The And Its Effect On The Hotel Market

2327 Words May 4th, 2016 10 Pages
According to Investopedia, “A sharing economy is an economic model in which individuals are able to borrow or rent assets owned by someone else” (“Sharing Economy”). This kind of model is becoming more and more popular today as people are finding ways to connect and fully utilize their assets. Hotels are being rivaled by Airbnb, a website that connects individuals looking to rent out a space in their homes or apartment with individuals or groups who would like to stay there. Airbnb, as well as other similar websites and programs, have been creating a disturbance in the hotel market. The main group that has been affected by the introduction of Airbnb is lower-end hotels and hotels that do not cater to business travelers. Since Airbnb is not a threat to higher end hotel chains at the moment, many of them do not see the need to change the way they are doing business; however, as Airbnb and other similar services are growing in size and numbers, these hotel chains need to be prepared to take on a new type of competition. High and low end hotel chains, such as the Ritz Carlton and the Residence Inn, which are both owned by Marriott, need to prepare for and fight against the disturbance in the market by creating new marketing plans and meeting new customer demands.
Over the past few years, the sharing economy has risen to a remarkable $26 billion industry. Also called “peer to peer” or “collaborative consumption”, this economy has been largely facilitated by the advancement of…
Open Document