Sharing Economy and Network Economy: A Study on Airbnb and its Impact on Hotel Industry

This study discusses the network economy and sharing economy, with a focus on Airbnb. It compares sharing economy and network economy, and analyzes Airbnb's impact on the hotel industry. The study concludes that both Airbnb and hotels have advantages and disadvantages.

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Accommodation
Name of the Student:
Name of the University:
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Introduction:
This study is consisting the discussion regarding the network economy and sharing
economy. Sharing economy is an extensive term for a developing set of commercial models,
podiums and connections. Under sharing economy there is a wide range while in this study
the discussion will be held on Airbnb (Mahadevan 2018). Next is the Network economy
which is the developing economic command in the info civilization. Here in this study, the
discussion will be held on the various features of both sharing economy and networking
economy
Sharing economy and Network Economy:
Sharing economy, is comprised of many names such as, commons-built peer
invention, collaborative production, peer-topper, access economy, collaborative consumption,
and mesh. An encircling description of these frugalities is possible to stay indefinable. The
sharing economy specifies, distributing the knowledge of products and facilities to improve
and exchange them. The scenery of sharing economy is divided into six characters –Zopa,
Airtasker, Open Shed, Airbnb, Kickstarter and Uber.
Network Economy originates from the chief characteristic of the services of the
products which is constructed by the help of social networks which is effective on
international scales. The network economy is defined after a sum of viewpoints those are,
value networks, modification of the industrial budget, academic property rights, global scale,
and information and digital organization (McCulloch and McGarry 2017). Network economy
is the worth which is shaped and collective by all the individuals residing in a network
moderately than by discrete companies.

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Sharing economy vs Network economy:
Uber and Airbnb are considered as Sharing Economy which explains idea and business
between specific customers thus, castoff as a wordy perception. To save possessions
customers surrendering each other momentary entree which is known as sharing
economy thus is different from network economy.
Sharing Economy supports dealing among customers not specifies about leasing or
renting products from a company. In the sharing economy customer provides each other a
momentary admittance to a product but the ownership is not transferred but in network
economy the product is sold, and the ownership too is sold as happens in quikr, or ebay the
networking sites of product exchange. Sharing is the resourceful usage of physical
possessions and not considers isolated entities transporting a service to each other.
Despite everything, people cannot go unemployed but physical products go
unemployed. Internet stages which carry clients composed to deliver services with each
other to epitomize the required economy (McCulloch and McGarry, 2017). For example,
Task Rabbit is a platform, through which individuals are hired to bring out labour
everywhere round the house.
Airbnb a part of sharing economy or of network economy:
Airbnb is a part of sharing economy as well as the network economy. Two parties to
an Airbnb conversation are the travellers and the hosts are required to get registered on the
website that is maintained by the Airbnb. Hosts lean their requirements may be anigloo, an
entire apartment, a castle, a chamber in a house (Katsumura et al. 2018). Travellers are then
required to browse and make bookings on these schedules. Airbnb revenues a guest facility
payment of about 6-12% each time of booking a reservation. The wish for social interface
is frequently perceived as the key chauffeur overdue the expansion of the wonder. The

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success of Airbnb as a component of Network economy is foremost. Airbnb’s business
model motivates on a market stage where guests and hosts in exchange of money they rent
their houses (Ert et al. 2016). With the help of networking system, guests and hosts can
discover comments and reviews along with social media networks to shape faith midst users.
However, this tactic is not exclusive to Airbnb. By the help of digital expertise, users can
command their knowledge’s and touch future customers ‘selections by numerous online
platforms.
Airbnb not hurting hotel business a disruptor or neither:
Business travellers silently favour hotels; further Airbnb’s business depends more
than 90% in private tourism. Travellers can be grieved through a dreadful crush in hotel areas
if Airbnb were not in operation (Kotsugai et al. 2014). Airbnb extended the accessibility of
beds for guests,to stay similarly as a local has countless demand for the individuals observing
for the complete experience,it also offers young travellers a more reliable perception of the
built-up terminus and reserved prices reasonable for all tourists. Airbnb not reason for
adequate centre housing as the chief chauffeur of upcoming charges in chief metro areas. The
elementary finances are moderately forthright. Airbnb is not only differentiating with the
hotels for tourists it repeatedly differentiates between locals for places. Company has
loosened the problem of increasing charges in packed inner city areas from tourists to
resident thus, strident down values for the rooms of the hotel, while risingcharges for city
inhabitants. The Disrupt Story of the Airbnb on this consequence, neither has dropped prices
for travellers, accompanied the revenue of renters thus, making travel more fun in the major
cities (Biswas et al. 2016).
Airbnb a competitor to hotels:

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Airbnb claims that its commercial model simply links hosts who lease out their
private possessions. However, foremost hotel chains claim the main passion of their hotel
customers fluctuate massively from the Airbnb's guests thus; their revenues are not getting
overstated. Hotels rooms raise a quality price on holidays, weekends and every time guests
surpass the amount of beds. Hotel rooms and Airbnb gets costlier in posh locations for
example, chief cities or tourist places whereas, Airbnb hosts possessed the right to rent what
they suitably want (Guttentag 2015). In most cases, potential customers discover that Airbnb
proposes an inexpensive alternative than many hotels. During vacations, for the groups and
families’ hotels can be restraining whereas, an apartment can be more cooperative. Airbnb
has not arrived the expensive hotel market still now (Ganesh et al. 2016). Whereas, travellers
accusing expenditures to their firms are launching to pursue increased rates of business
spaces from Airbnb. Coincide, by tracking a rising amount of Airbnb bookings within
corporate customers a commercial travel and expense supervision platform, has make sure to
this trend.
A principal comparison within the Airbnb and hotel industry is the existence of levies
and guidelines in dumpy rentals. From the major view of argument, Airbnb is not added as a
matter to the occupancy tax laws which is to be unavoidable disbursing to the sales tax of the
native government. Similarly as of a hotel though, Airbnb includes a value-added levy amidst
its service charge. Because of the various tax laws, hotels and the Airbnb never charge every
guest for a VAT to pay. Hotel activists and national governments endure to attempt and levy
taxes and guidelines because of the fast expansion of the Airbnb (Finck, M. and Ranchordás
2016).
The difference between the hotels and the Airbnb is harder because of the tax charges.
The value for hotels differs, similarly varies the price for an Airbnb. Because of the different
types of services provided and the treatments which are served by the hotels the hotels incline

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to stand more expensive. If these factors never matters consumer, then an Airbnb charge
leaves a customer added room in the budget of the customer for more sightseeing. Naturally,
Airbnb have a habit of to cheaper by 50% than a hotel, additionally an amount is saved by not
having food outside as like hotels. Rather in some cases it is observed that sometimes Airbnb
rentals appears higher than compared to a hotel rent for one night (Lee et al. 2016).
In the sense of safety, it is observed that both the Airbnb accommodations and the
hotels are counted as in both unsafe and safe areas. Hotels in all-purpose, though, offer more
safety and a healthier logic of safety than that of an Airbnb. Hanging around within an
Airbnb, it is noted effectually remaining in the house of an outsider (Zervas et al. 2017).
Similarly follows in the matter of a hotel that it is not trusted all the time.
Airbnb vs Hotels:
Airbnb offers an excellent occasion to lease a complete apartment or a shared room
area and recompense by the night which works out much cheaper for large assemblies.
Consuming own area whether a full-stocked kitchen, living room etc. which offers a more
liberty for relaxation and relish company of families or loved ones and cooked food at own
style.
With Airbnb the expectations of any facilities and with a payment extra at the
completion of each booking is not desired thus, a turn down facility is never accepted which
lower the prices of the Airbnb (Moodie 2015). All the facilities are available in hotel and if
not, people are always available at a phone call. Hotels are perfectly located in the locations
that are suitable for business meetings, sightseeing, and bars along with restaurants. Hotels
are better options rather than an Airbnb when travel with children. Hotels always ensure the
comfort zone along with the entertainment. All is failsafe in hotels; it is recognized accurately

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about the facilities when walked in. It’s the accustomed sensation we would love to have
whenever we go somewhere.
Conclusion:
Thus, it can be concluded that travel lovers can go for a option for an Airbnb if wishes
for a new experience with an exactly home away from home. Though there are some risks but
still be enjoyed. But obviously hotel is safer rather than the Airbnb. But none is failing in the
businesses for the other. Both are comprised of some advantages as well as the disadvantages.

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