Airbnb supply grew over
by 100% year by year and in the next ten years it will attract more than 50% of the total
population and this in turn causes a negative impact over the hotel industry i.e. 2%. Therefore, it
can be stated that not small hotels but the top hotels has been badly hit by Airbnb supply. The
statistics shows that in 2016, 2.5% revenue decreases and around 5 million revenue lost by the
hotels due to implementation of this advance technology. Schmidt and van der Sijde (2022)
critically analysed that there is a positive impact identified over the customer buying behavior

because they got the accommodation facilities within low rates and this in turn causes positive
impact over the satisfaction level. It is so because the prices of hotels is 1.5% high and that is
why, most of the travelers prefer Airbnb in order to make their travelling more enjoyable.
Thakur, AlSaleh and Hale (2022) also reflected that among one of the trusted services in
the world, Airbnb provide easy, enjoyable and safe travelling to the visitors and this is not
possible in other online and official websites. Another aspect that diverted people from
company’s official website to Airbnb is such that it verify personal profiles and also maintain
smart messaging system to their hosts so that they can communicate easily. Under Technology
Acceptance model, the online platform also make users accept the services offered by the
company by complying with advance technology. Being different specialize features, traveler
prefer this over other and this in turn causes negative impact over the revenue of hotels because
people visit other places instead of hotels that create loss in its revenue. Arreza (2022) critically
analysed that with the evolution of Airbnb, the hotels start implementing short term booking
because earlier they do not offer such that facilities to their customers and now most of the top
hotels start 15% booking for their customers. Along with this, Airbnb gets a high rating for brand
advocacy and this in turn indicate the customer loyalty and repeat customers. Thus, customers
also make an advantage of using Airbnb because they connect in broader manner and hotels
increases their customer base.
Overall, it can be stated that there are both positive and negative impact of using Airbnb
upon the hotel industry because it pressurize the business with regard to price whereas many
hotels took it as a challenge in which company implement effective ways to keep attract
customers towards it.
Theme 3: different challenges faced by the Ritz industry while complying with advance
technology such as Airbnb
Chang and Sokol (2022) investigated in their study that the biggest challenge faced by the
hotel is related to increased competition because there are lots of rooms available in the locality
and people keep posted the same in order to keep attract the customers. This in turn increases the
competition and due to increase in the prices hotels keep loosing their customer base. Such that
entry of Airbnb resulted in 1.3% losses in hotels industry and this in turn reflected that managers

need to implement ways to improve the customer base. On the other side, high cost of operations
is also considered the biggest challenge faced by hotel industry because Airbnb offer the services
at low rates as compared to normal hotels and this in turn also affect the guest satisfaction too.
Silva and Grützmann (2022) also supported that it is necessary to implement ways that assist to
increases the guest satisfaction so that it generate a better outcome. Hence, the manager of the
company has to make actions that somehow assist to create a better outcome and also satisfy the
need of customers so that they can attract the range of customers.

CHAPTER 3: METHODOLOGY
Research Methodology
There are two main types of research methods used by the researcher which includes
qualitative and quantitative. With the help of qualitative research, scholar explore the topic in
more depth as compared to quantitative, whereas the type is not quantify how many audience
answer. On the other side, advantage of using quantitative is such that it provides reliable source
and generalize the findings, while its cons is such that it is less involved into thoughts and
motivation (Kanholkar and Dharkar, 2022). In the present study, researcher will adopt only
qualitative research method that helps to determine the theory and key aspect related to Airbnb
and its impact over the profitability of hotel’s industry. This in turn assist to create a better
outcome because the chosen topic assist to determine only theoretical aspects and evaluate the
results effectually.
Sampling
The researcher will adopt simple random sampling method because it helps to determine
the respondents quickly and in random manner. The population for this study is entire employees
and managers of technological department in Ritz where 30 employees of Ritz are randomly
selected in order to determine their views with regard to impact of Airbnb and its impact over the
hotel’s financial performance. The rationale for choosing such participants over other is such that
they will provide better outcome with regard to the chosen topic.
Data collection methods
In the present study, scholar will choose both primary as well as secondary data
collection methods that helps to conduct study in effective manner (Daniel, 2022). Like, under
primary survey method will be adopted through the means of questionnaire because it provide
relevant questions to respondents that help to derive better outcome. Whereas, under secondary
data collection methods, scholar uses relevant books and articles that published after 2017.
Data analysis methods

Scholar will adopted only thematic data analysis method in which different graphs and
themes will be presented in order to improve the results in an effective manner (Singh, 2022).
The advantage of using this methodology is such that it will help to present the findings in
accurate manner but on the other side, it is time consuming method and do not provide effective
results, as findings are in the basis of researcher’s opinion.
Ethical considerations
In order to conduct the research in an authentic manner, researcher add reference list at
the end and comply with Data protection act in order to maintain the confidentiality. Along with
this, consent form will be signed in order to involve the respondents into a research. There
should be no misscommunicaton between the researcher and respondents otherwise it affect the
results negatively.
Research limitations
Time, money are considered the biggest limitation of the present study and to remove the
same, qualitative study has been adopted that took less time and conclude the results in more
effectively (Zhou, Li and Sun, 2022). Further, unavailability of the sources are also considered
another limitation that need to be overcome and this can be minimized by using key word in the
research.
gantt chart
Task
Mode Task Name Duration Start Finish Predecessors
1 selecting topic 2 days Thu 3/31/22 Fri 4/1/22
2 developing aim and
objectives 2 days Mon 4/4/22 Tue 4/5/22 1
3 Analyzing sources for
thesis 3 days Wed 4/6/22 Fri 4/8/22 1,2
4 Conducting LR 4 days Mon 4/11/22 Thu 4/14/22 3
5 Developing research
methodology 3 days Fri 4/15/22 Tue 4/19/22 4
6 Developing questionnaire 3 days Wed 4/20/22 Fri 4/22/22 2,5
7 send to respondents 4 days Mon 4/25/22 Thu 4/28/22 6

8 data analysis 2 days Fri 4/29/22 Mon 5/2/22 5,7
9 conclusion 1 day Tue 5/3/22 Tue 5/3/22 8
10 formatting and
submission 1 day Wed 5/4/22 Wed 5/4/22 9
11 waiting for feedback 7 days Thu 5/5/22 Fri 5/13/22 10
12 modification and
submission 2 days Mon 5/16/22 Tue 5/17/22 11

REFERENCES
Books and Journals
Arreza, M.K.B., 2022. Virtual Hotel Operator (VHO) Affiliated Small Accommodation
Business: A Comparison of Perceived Performance. Journal of Community Development
Research (Humanities and Social Sciences). 15(1). pp.1-13.
Chang, H.H. and Sokol, D.D., 2022. How incumbents respond to competition from innovative
disruptors in the sharing economy—The impact of Airbnb on hotel performance. Strategic
Management Journal. 43(3). pp.425-446.
Chang, H.H. and Sokol, D.D., 2022. How incumbents respond to competition from innovative
disruptors in the sharing economy—The impact of Airbnb on hotel performance. Strategic
Management Journal. 43(3). pp.425-446.
Daniel, B., 2022. The Role of Research Methodology in Enhancing Postgraduate Students
Research Experience. Electronic Journal of Business Research Methods. 20(1). pp.pp34-
48.
Jandrić, P. and Hayes, S., 2021. The Blockchain University: Disrupting “Disruption”?.
In Conceptualizing and Innovating Education and Work with Networked Learning (pp.
159-170). Springer, Cham.
Kanholkar, K. and Dharkar, N., 2022. Research Methodology. Ashok Yakkaldevi.
Schmidt, A.L. and van der Sijde, P., 2022. Disruption by design? Classification framework for
the archetypes of disruptive business models. R&D Management.
Silva, J.P.N. and Grützmann, A., 2022. The evolution of the disruptive ecosystem: a framework
integrating disruption, ecosystems, and business models. European Journal of Innovation
Management.
Singh, K.K., 2022. Research Methodology in Social Science. KK Publications.
Thakur, R., AlSaleh, D. and Hale, D., 2022. Digital disruption: a managers’ eye view. Journal of
Business & Industrial Marketing.
Zhou, Y., Li, H. and Sun, H., 2022. Metalloproteomics for Biomedical Research: Methodology
and Applications. Annual Review of Biochemistry. 91.