Sunday, October 6, 2019

How Airbnb effects the Hospitality Industry?

The Airbnb has launched a decade ago and quickly disturbed the hospitality sector. Basically, Airbnb is the market place that connects travellers to local owners. people who don't want to stay in hotels when they visit other city Airbnb is the most prefered place to stay. The most important fact is that Airbnb provides an online marketplace and cheap prices that increase the volume of the customers.

The Growth of  Airbnb :

Airbnb offers listings in 191 countries, and its total number of listings 4 million is higher than the top five major hotel brands combined.
The number of people staying in Airbnb has increased from past year graph below demonstrate the travellers staying in Airbnb in the below graph:



The Effects of Airbnb on Hotel Industry:


According to Richard Gornall," Airbnb remains a major threat to the hotel industry. it is a threat that isn't going away."








Reduce Hotel profits:

The rapid growth of Airbnb leads to a decrease in the profits of the hotel industry.  As per data from 2014, Airbnb reduced hotel profits by up to 3.7 and generated $41 of consumer surplus per room per night and 26 dollars of host surplus. The result, a total welfare gain of $137 million dollars.

Substitute :

Airbnb is the substitute for the people who earlier prefer to stay in hotels on their visits to other areas of the world. but now the scenario totally changed preference for hotels has increased. The 10 cities with the largest Airbnb market share in the US, the entry of Airbnb resulted in 1.3 per cent fewer hotel nights booked and a 1.5 per cent loss in hotel revenue.


The customer makes the Comparison: 


Due to the effect of Airbnb, the customers started making a comparison between the price of rooms provided by hotels and tax imposed. with intentions to save money and need homely environment people to prefer to Airbnb.






Unemployment:



Many hotel employees are losing their jobs because of these decreasing demands. Airbnbs are less labour-intensive than hotels because they do not require the same level of service. Over 2,800 jobs are directly lost to Airbnb, a loss of over $200 million in income for hotel employees.


So, Airbnb is making revenue through sharing economy but its a disruption to the hotel industry as it has many negative impacts on the hotel's example less revenue, more competitions, more efforts made by traditional hotels to attract the customers but there are lots of things that hotels offer that most Airbnb’s won’t be able to. These include Bars , Gym, Pool  , Room Service , Dry Cleaning and many more luxury facilities.






How Airbnb effects the Hospitality Industry?

The Airbnb has launched a decade ago and quickly disturbed the hospitality sector. Basically, Airbnb is the market place that connects tra...