The sharing economy is what brought us Lyft and Uber, the ride-sharing services, but what this collaborative consumption trend was started by is a little, remarkable company called Airbnb.
We have seen the sharing economy absolutely BOOM in the past few years. You’re not using those power tools? Rent them out! This shift in how people consume has been so rapid, that economists and regulators aren’t sure what the impact will have in the long-term. What we can see now is that people are trusting each other more than they did five years ago thanks to the people that are churning out these apps and sites that allow for consumers to connect directly to one another to bypass established institutions completely.
Booking a hotel or motel was a must when traveling for a business meeting or a family vacation just seven short years ago. Now, you have the option of staying in someone’s home for, often times, less than what it costs to stay in a hotel. Not only can you get a better deal, you get to stay in a kitschy, quirky neighborhood or hip, urban studio and discover how locals truly live in your destination. You can also get some wonderful recommendations and extraordinarily hospitable hosts. One Airbnb-er said of her first experience: “At first, I was creeped out and afraid to try it. It ended up being the best place we ever stayed. The person who owned the home [in Rome] told us his favorite places to go and always had fresh pastries for breakfast.”
Most people need to get over that stigma of “I’m staying in some random stranger’s house; what if they’re a creep?” But once you have that first great experience, people have become Airbnb advocates. When asked where our interviewee would stay next time she travelled, the answer was a solid “Airbnb.”
Looking at the actual numbers of hotels and Airbnb, Airbnb has only affected the hotel industry a fraction of the amount of what most people think. Many believe that, like with Lyft and Uber and Sidecar, this is the death of the long-dominating monopoly: hotels. In a study on the effects of Airbnb on the hotel industry in Texas, it was found that a 1% increase in Airbnb listings results in a 0.05% decrease in hotel revenues. While 5% of a percentage point is tiny, Vijay Dandapani, the president of Apple Core Hotels in New York claims, “I see a direct correlation between our revenues going down and [Airbnb’s] going up.” The numbers are small, but they’re making an impact. By 2016, it is expected that Airbnb’s bite of budget hotels’ revenues will be 10%. That’s enough to make some companies leave the market.
Airbnb’s impact on the industry of needing a place to stay while not at your house (can we call it the hotel industry anymore?) has been slow and steady. There has been backlash, like from New York in which laws prohibit the rental of rooms, apartments, and houses (let’s call them dwellings for short) for under 30 days unless the owner is present. So, if you’re heading out of town and renting your dwelling to a nice couple from Connecticut, you’re a lawbreaker. SHAME. You aren’t exactly the criminal mastermind New York is looking to crackdown on, though. The state is having some issues with pesky tax evaders, as the burden of paying city taxes is put on the host, and people can use Airbnb for questionable things. So, Airbnb isn’t perfect, SUE THEM. Oh wait…
So, whether you’re out to rent a place or list your own, know that you’re joining the ranks of millions that have ditched the hotel industry in favor of the sharing economy. Not only does this show that people are looking for more intimate, authentic experiences, but that they are building trusting relationships with strangers, which is a pretty big stride for humanity. So, for a second, forget about those numbers and the possible death of the hotel industry and take a step back. Airbnb is bringing people from other countries, from other continents together, giving them a chance to meet and learn about the cultures and localities they could only read about. In the midst of all this terrible war and hatred and endless feuds, let’s appreciate that people are still willing to welcome strangers into their homes. And that’s pretty remarkable in and of itself.