Assignment on Airbnb (PDF)

Impact that Airbnb has had on the hotel sector in other parts of the world 1
IMPACT THAT AIRBNB HAS HAD ON THE HOTEL SECTOR IN OTHER PARTS OF THE
WORLD
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Impact that Airbnb has had on the hotel sector in other parts of the world 2
Introduction
Ideas that deal with the process of sharing economy have assisted in creating more doors
to operations of various businesses within the sector of hospitality. However, these economies
have resulted in disruption on standard operation ns of most hotels globally. Airbnb has stayed to
be one of the current organizations that work by sharing economy that has aimed at developing
the relevant market for various individuals to be able to improve on activities of advertisement
and book the exceptional services along with exclusive bookings for accommodations in the
international society. Advancements in operations of Airbnb have made it become the even more
significant threat to effective action of hotels that need essential strategies to be undertaken by
different managers and CEOs’ of hotels. The growing competitions by Airbnb in production and
supply of food and beverages spaces have to lead to disruptive forces that are striking the hotel
industry from all angles. McGowan and Mahon (2018, p. 37) believed that such effects remain to
be the driving innovation across the hospitality industry as hotel brands along with operators
implement advanced concepts that aim at improving their offering as well as keeping their guests
returning for more quality services and products. Besides, hotel and Airbnb have been able to
improve their operations in recent market by the use of advanced technology that is essential in
provision of the easy access to different services and products that they offer in markets. With
the ever-increasing amount of operation transactions in hospitality industry, present business
activities within sector of hotels have shown growing concerns over how Airbnb impacts the
market (Shwartz 2012, p. 69). Therefore, primary objective of this investigative paper targets at
examining different impacts that Airbnb have had on the hotel sectors in several parts of the
international society while recommending different strategies that hotel management and CEO
can utilize to control such impacts.

Impact that Airbnb has had on the hotel sector in other parts of the world 3
Influence of Airbnb on hotel sector
The effects of services of Airbnb on the operations of hospitality sector may not be as
acute as initially feared by different business operators globally. The so-called economy has been
able to explode in present days and has resulted in significant distractions to established sectors
in hospitality industry. The operations of hotel sectors have not been left untouched by this
advanced economy (Dusheiko and Gravelle 2017, p. 361). Ever since the establishment of
Airbnb, the platforms of home sharing, hoteliers have been trying assessing the effects of the
sharing economy in hospitality sector. Therefore, some of the impacts that Airbnb has had on
the hotel sector in different regions around the global society include loss in revenue, decline in
the power of distribution in markets, and lower charges on rooms among other factors.
Loss of revenue
Business operations of Airbnb have increasingly become the vital danger to enterprises of
hotel bookings as guests are able to book rooms online. Hotel management has been using more
resources to compete with competition pose to them by Airbnb by ensuring that they provide
improved services. The resources used make the hotel to lose more revenues that they might
have used to construct or develop more services and facilities than research on how to deal with
Airbnb (Gyodi 2017, p. 159). Besides, operations of Airbnb leads to losses in financial elements
as hotel losses hue sum of indirect money revenues yearly to Airbnb. Activities of Airbnb have
lead to loss of employment sector as the number of guests that prefer services and products of
hotel reduces. These reductions in number of clients have resulted in declining in profit that the
hotel sector makes in every financial year. Besides, the establishment of improved operations of
Airbnb internationally ad lead to adverse effects on activities of hotels as most hotels losses their

Impact that Airbnb has had on the hotel sector in other parts of the world 4
guests that always prefer to book rooms from different places to have the new experience on
quality of services offered (Jaremen and Nawrocka 2017, p. 291). The process of booking rooms
in Airbnb make different hotels that deals with rooms to lose more money during such moments
and this results to reduction in their operations.
Decreasing power of distribution of various hotel sectors in markets
Operations of Airbnb has remained to be the significant driver of different rates of
booking rooms in hotels with reduction in amount of profits as other supply impacts of
distribution power of various services of booking In international markets. Instances of
oversupply of booking services that Airbnb offer had adverse impact on different values of hotel
operations. As illustrated by Monet (2016, p. 21), operations of Airbnb has had immense effect
on collection of revenue among hotels. The article reports that over thirty percent of cases of lost
revenues for hotels result from decrease in hotel booking services while Airbnb has seen steady
rise in booking services. Utilization of different multi-sided platforms of technology within
operations of Airbnb that has enabled it to collectively develop the use of under-utilized
inventory by hotel sector through the process of sharing charges that allow every targeted client
to book different rooms in accordance to their ability.
Lowering costs of rooms among hotels
Unlike services offered by traditional hotel sectors that have remained to comply with
current laws that comprise of safety codes, local fire outbreaks, and needs of ADA among other
regulations, Airbnb stays to be firm on offering accommodation at lower rates. The decrease in
rates offered by Airbnb has been possible due to the fact that it does not provide the collective
security, as well as measures of safety to their visitors' wile hotels, is able to contribute during

Impact that Airbnb has had on the hotel sector in other parts of the world 5
their business activities (Aznar et al., 2017, p. 147). The reduction in charges of rooms for
booking that Airbnb offer had made it possible for various hotels to reduce the charges per room
as a way of dealing with the competition that Airbnb offer to them in booking services. Hotels
had also resulted in lowering the costs of their rooms to allow their operations to maintain and
attract more clients that can help to provide more profit as a way of supporting their wellbeing in
the marketplaces. It is clear that in present business operations, Airbnb has succeeded in
attracting customers, but most organizations are not yet concentrating on taking much revenue
from hoteliers in markets (Gunter and Onder 2017, p. 287). Therefore, lower charges for booking
rooms by Airbnb had resulted to adverse effects on business activities of hotels as they remain
incapable of finding the correct middle foundation of improving their advantage of competing in
the competitive markets for rooms offered by different hotels.
Recommendations to reduce impact of operations of Airbnb on hotel sector
Invest in data
Airbnb understands the incredible amount concerning its users and targeted markets. The
corporation maps the complete journey of its clients from browsing listings, booking, and
completing their stay, as well as leaving the review of their host once they have signed out from
rooms or online portals. Being that this is all finished through the channel of Airbnb, it is able to
utilize the data of its users to improve the experiences of different guests, tweak their products,
along with finding opportunities for development. Therefore, CEO and management of different
hotel sectors can concentrate on doing well by adopting the similar data minded technique.
Management can then form a piecemeal approach to the usage of technology by utilizing several
technologies together with platforms for various purposes (Phua 2018, p. 3). The idea will make

Impact that Airbnb has had on the hotel sector in other parts of the world 6
it easy for different guest to know different services and vacant rooms that a given hotel offers at
a specified moment. Hotel managers need to adopt single platforms to provide the operations of
hotel the complete view of interactions of different guests with the hotel from booking to
checkout. Besides, with the appropriate implementation of technology by management and CEO
of hotels in place, hotels could utilize different data to make better decisions in business.
Comprehensive data can be useful in reducing impact of Airbnb as it helps management of hotels
to identify the new target marketplaces, present the problematic marketing angle, or open
avenues for tailoring offerings for targeted clients in hospitality sector (Sklar and Edwards 2017,
p. 17). Therefore, every decision has to be driven by data rather than instincts of CEOs or
managers.
Strengthening the feedback loop
Approximately seventy to seventy-five percent of hosts and guests of Airbnb review one
another within two weeks. In contrast to such ideas, only approximate of two to ten percent of
hotel guests always leave behind their feedback on the services offered at any moment. Such
processes remain to be the tremendous missed opportunity for hotels to better understand the
needs as well as wants of their target and esteemed guests (Garikapati et al., 2016, p. 578).
Therefore, for hotel staff how their work impacts different guests, the management and CEOs
need to strengthen feedback loop. No feedback loop exists between guest along with team that
makes it tough to create useful trust and delivers services that are personalized the way Airbnb
always does in their operations. Besides, managers and CEOs of hotel sectors need to consider
how they can effectively strengthen the feedback loop so as they can be capable of getting
necessary input from their guests (Lalicic and Weismayer 2018, p. 87). The approach can help

Impact that Airbnb has had on the hotel sector in other parts of the world 7
hotel managers and supervisors to understand how their workers do communicate back to their
guests.
Highlighting traditional hospitality strengths
The strength of hotel sectors comes from the conventional items of hospitality as well as
service that Airbnb cannot offer. Hotel managers must focus on improving their forces to allow
the operations hotels to remain competitive in markets. For instance, hotels are always reliable
and flexible with arrival times, and different guest is still probable to be distrusted by different
neighbors that are rowdy. Several guests enjoy going to hotels for the entire experience hotel,
with amenities such as spas, concierge and room service. The management needs to improve
such features that are currently unavailable through Airbnb (Helm and Guzzetta 2014, p. 76).
Managers need to concentrate on the collection of appropriate data along with strengthening the
feedback loop can assist to identify what their guests’ value more during their visits. The
management needs to develop strategies for having the flexible arrival time that will appeal to
most guests or having hotel staffs the phone call away, twenty-four hours daily. The best way
that management and CEOs can concentrate on to understand their operations is by improving
the techniques of collecting data as well as asking different guests to know quality of services
that they need to be developed to meet their needs. Besides, management and CEOs need to
concentrate on ideas of investing in more customer surveys as well as enhanced communication
strategies as these processes will help hotel sectors to find their selective advantage and leverage
them in competitive markets (Zale 2016, p.954). With all these recommended strategies, Airbnb
will be capable of continuing with its legal, regulatory, together with public view battles while

Impact that Airbnb has had on the hotel sector in other parts of the world 8
smart hoteliers will not wait for the results to make different changes that set the operations of
their hotels apart.

Impact that Airbnb has had on the hotel sector in other parts of the world 9
List of References
Aznar, J., Sayeras, J., Rocafort, A., & Galiana, J. 2017. The irruption of AirBNB and its effects
on hotels' profitability: An analysis of Barcelona's hotel sector. Intangible Capital, 13(1), 147.
Dusheiko, M., & Gravelle, H. 2017. Choosing and booking-and attending? Impact of an
electronic booking system on outpatient referrals and non-attendances. Health Economics, 27(2),
357-371.
Garikapati, V. M., Pendyala, R. M., Morris, E. A., Mokhtarian, P. L., & McDonald, N. 2016.
Activity patterns, time use, and travel of millennials: a generation in transition?. Transport
Reviews, 36(5), 558-584.
Gunter, U., & Önder, I. 2017. Determinants of Airbnb demand in Vienna and their implications
for the traditional accommodation industry. Tourism Economics, 24(3), 270-293.
Gyódi, K. 2017. Airbnb and the Hotel Industry in Warsaw: An Example of the Sharing
Economy?. Central European Economic Journal, 2(49), 123-873
HELM, B, & Guzzetta, M 2014, 'AIRBNB COMPANY OF THE YEAR. (Cover story)', Inc, vol.
36, no. 10, pp. 64-130.
Jaremen, D., & Nawrocka, E. 2017. Airbnb Competitiveness On The Hospitality Market Sector.
Prace Naukowe Uniwersytetu Ekonomicznego We Wrocławiu, (473), 286-296.
Lalicic, L., & Weismayer, C. 2018. A model of tourists’ loyalty: the case of Airbnb. Journal Of
Hospitality And Tourism Technology, 9(1), 80-93.

Impact that Airbnb has had on the hotel sector in other parts of the world 10
McGowan, R., & Mahon, J. (2018). David versus Goliath: Airbnb and the New York Hotel
Industry. Archives Of Business Research, 6(4), 12-76
Monet, M. 2016.'Airbnb urges hosts not to discriminate against guests', New York Amsterdam
News, vol. 107, no. 49, pp. 3-38.
Phua, V. 2018. Perceiving Airbnb as sharing economy: the issue of trust in using Airbnb.
Current Issues In Tourism, 1-5.
Schwartz, Z. 2012. “Probability Blindness” and Last-minute Booking of Hotel Rooms: The Case
of Bayesian Updating. International Journal Of Tourism Sciences, 12(2), 63-77.
Sklar, WP, & Edwards, JC. 2017. 'Florida Community Associations Versus Airbnb and VRBO
in Florida', Florida Bar Journal, vol. 91, no. 2, pp. 16-20.
Zale, K. 2016. When Everything is Small: The Regulatory Challenge of Scale in the Sharing
Economy. Gender Issues, 53(4), 949-1016.