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The Impact Of Airbnb On Hotel Industry

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The development of sharing economy in tourism and hospitality
The sharing economy has started become more prominent between 2011 and 2012 after the exceptional accomplishment by Airbnb and Uber. (Martin, 2016). Acording to Carr (2012), Airbnb has become a major element in changing the stagnant hotel industry back in 2011 which has paved the way for sharing economy. Schor and Fitzmaurice (410:2015), further elaborate terms such as “sharing economy”, “collaborative consumpation”, or “peer to peer economy” are common terms used to define an activity of sharing between one person to another to provide items or services that let the user the ease of using a certain services or goods without having to own or buy the said items or service.
In sharing
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(2016) towards the participants who have used Airbnb, users have shown that they do not see Airbnb as the appropriate substitute for hotel. Majority sees the lodging listed in Airbnb is more suited for younger people or people with lower income as travelling is made easier and more affordable with Airbnb. Mostly agrees staying at places recommended by Airbnb allows visitors to experience the area better than hotels.
However, based on the interview conducted in research with 12 hotel executives, majority perceived Airbnb imposed no threat towards hotel business as they feel Airbnb is more appropriate for travellers who are looking for houses rather than rooms (Varma et al, 2016). As a consequence, they believe Airbnb and hotel industry are two separate division as Airbnb is seen as a company that is existed to provide services that cannot be fulfilled by hotels. For example, certain travellers who are looking for adventures will be more satisfied to stay at accommodation by Airbnb rather than hotels because they offer a reasonably intimate atmosphere than hotels. In addition, for guests who are travelling with families, Airbnb is a more reasonable choice in terms of cheaper accommodation as some hotels prohibited more than four people to stay in one
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Conversely, Queensland Tourism Industry Council (2014) perceive Airbnb can be a menace to the traditional tourism and hospitality business mainly towards budget hotels. A research on the impact of Airbnb to hotel profits in Texas by Zervas et al. (2015) also shown the impacts are greater for budget hotels, independent hotels and hotels that are not suitable for business travellers. This is due to the accommodation provided by Airbnb is relatively cheaper than hotels in certain region and is far more worthwhile by giving the traveller a more significant social encounters with the locals living within the
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