How the Sharing Economy Is Transforming the Short-term Rental Industry
The world of short-term rentals, Airbnb being Exhibit A, is barely the tip of the iceberg when it comes to how rapidly large-scale change is coming to the real estate and hotel businesses via the sharing economy. “Rather than buying or signing leases for a specific residence or office, people will one day have membership options with companies that guarantee space in any of their facilities worldwide –timeshares for the twenty-first century,” writes Peter L. Allen in this opinion piece. Allen is head of the outreach and public affairs department of Agoda.com, the Asia-based subsidiary of Booking Holding. He also notes that several other waves of transformation are on the way.
The advent and rapid expansion of the sharing economy are changing the accommodations industry. The avatar of this change, of course, is the rise of Airbnb, which has grown from a tiny San Francisco seedling called “Airbed and Breakfast” into a global player – but the change is much broader than that. A number of major short-term rental players now offer over a million listings each, and investments have been pouring in. The hotel industry has begun to innovate and adapt in response. Dozens, and probably hundreds, of ancillary companies are popping up (and sometimes popping down again), offering hosts and guests new services and new ways to travel. A few companies are experimenting with what Homelike co-founder Dustin Figge has called “living as a service.” These developments create opportunities (new business models, new companies, new jobs), difficulties (Schumpeter’s “creative destruction” at play), and challenges (how do governments manage, regulate, tax and extract benefits from accommodations that are alternatively residential and commercial?)
Click below to read the full articlefor The Wharton School at the University of Pennsylvania .