Airbnb - Threat to Hospitality Students?

Airbnb: Threat To Hospitality Students?

Airbnb is a company that operates a website to allow ordinary people to rent out their residence as an accommodation. With ease of access online, cost-savings, household amenities, and the potential for an authentic experience, Airbnb has rapidly expanded to outnumber the total number of listings than the top five major hotel brands combined (Gerdeman, 2018). Airbnb has created a competitive market with hotels and threatens their revenue, however, the hotel industry can still stay competitive and adapt in the sharing economy. While to the public this can seem like a potential loss of jobs for future students, I see that a new competitor can result in a new demand of marketing and services jobs to appeal to customers.

Currently the problem is with fixed investment costs for hotels and fluctuating demands. Lodging demand constantly fluctuates during the year and hotels must figure a way to find a balance of sufficient rooms. Airbnb currently competes by offering cheaper prices when demand is hgh and as consumers become aware, hotels will be affected. In my personal travels throughout the world, I have been selecting Airbnb to experience a more authentic while most importantly, a cheaper lodging solution. A common problem I ran into while trying to obtain lodging was full occupancy or outrageous prices. With what I’ve learned throughout my lodging classes, a hotel could remedy room problems by having altered spaces on demand to accommodate busier times. For example, offering rooms that can double both as a large suite with home amenities and as conference rooms during less busier times. This can bring in more customers during vacation times when demand is high and when Airbnb operates the most. Airbnb succeeds in making lodging accommodations more homey and for larger amount of guests, but with hotels adapting to large rooms to accommodate more guests and double them as conference rooms, this can help hotels adapt in this sharing market (Gerdeman, 2018).

The hotel industry is not just competing with the amount of guests, but through lobbying. Currently Airbnb faces issues on both illegal renting activity and avoiding full tax obligations (Guttentag, 2013). Currently, laws are being passed which disable the ability for hosts to rent out their loadings for extended periods of time. Hotels are currently lobbying with the local and federal government to outright ban Airbnb or tax collections. Since Airbnb does not own real estate and charges fees to its users, taxation is difficult. In places like New York and San Francisco, Airbnb had to drop over 50% of its listings and as a result had to add hotels for lost inventory which results in the loss of their beneficial aspects. If hotels can lobby and get local governments to tax and regulate the rentals as hotels, the hotel industry will reduce competition and consumers will be more satisfied with safety and consistency (Killion, 2018).

During my time visiting Airbnbs I noticed that they lacked convenience, services, and technical help when something went astray. A personal experience was when my family finished renting a home and cleaned it well after leaving, we were charged large fees for uncleanliness. These factors made the experience unpleasant at times and made me regret staying at an Airbnb. While Airbnb has the advantage of home amenities and a more authentic experience, hotels can easily compete with their own unique amenities, convenience, and service. Hotels are frequently built in central locations with easy access to transportation and other services. Airbnbs lack are onsite services such as spas, restaurants, and clubs. Hotels easily target and focus on acquiring guests such as myself into looking for such amenities that Airbnbs cannot possibly offer. Service which is lacking in Airbnb is prevalent and the focus of the hotel industry. More often than not, the service and staff is the most valuable feature of hotels and often a vacation experience. In my experience with working at a Holiday Inn, I have had guests compliment the banquet service and returned again to experience it. Hotels perform exceptionally well when dealing with clients on business as they often have little time and services such as food can be time saving. Hotels offer a luxury experience with the staff taking care of the needs of the guest. As well, any faulty issues within a hotel room can easily translate to a new room, an option Airbnb hosts cannot do.

While Airbnb is a new and disruptive innovation catering to a specific clientele, the hotel industry is competing back with their own innovations, lobbying, and services (Guttentag, 2013). The existence of a new competitor aids in hotels staying innovative and continuing competition to maintain themselves in the industry. While the market has been turbulent upon Airbnb’s entry, the hospitality industry is working together harder than ever and are more alert with development and staying innovative. I think