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Evolution of lodging networks during the economic crisis: What happened to Airbnb and to budget hotels in the context of the crisis in the USA?

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case study
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25 pages
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  1. Introduction
  2. Impacts and aftermaths of the crisis on the hospitality industry
  3. Impact of the crisis on budget hotels
  4. Evolution of Airbnb during the crisis
  5. Impact of Airbnb on hotel industry
  6. Conclusion

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.?[3] 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). [...]


[...] In the case of Airbnb performed better during and after the economic crisis, can hotels react in the same way? Our study will focus only on the USA for 3 reasons. First, the financial crisis has started in the USA, as explained above. Second, Airbnb is an American company and is well developed in this country. Third, the few existing studies about the impact on Airbnb on hotels take place in USA. Impacts and aftermaths of the crisis on the hospitality industry The financial crisis started in the US housing market in 2008 and severely damaged the economies of many countries, including the US (Marshall, 2009). [...]


[...] Describing the state of economy segment before and during the crisis, and explaining how they tried to face it. Panayotis, G Evolve or die out!. [Online] Available at: http://hospitality-on.com/en/editorial/georges- panayotis/evolve-or-die-out/ [Accessed 2015]. Explaining which lessons hoteliers can learn from Airbnb's success Protiviti Inc Global Financial Crisis Bulletin - Impact of theEconomic Crisis on the Hospitality, Travel and Leisure Industry. [Online] Available at: http://www.protiviti.com/en-US/Documents/Newsletters/Global- Financial-Crisis/FinCrisis_Bulletin061909.pdf [Accessed 2015]. Explaining the different challenges that hospitality sector is experiencing as a result of the crisis. [...]


[...] The impact on hotel management Airbnb is not only impacting the turnover of hotel, but also the way they are doing business. In a short-term issue The price policy is more and more established considering the offer of alternative accommodations, and including it in their set of competitors. Indeed, a study carried by Hospitality-on (Hospitality-On, 2015) states that 12% was doing it by end of will do it by 2015, and of the remaining plan to do it later. As a conclusion, hoteliers are more or less aware of the risk for the future of the hotel industry represented by the sharing economy In a long-term issue best hoteliers I know are studying Airbnb, not as a threat, but as an educator and indicator of the shifting tastes of the traveling public?[7] claimed Chip Conley - Head of Global Hospitality and Strategy for Airbnb (Watkins, 2014). [...]

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