Success of Airbnb and Strategies for Hotels to Minimize its Impact

AirBNB success
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Table of Contents
Introduction.................................................................................................................. 2
First: The success in Airbnb accommodation business...........................................................2
Second: Hotel industry strategies to minimize the actual or potential impact of Airbnb................5
Conclusions................................................................................................................... 8
References.................................................................................................................... 9
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Introduction
The tourism accommodation sector of today provides a very good example of the concept of
sharing economy. Airbnb is among the leading companies that help the property owners to rent
their second homes or rooms to tourists that do not have an alternative productive purpose
(Moreno-Izquierdo et al., 2019).
The accommodation platforms of Airbnb represents an opportunity to enhance the
competitiveness of regions that attract tourism. It represents a new type of entrepreneurship and
employment. Also, it increases the profitability of and sustainability of the tourism industry due
to the emergence of Airbnb (Moreno-Izquierdo et al., 2019). The following section discusses
the success in Airbnb and hotel industry strategies to minimize the actual or potential impact of
Airbnb.
First: The success in Airbnb accommodation business
1.1 Airbnb use of sharing economy
The highly emerging phenomenon of sharing economy affects the global economy to transform
from the traditional economy to the digital economy, which is capable of providing
accommodation services for all tourists’ destinations. The sharing economy helps in increasing
the number of tourists supplied with accommodation service due to mutual benefits for both the
owners and the rentals. Tourists prefer apartments or rooms to hotels for their competitive prices
(Chattopadhyay & Mitra, 2019).
Due to the high prices of hotel rooms in (Downtown) San Francisco that are considered the
highest price in the world, Airbnb decided to provide alternative competitive accommodation
service to the city visitors. Airbnb could expand its services across the globe by offering services
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to about 65 thousand cities in 191 countries with an accumulated number of 8.5 Mn users by
2013 (Gunter, 2018; Edelman & Luca, 2014).
Despite this, some researchers like Zervas Proserpio, & Byers (2017), as cited in Moreno-
Izquierdo et al. (2019), argue that there are differences between holiday tourists, who highly
benefit from Airbnb accommodation supply and business tourists who prefer hotels. The theory
of innovation can explain the growth of Airbnb; it filled the needs gap by fulfilling the demand
of tourists. Its collaborative website facilitated the supply of information to ensure that
confidence between the tourist and the owner. Airbnb acts as a medium between the tourist and
the owner, hence it does not guarantee the information provided by the owners. The theory of the
sharing economy argues that property, goods and services are shared over an online platform that
operates over the internet. This results in the competitiveness of accommodation supply (Yi et
al., 2019).
Bialski (2016), as cited in Roelofsen & Minca (2018), argues that the Airbnb platform interface
develops a regime of living that affects the people’s ways of response that at the same time
influence hospitality practices. People find that Airbnb service offers affective-based trust that
makes the user familiar with the emotional connections (Yang et al., 2019).
1.2 Disruptive innovation
Disruptive innovation refers to tolerating weaknesses to be able to get the benefits. It provides an
alternative package of benefits characterized by being cheaper, more convenient and simpler
compared to traditional techniques. Airbnb offers an innovative tool of distribution that is able to
diversify and personalize the tourism service and its digitalization. Some researchers argue that
Airbnb provides an inferior service compared to the hotel services, like cleanliness, lower quality
and poorer check-in/out process. Despite this, others argue that Airbnb provides not only a
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