Analysis of Sharing Economy Impact on Hospitality Revenue Management

This report provides an analysis of the sharing economy's impact on the hospitality industry, focusing on the challenges and opportunities presented by platforms like Airbnb. The report begins with an executive summary highlighting the need for hotels to adopt sharing economy principles. It then discusses the relationship between the hotel industry and the sharing economy, emphasizing the potential for increased revenue and the need for hotels to adapt to changing market dynamics. The analysis includes the financial effects of Airbnb on hotel room rates and the importance of understanding supply and demand. The report concludes that hotels need to embrace the sharing economy to remain competitive, suggesting the use of revenue management professionals and rate-shopping tools. References from Hotelnewsnow.com, The Balance Small Business, and Todayshotelier.com are provided to support the analysis.

Running head: HOSPITALITY REVENUE MANAGEMENT
HOSPITALITY REVENUE MANAGEMENT
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1Hospitality Revenue Management
Executive Summary
Sharing economy should be adopted by each and every hotels worldwide and this report provides
a full analysis of how to apply and why to apply this concept.

2Hospitality Revenue Management
Table of Contents
1.1 Introduction................................................................................................................................3
1.2 Discussion..................................................................................................................................3
1.3 Conclusion.................................................................................................................................4

3Hospitality Revenue Management
1.1 Introduction
The hotels are facing loss since past decades and Airbnb is currently preferred by
customers but it is not beneficial for the hotels and so a thorough analysis is done over sharing
economy and recommendations are provided.
1.2 Discussion
In simple words sharing economy can be considered as a technology to help exchanged
access of services and goods between two or more parties. The relationship between hotel
industry and sharing economy can be defined as positive relation because the revenue structure
for the hotel industry is considered to be stiff since past decade but there are chances of getting a
good result. Due to low income, the hotels are employing less labor force. In San Francisco the
hotels are losing their segments and a slumping can be seen in the upscale segments. The hotel
industry is showing a lot of negative growth since decades (Hotelnewsnow.com., 2020). If the
hotels start adopting the measures of sharing economy then they can earn profit like before.
The financial effect on the hotel rooms can be defined as having a negative impact
because the people are becoming more rate oriented and they are preferring to pay less. Hence,
Airbnb offers their customers who rents their products over Airbnb can have lower rates because
they generally have 0 cost (The Balance Small Business., 2020).
According to the data and information, sharing economy can be more beneficial for the
hotels because it does not completely remove the traditional hotels. Some restrictions are needed
while allowing customers to stay for safety purpose which Airbnb is not providing and that can
be too risky.

4Hospitality Revenue Management
The most important thing to compete with the new trend in market for lending hotels for
accreditation is to understand the supply and demand of the market and hire revenue
management professionals for the development. The hoteliers and accommodation owners can
also use the rate-shopping tool for getting a broader view of the occupancy, pricing and demand
forecasting purpose. Airbnb is flourishing in the market but it is not profitable for the hotels and
hence it is important to understand the sharing economy better and improve the competitiveness
of the hotels using some of the traditional methods for the business (Todayshotelier.com., 2020).
1.3 Conclusion
After the analysis of Airbnb and sharing economy, it can be clearly concluded that the
hotels are facing too much competition and loss due to Airbnb concept. Hence, they need to
apply the sharing economy concept at the earliest to earn profit. Sharing economy also reduces
competition in market and helps the economy to grow faster.

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References:
Todayshotelier.com. (2020). Rising competition: The sharing economy’s effect on pricing
strategies. Retrieved 31 March 2020, from
https://www.todayshotelier.com/2017/03/01/rising-competition-the-sharing-economys-
effect-on-pricing-strategies/
The Balance Small Business. (2020). The Sharing Economy and How it Is Changing Industries.
Retrieved 31 March 2020, from https://www.thebalancesmb.com/the-sharing-economy-
and-how-it-changes-industries-4172234
Hotelnewsnow.com. (2020). Retrieved 31 March 2020, from
http://www.hotelnewsnow.com/media/File/PDFs/Reports/HNN_SharingEconomy_compr
essed(1).pdf

6Hospitality Revenue Management
Question 1) how can sharing economy help the hotel industry to grow?
Question 2) why Airbnb is not beneficial for hotels?