Airbnb: Disruptive or Challenger in the Accommodation Industry?

This report examines Airbnb's position within the accommodation and sharing economy sectors. It delves into the concept of the sharing economy and analyzes Airbnb's business model, evaluating whether the company acts as a disruptive force or a challenger to established accommodation providers. The report assesses the impact of Airbnb on the industry, considering factors such as market share, customer preferences, and competitive strategies. It also explores the challenges and opportunities that Airbnb faces, including trust issues, service offerings, and competition from both traditional hotels and other sharing economy platforms. Through a detailed analysis, the report concludes whether Airbnb is a disrupter or a challenger in the accommodation sector.

The changing face of
the accommodation and
the sharing economy

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
MIAN BODY..................................................................................................................................1
Examination and analysis of the aspect of sharing economy and evaluating that Airbnb is a
disrupter or a challenger in the sector of accommodation...........................................................1
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
Accommodation sector is one of the most important as well as crucial aspect since it is an
industry that generates a lot of revenue for the firms that are operational in the market as well as
for the nation since it helps in contributing to the economy of that country (Avdiu and Nayyar,
2020). Airbnb is a firm that is started in the year of 2008 by two university graduate students
when they decided to offer strangers a place to stay at extra cost and thus the name itself is
compromises of air, bed, and breakfast. The report includes a detailed analysis and evaluation of
all the aspects that are related with the company that is Airbnb so that an elaborated examination
can be down which can prove beneficial for it in the long term scenario. Apart from that the
report includes detailed discussion of the factor that the above mentioned company is a disrupter
or not so that appropriate changes can be made in it which can improve its overall performance
and working in the market in which it is operational. Further the report also includes discussion
of the company that is mentioned above on the basis that the firm is a disruptive one or a
challenger to other companies so that appropriate analysis and evaluation can be done including
various changes which can prove beneficial for it in the long term context.
MIAN BODY
Examination and analysis of the aspect of sharing economy and evaluating that Airbnb is a
disrupter or a challenger in the sector of accommodation
Sharing economy is a much used concept in the current scenario as it is related with
lending personal belongingness at a certain price that is much cheaper that what it is asked for
the same in the market. This factor is very common as individuals lend their personal things so
that they can get a price for it as they are not currently using it and also it can prove beneficial
for the other personnel and he doesn’t have to pay extra bucks so as to avail similar kind of
services (Balasubramanian and Ragavan, 2019). The company that is Airbnb which was started
by two youngsters faced many problems since the concept of shared economy was not that
popular among the individuals and thus the major issue among all of them was the trust among
them since it is risky for the host as the persons are not known and are not verifiable too and on
the other hand for the guest too since it is dangerous to be at other’s place and that too if one
doesn’t know that host. Thus the company that is Airbnb started their website so that they can
build a trust among society and the persons that are living in it and secondly it started a system of

review and rating of both host and guest so that others can see it and before using the products
and services of the host.
The business that was started by the company that is Airbnb was one of its kind and thus
gained a lot of popularity among most of the individuals and thus increased its sales and
subsequently profitability in the industry in which it is working and thus it can be said that the
firm is a disrupter as it pose a threat to accommodation sector companies since a lot of persons
prefer to go and use the aspects of shared economy rather than going to hotels for
accommodation that are considered to be very costly indeed. Since the company was operating in
profitability so it started to offer various kinds of exotic location and destinations to the guests so
that they can use their services with minimum rates (Campbell and Thornton, 2016). The shared
economy concept of Airbnb was initially very good but there are many loop holes in its working
that is exposed as the time passed and the major constraint was that the firm was not giving any
kind of additional services that other companies provide which operate in the sector of
accommodation. The disruption of the company that is Airbnb can be analysed by this aspect that
the company provides its services at a much cheaper rate as compared to other hotels and thus
the customers of different organisations are parted ways from the higher value hotels. Also the
revenue part of the companies are also affected by the strategy that is used by Airbnb since the
customers are not using the services of hotels and thus the volume of sales decreased with a wide
margin and thus affected profitability of that enterprises as well (Li, Bonn and Ye, 2019).
Also it can be seen that the reach of internet is pretty wide and thus it helps in attracting a
lot of customers and thus subsequently sales and profitability of the company that is Airbnb
increases with a great margin that substantially resulted in the decrease in the level of sales of
other firms that are operating in the sector of accommodation. Also it can be seen that disruptive
companies have a set pattern of growth and it is also followed by Airbnb as it constantly made
changes in its working s that it can carter the needs, requirements, and demands of the customer
and that too within a limited time period with full accuracy, preciseness, effectiveness, and
efficiency (Raguseo, Neirotti and Paolucci, 2017).
The challenger is a one that uses competitive strategies in the market so as to operate in the
market and competitive with its rivals by using appropriate tools and techniques that are
available in the market. Airbnb is not regarded as a challenger generally but still it can act like
one in case of small and medium natured firm and hotels since it is also operating at that level

whereas big companies are working with a much larger capital and also they operates on a much
wider scale as compared to Airbnb so it can be said that it is not a challenger to big firms but
small organisations can face stiff competition with it in the long term market (Rahimi, 2017).
The hotels that are rated higher in terms of rating that is one to five and the one which is rated
four or five are the one that provides optimum experience to its customers starting from
exclusive services and ambience to providing adequate worth of money that they spend for the
usage of their services. Thus it can be said that they are not the ones that thinks Airbnb as a
challengers since the company lacks in providing optimum quality experience to its guests as it
mainly focuses on giving cheap accommodation facility and thus lacks in the factor of providing
quality services (Tremblay-Huet, 2018).
CONCLUSION
It can be concluded from the above that the firm which is mentioned above Airbnb is
operating on a wider scale and is placed at a very good position in the market as compared to
other firms that are also working in the similar kind of structure. The firm is one of the first to
start the concept of shared economy that proves useful for both the two persons that is the host as
well as the guest, though there are many changes that are made by the company in order to gain
trust of other parties so that it can sustain and survive in the market for a much longer time
period as compared to the one that is already settled in the industry. Apart from that it can be
concluded that the organisation is a disrupter since it is the one that attracts the attention of the
prospective customers of hotels and accommodation sector firms since they provide similar
natured services and that too at a much cheaper rate which attracts attention of a lot of
individuals that are able and willing to use such services in the near future. Thus it can be
concluded that Airbnb is a disrupter rather than a challenger since it is not operating on such a
larger scale but still it can pose a lot of threats to the companies that are small and medium in
nature and thus there is a need for a detailed analysis and evaluation of the current market
conditions so that necessary adjustments can be made in the business firm that can add value to it
on the long term basis.

REFERENCES
Books and journals
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Balasubramanian, K. and Ragavan, N.A., 2019. What are the key challenges faced by the
Malaysian hospitality and tourism industry in the context of industrial revolution 4.0?.
Worldwide Hospitality and Tourism Themes.
Campbell, A. and Thornton, H., 2016. Phoenix rising: A study of the challenges sharing
economy companies face when internationalizing.
Li, J.J., Bonn, M.A. and Ye, B.H., 2019. Hotel employee's artificial intelligence and robotics
awareness and its impact on turnover intention: The moderating roles of perceived
organizational support and competitive psychological climate. Tourism Management,
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Raguseo, E., Neirotti, P. and Paolucci, E., 2017. How small hotels can drive value their way in
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Management, 54(6), pp.745-756.
Rahimi, R., 2017. Customer relationship management (people, process and technology) and
organisational culture in hotels. International Journal of Contemporary Hospitality
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Tremblay-Huet, S., 2018. Making Sense of the Public Discourse on Airbnb and Labour: What
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