The biggest peer-to-peer service for hospitality in the world, Airbnb, has disrupted the hotel industry. According to some remarks about Airbnb rentals, Airbnb providers should be subject to hotel occupancy taxes.
Airbnb says its business model consists of connecting hosts with subletters who rent out their private property for short periods of time. In the past, hotels, such as Hilton, insisted that there were differences between Airbnb and its hotels, claiming Airbnb is a lodging company while Hilton focuses on hotels; however Airbnb hotels those differences are rapidly disappearing.
In the age of Internet disruption, however, and the fact that hotels now have another option, one might assume that Airbnb has negatively impacted the hotel industry.An understanding of the price structure, Airbnb’s primary demographic, and a variety of other factors will shed light on the fundamental differences between the hotel and Airbnb industries.
What Is Airbnb
As the largest peer-to-peer hospitality provider in 2020, Airbnb will generate revenues of $3.4 billion. Its growth has been rapid since it was founded in 2008. Nevertheless, the airline has struggled in the wake of the COVID-19 pandemic, severely limiting travel worldwide. The revenues of 2019 are down 29%, and revenues of 2018 are down 8%.
A key feature of Airbnb’s business model is its marketplace platform that exchanges housing for money between hosts and guests. Guests and hosts can find reviews and social media connections during the application process to build trust among users.
Through the influx of digital technology, users are able to dictate their own experiences and influence the choices of future consumers. However, this is not a unique feature of Airbnb. Several third-party platforms provide the same service as board review systems, such as Yelp and Expedia.
The Hotels of Airbnb
The rents and costs of living in major cities are significantly higher, so hosts and hotels need to factor this into their prices. However, while a major hotel chain maintains a pricing scheme that satisfies consumer demand, Airbnb hosts are free to charge what they deem appropriate.
There are various comfort levels in a hotel room, including beds, bathrooms, and closets. An apartment offers the same amenities but a larger living area and a kitchen. Hotels can be limiting for families or groups on vacation; apartments are more accommodating.
The company recently launched Airbnb Luxe which competes with high-end hotels in the luxury market. Airbnb has become much more competitive since the differences in its offerings have started to diminish, so hotels used to have a safe space where they didn’t have to compete with Airbnb.
How Safe Is Airbnb?
Airbnb is safe because its verification process ensures that those who rent out their spaces are legitimate. Any person who wants to rent out their space on Airbnb must verify their identity through a series of steps. Many properties also have user reviews that provide a general idea of the place and the individual renting it.
However, some people who rent out their spaces are not who they say they are. They are using stolen credit cards to rent out their spaces, and they’re trying to use Airbnb’s verification system as a cover for their crimes. This is why Airbnb has a very strict policy on how people who rent out their spaces should operate. If you plan to rent out your space on Airbnb, you should be aware of all of the factors mentioned above that make Airbnb a safe platform to do business with. If you have any doubts about your ability to verify your identity or if you have any concerns about your rental, you can always ask Airbnb for more information.
Airbnb: Is It Cheaper Than Hotels?
Airbnb can be cheaper than hotels but can also be more expensive depending on the type of Airbnb apartment and hotel. Since Airbnb does not have to pay for the overhead of a hotel or the general management of such a large operation, it is generally cheaper than hotels.