The financial crisis started In September 2008, in the USA, with the bankrupt of Lehman Brothers. This financial shock led to a deep and long economic crisis. The USA has started to experience economic recovery in 2010 but the economic growth has still been low.
The hospitality industry, with most industries, has suffered from the economic crisis. Occupancy rate and other indicators decreased during the crisis. In the meantime, the sharing economy, in many industries, has boomed. Indeed, in hospitality industry, some lodging networks have emerged.
In this study, we will focus on the most famous one: Airbnb. It is a hospitality exchange website which provides a platform for members, either to rent lodging, either to offer a rental. Although Airbnb is really close to Couchsurfing, money is exchanged and this is why it can be viewed as a direct competitor of hotels and especially the ones the low-end of the market.
[...] Nowadays, a lot of sharing economies appears in different areas, this trend has seen immense growth in recent years. In hospitality industry, there is a particular famous one called Airbnb. History of Airbnb Airbnb is an online community marketplace facilitating short-term rentals ranging from shared accommodations to entire homes that has now contributed more than ten million worldwide bookings to the so-called sharing economy. Indeed, since its inception in 2008, Airbnb started an innovative community marketplace for people to list, discover, and book a wide variety of accommodations around the world. [...]
[...] Converted hotels achieved a RevPAR boom of 11% during the first quarter (compared with throughout the rest of the system) and experience a higher customer satisfaction rate. Alexander said: “There's this misnomer that people in the economy segment want to pay the least amount possible While there's certainly a level at which they do not want to go above, there's still substantial room to ask them to pay some more to get some more.” Lowest price strategy Motel 6 and Hotel 6 chose an opposite approach, trying to be the lowest- priced offering in a defined area (Mayok, 12/05/2012). [...]
[...] Hemmeter, managing director of Thayer Ventures, an investor in travel-related technology companies, hotels has to create additional value through technology to compete against Airbnb (Watkins, 2014) As a conclusion, while today Airbnb's direct impact on hotel's turnover is insignificant, Airbnb will likely to have larger influence on hotel industry in the next years. After impacting the price policy, it may influence the placement strategy and probably the product itself. In some extent, such a lodging network might impact the definition of what a hotel is. Conclusion What happened to Airbnb and to budget hotels in the context of the crisis in the USA? [...]
[...] During the recession, consumers changed their lifestyle including cheaper housing, less travelling and leisure activities. As a result, people stay in hotels only when they absolutely need to, and no longer for pleasure or holidays. We will now explain the major changes on the population and the impact on their spending in hotels. Changes in wealth and income U.S. families saw their mean wealth and income decline by 14.7 percent and 11.1 percent respectively between 2007 and 2010 (Laitamäki & Järvinen, 2013). [...]
[...] It proposes a room less expensive than a hotel and the process is quite simple. However, as Airbnb knew a huge expansion each year, it reinforces its strategy by improving its services. Airbnb nowadays Airbnb is currently the market leader in the room-sharing peer-to-peer online marketplace, but it faces competition from several companies, who are all seeing booms to their businesses as the peer-to-peer economy expands. Four of the top competitors Airbnb faces are Wimdu, Roomorama, and 9flats. These companies have similar offerings in the P2P property rental market. [...]
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