Impact of Peer-to-Peer Accommodation (P2PA) on Australian Market

This report provides an in-depth analysis of the peer-to-peer accommodation (P2PA) market in Australia, with a specific focus on the influence of companies like Airbnb. The report begins with an executive summary and table of contents, followed by an introduction that highlights the growth of the shared economy and its impact on the tourism sector. The industry overview examines the accommodation sector's growth, the increasing consumer participation in the shared economy, and the role of P2PA platforms in addressing accommodation issues. The report also includes data visualizations, such as pie charts, to illustrate the usage of P2PA by international users and age groups. It then delves into the current challenges faced by the accommodation services, such as the impact of Airbnb on rental availability and the need for urban planning adjustments. The report concludes with a summary of the significant growth and impact of P2PA companies in Australia, their competition with traditional hospitality sectors, and recommendations for policy measures. The report references various sources to support its findings.

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Hotel and Accommodation Management

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Executive Summary
The report outlines the market for peer-to-peer accommodation or P2PA in the Australian region.
It outlines the tourist trend regarding availing of facilities in the P2PA facilities rendered by
companies like Airbnb compared to other hospitality firms operating in the region. Further, the
report also reflects on the potential challenges in terms of increased competition rendered by the
P2PA sector on the existing hospitality market and the counter measures that are focused on
being undertaken by the government and urban planning bodies in such regions to counter the
impact of the competitive pressures.

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Table of Contents
Introduction......................................................................................................................................4
Industry Overview of the Accommodation Sector in Australia......................................................4
Current issues faced by Accommodation Services..........................................................................7
Conclusions......................................................................................................................................9
References......................................................................................................................................11

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Introduction
The emergence of the concept of shared economy amongst different sectors has led to the growth
of peer-to-peer accommodation (P2PA) market to effectively flourish along the tourism regions
on an international basis (OECD, 2017, p.86). Companies like Airbnb tend to potentially
challenge the operations of the current hospitality sector along different Australian regions
thereby requiring the state tourism and urban planning bodies to focus on undertaking new
policies (Murphy, 2017). The report focuses on providing an effective overview of the P2PA
sector in Australia along with the challenges rendered by it.
Industry Overview of the Accommodation Sector in Australia
The peer-to-peer or P2P based accommodation (P2PA) industry gains due significance in
Australia owing to the fact that the sector potentially contributes for the growth of Australian
tourism. During 2017, the accommodation sector of Australia recorded a growth of around 7
percent in terms of reaching a value of AUD7 billion. The growing importance of the shared
economy in the Australian context can be figured out based on large scale participation of the
Australian consumers in that during 2015 (World Bank Group , 2018). The management of
Airbnb, acting as one of the potential platforms fuelling the growth of P2PA industry in Australia
notes that on a per capita basis larger numbers of Australians are observed to be using the
company’s services. In that, the Australian cities like Sydney and Melbourne ranked 5th and 6th
respectively in Airbnb’s list of regions encompassing significant numbers of users. However,
another independent research firm reflected that the existence of the P2PA platforms do not
impose a threat on the traditional hospitality industry in the region (Dolnicar, 2018). Other

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bodies like the forum for Tourism and Transport based in Australia reflected that the tourism
market of Australia suffered owing to lack of supply of accommodation properties for absorbing
the huge flow of tourists in the region. In that, the emergence of the P2PA sector thus acts as an
effective solution to the accommodation based issue faced by the Australian tourism sector
(Dolnicar, 2018). A pie-chart illustration given below highlights the use of the P2PA in terms of
percentage of international users hailing from different nations visiting Australia.
(Mahadevan, 2017)
Another pie-chart reflects the age wise customers that tended to use the P2PA facilities generated
by Airbnb in the New South Wales region.

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(Deloitte, 2015)
It is further observed that tourists, both domestic and as well as international that focus on
visiting or touring Australia for a longer duration tend to opt for the P2PA facilities than that of
visiting hotels (Pham et al., 2017). Airbnb’s management reflects that visitors to Victoria and
Melbourne are those that favour in getting accommodation facilities near the beaches or
somewhat inside the cities. Further, the tourists tend to be either foodies or are sports fanatics
that require them to be either at the beaches or inside the cities (Razli et al., 2017). Reflecting on
the above need had made Airbnb focus on the development of P2PA facilities and networks
around the beaches and inside the urban quarters. Again, international tourists focus on availing
P2PA facilities in that the same helps them in enjoying exquisite food and wine products and
also in living a contemporary lifestyle. For the domestic travellers, P2PA facilities are favoured
in cases of holiday tours. The international tourists mainly hail from United States, United
Kingdom, Singapore, China and also New Zealand (Mahadevan, 2017).

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Current issues faced by Accommodation Services
The emergence and the growing presence of P2PA companies like Airbnb in Australia is
observed to significantly affect the supply or the availability of rental accommodations in
Sydney which were rented on a permanent basis (Yaraghi & Ravi, 2017). The Airbnb rentals
focus on attracting considerable number of tourists in terms of rendering lucrative residential
properties that in turn surpass the level of income associated to permanent rentals along Sydney
by around AUD600 on a monthly basis. The Airbnb rentals thus tend to create an upward
pressure on the home rental market based in Sydney. The residential properties made available
by Airbnb mostly concentrate along the regions like Waverly and Sydney (Guttentag, 2015). In
Waverly, the amount of residential properties made available by Airbnb is observed to be thrice
than the rate of total amount of residential vacancies available in the region. The same reflects
the pressure imposed by Airbnb on the housing rental market along the Waverly region. In
Sydney, it is estimated that around 144 percent of the home rental facilities are made available to
Airbnb for carrying out its P2PA business. The urban planners are thereby required in revising
the housing regulations in terms of generating effective policies for countering the impact of the
online market for residential sharing in Australia (NSW Business Chamber, 2015). The spread of
Airbnb in Australia along the ‘whole houses’ and ‘shared rooms and beds’ during 2016 are
reflected in the following illustrations.

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(Gurran & Phibbs, 2017)

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(Gurran & Phibbs, 2017)
Conclusions
The report reflects on the considerable growth and impact of P2PA companies like Airbnb in the
Australian market. It reflects on the competition imposed by Airbnb in attracting both
international and domestic tourists based on the availability of effective food and wine products
and other contemporary tourism and luxury facilities. The large scale availability of P2PA

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accommodations has in turn squeezed the market for hotels along different Australian regions
like Sydney, Victoria, New South Wales amongst others. The urban planners are thereby
required to focus on the generation of effective policy measures for countering the impacts of the
growing competition between traditional hospitality sector and the shared accommodation space.

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References
Deloitte, 2015. Review of the collaborative economy in NSW. New South Wales : Deloitte.
Dolnicar, S., 2018. PEER-TO-PEER ACCOMMODATION NETWORKS. Oxford : Goodfellow
Publishers Limited.
Gurran, N. & Phibbs, P., 2017. When Tourists Move In: How Should Urban Planners Respond to
Airbnb? Journal of the American Planning Association, 83(1), pp.80-92.
Guttentag, D., 2015. Airbnb: disruptive innovation and the rise of an informal tourism
accommodation sector. Current Issues in Tourism, 18(12), pp.1192-217.
Mahadevan, R., 2017. Strangers in Spare Beds: Case Study of the International and Domestic
Demand in Australia’s Peer-To-Peer Accommodation Sector. Journal of Tourism & Hospitality,
6(4), pp.1-4.
Murphy, P., 2017. Auto-Industrialism: DIY Capitalism and the Rise of the Auto-Industrial
Society. United Kingdom : SAGE.
NSW Business Chamber, 2015. THE SHARING ECONOMY. NSW: NSW Business Chamber.
OECD, 2017. OECD Economic Surveys: Australia 2017. United States : OECD Publishing.
Pham, T.D., Nghiem, S. & Dwyer, L., 2017. The determinants of Chinese visitors to Australia: A
dynamic demand analysis. Tourism Management, 63, pp.268-76.
Razli, I.A., Jamal, S.A. & Zahari, M.S.M., 2017. Perceived value in peer-topeer (P2P)
accommodation: A case of Airbnb. Journal of Tourism, Hospitality & Culinarry Arts , 9(2),
pp.213-24.

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World Bank Group , 2018. Tourism and the Sharing Economy. Jamaica : World Bank Group.
Yaraghi, N. & Ravi, S., 2017. The Current and Future State of the Sharing Economy. New
Delhi: Brookings Institution India Center.