Airbnb's Impact On The Hotel Industry

With recent economic crisis (2008), people globally tend to spend less of their money on travel. Regarding the hospitality industry, they would rather look for cheaper accommodation or room. With the crisis also affecting companies, business travelers are keener to find cheaper rooms or apartments to limit their changes.by offering cheap rents, AirBnB is offering an alternative solution to people and businesses, and is a good response to the crisis.

Tourism is one of the most international industries. Globalisation is the gradual forging of links between groups and societies until they finally reach around the globe in several directions (Smith, D,2006). Globalization is one of the serious challenges facing managers today. It is critical to develop services that are able to satisfy a highly diverse customer base (Ueltschy et al., 2007) Now to keep up with the rising levels of globalization in the hotel industry, there’s a need to understand not only the positive, but also the negative impacts of globalisation. I’ll also talk about the growth and rise of one of the most respected brands in the hospitality industry - the Hilton Hotels. Throughout the evolution of this famous organization, the Hilton has

The external environment of the hotel industry in is very competitive and already well established. Trends in the market include promotional campaigns to customers using the "more bang for your buck," method. There are several different segments of the hotel industry including: luxury, upscale, mid-market with food and beverage, mid-market without food and beverage, economy, and budget. Each different segment offers certain amenities to appeal to consumers depending on what they are looking for in an over night stay away from home. As McDonald 's looks at entering the hotel industry they have looked at several important

It is the largest peer-to-peer hospitality organization in the world and its net worth is over ten billion dollars. From 2012 to 2013 it has doubled its revenue from 250 million to 500 million and did it as well for the year 2014. It has listed over a million lodging opportunities in over 192 countries. Even though AirBnb is privately owned, it has exceeded the value of most global hotel-chains, Hyatt as an example. The biggest question at the moment is how would AirBnb influence the revenue and profitability of the Hotel

Brian Chesky and Joe Gebbia founded Airbnb in San Francisco, when they began renting out airbeds in their apartment to people attending a local conference to generate additional income in 2008. The early business model for Airbedandbreakfast.com, later renamed Airbnb, focused on large conferences such as the Democratic and Republican Conventions, which created

3. Make It Easier to Reject Renters: When a renter sends a request to a host to use their

Our team chose the hotel industry in the United States for our economic analysis. The hotel business has existed since the earliest times, and has influenced the development of the economy since the founding of this country.

Barriers to get into the hotel industry are huge, which make the hotel industry not look appealing to new entrants.

Hilton Hotels is one of the biggest players in the US lodging industry. It contributes to about 9% of the total rooms in US lodging market. It has presence in over 78 countries with more than 2500 hotels. Lodging industry is highly capital intensive industry, so to reduce capital expenditure Hilton Hotels opted for self-owned Hotels as well as franchising model with the real estate owners. One of the key features of lodging industry is low switching costs for customers. There is very little margin to differentiate from the major competitors in the industry which include Marriott international, IHG, Accor etc.

TripAdvisor is the world’s largest travel site, it enables potential customers to see other opinions before they part with their cash. TripAdvisor has over 60 million visitors per month looking through over 75 million reviews of hotels and restaurants. The site operates in 30 countries worldwide making it a powerful and unstoppable force. Tripadvisor.co.uk (2013) The next review site that even comes close to TripAdvisor is booking.com with a mere 14 million reviews per month compared to the review giant of TripAdvisor.

Economic Impact studies, conducted by Airbnb themselves, have attempted to show the public that Airbnb is a good thing for communities and the world. And it’s working. In a study conducted in 2012 by Airbnb, it was shown that Airbnb generated 56 million dollars in added local spending and creates approximately 430 jobs in San Francisco alone. It was also noted that nearly 56 percent of Airbnb hosts claimed that they used the added income from hosting toward their mortgage. All of this information paints a picture in people’s minds that Airbnb is helpful to local communities.

Physically we live on planet Earth, a constantly accelerating body in the solar system and the only body in this body system that contains complex living organisms. Whenever, I am asked what my world consists, two things come to mind. First is the denotation of the word world. The denotation of the word world is the place of the human civilization, specifically any place that pertains to the planet Earth. Second the connotation of the word world comes to mind. The connotation is anything that defines me, whether it be my family, my culture, my ideals, my home, my environment, and etc. Personally, I am a conglomerate of two different cultures, first being my parents’ Indian heritage and the fact that I was born into an American society. As of now, two different cultures are coursing through my blood, the culture of India and the United States of America. “I am the product and expression of this world, even if suddenly it vanished, I’d still represent it; I would articulate it.” This world is something that defines me and I do not want to ever lose it. I will be losing a part of me if that happens.

AirBnb was founded in 2008 in San Francisco. AirBnb is based on a trusted community marketplace for people to list, discover, and book unique accommodations around the world — online or from a mobile phone or tablet. So far, they have over 60 million guests, are in 34,000 cities all over the world; 190 countries. AirBnb wants to be known for its world-class customer service and a growing community of users, they wants to be known as the easiest way for people to monetize their extra space and showcase it to an audience of millions.

The majority of the five-star hotels are controlled by foreign hotel management group while the one, two, three, and four-star hotels are mostly controlled domestically without any strong chain brand. By August 2017, the profit of five-star hotels stands at 64.83 billion yuan, four-star hotels at 2.09 billion yuan, three-star hotels at 6.13 billion yuan, two-star hotels at 0.54 billion yuan, and one-star hotels are at 0.11 billion yuan. This shows that the majority of the profit share is earned by five-star hotels. Besides the starred hotel, there are 95000 individual hotels in China market, which occupies 27% of the market share; and economy hotel for around 7000, occupies 1.9% of the market share; social inn, hostel for about 234,000, which occupies 67% of the market share. In China, the main body market is filled with non-brand individual hotels, social inn, and hostels, but their competitive power and profitability indexes are relatively weak. Economy hotels, on the other hand, in terms of economic perspective, are lying in the ascendant mode with lots of domestic brands appearing having strong competitive power and profitability indexes.

Having just analyzed the general environment surrounding the upscale and luxury hotel industry, the next step in determining whether such an industry is attractive or not is to conduct an in depth external analysis of the threats and opportunities facing the industry. Thanks to the help of Michael Porter and his Five Forces Model, this analysis is not nearly as difficult or as time consuming as it may seem. According to Porter, there are five forces which determine the competitive intensity and therefore attractiveness of a market. These forces include the threat of entry, the threat of rivalry, the threat of substitutes, the threat of buyers,