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Case Study: Airbnb – Navigating Contemporary Issues
The case study focuses on analysing Airbnb`s role within the contemporary tourism industry. By evaluating Airbnb`s business model, the report aims to explore the challenges and opportunities it faces, including regulatory pressures, community impacts, and sustainability issues. The goal is to apply relevant tourism management theories to provide a comprehensive understanding of how Airbnb operates and adapts within the ever-changing tourism landscape.
Airbnb, founded in 2008, is a peer-to-peer platform that allows property owners to rent their homes, apartments, or rooms to travellers, thereby transforming how people experience accommodations (Guttentag, 2015). Operating in over 220 countries, Airbnb has grown to be a significant player in the tourism sector, offering unique and personalized experiences to travellers worldwide (Dolnicar, 2019). Its business model leverages the sharing economy, allowing individuals to monetize underutilized properties, thereby democratizing access to tourism revenue (Martin, 2016).
However, Airbnb faces several contemporary issues that affect its operation and the broader tourism ecosystem. One key issue is regulatory challenges. Cities worldwide, including Amsterdam, Barcelona, and New York, have implemented stringent regulations to control Airbnb’s operations (Nieuwland & van Melik, 2020). These restrictions aim to address concerns such as housing shortages, rising rental prices, and loss of community character. Gentrification is another pressing issue. As more tourists occupy residential neighbourhoods, local communities often face displacement due to rising costs (Wachsmuth & Weisler, 2018). Furthermore, competitive pressures from traditional hotels and emerging rental platforms like Vrbo have pushed Airbnb to continuously adapt its offerings. These challenges directly influence Airbnb`s ability to operate sustainably while remaining profitable.
Airbnb’s innovative business model also intersects with environmental concerns, particularly in areas of waste management, energy consumption, and the preservation of local cultures (Gössling & Hall, 2019). The sheer volume of tourists booking through Airbnb raises questions about the sustainability of urban neighbourhoods and the unintended consequences of overtourism. Consequently, Airbnb must balance expansion and community relations, while adhering to responsible tourism practices.
The demand for Airbnb services is driven by several evolving consumer trends. The rise of the sharing economy and a desire for more authentic travel experiences have significantly contributed to Airbnb’s popularity (Belk, 2014). Tourists today are increasingly seeking unique stays that offer more immersive experiences, such as staying in local neighbourhoods rather than commercial tourist districts. This shift reflects the consumer preference for culturally rich and personalized travel experiences (Bakker & Twining-Ward, 2018).
Airbnb also appeals to digital nomads and remote workers, a demographic that has grown rapidly in the wake of the COVID-19 pandemic (Richards, 2020). These individuals prioritize flexibility and are drawn to Airbnb’s offerings of extended stays, affordable accommodations, and home-like amenities such as kitchen facilities and workspaces.
As these demand characteristics evolve, Airbnb has adapted its supply strategies accordingly. The platform has expanded its offerings to include Airbnb Experiences, which allows hosts to offer local tours and activities, thus catering to the traveller’s desire for more in-depth cultural engagements (Cheng, 2016). Moreover, Airbnb has focused on recruiting new hosts, particularly in underrepresented areas, to diversify its supply and capture untapped markets.
Airbnb’s operations have both positive and negative effects on host communities. Economically, Airbnb provides a significant source of income for property owners, enabling residents to benefit directly from the tourism economy (Frenken & Schor, 2017). Additionally, local businesses, such as cafes, restaurants, and attractions, also benefit from increased spending by Airbnb guests. These economic gains are particularly evident in less-touristed areas, where traditional hotel infrastructure may be limited.
On the social front, however, Airbnb’s presence can disrupt communities. In urban areas, the rapid growth of Airbnb listings has been linked to rising rental prices and reduced housing availability for residents (Lee, 2016). This phenomenon, often referred to as gentrification, has led to residents being displaced and neighbourhoods losing their cultural identity (Wachsmuth & Weisler, 2018). In some cases, residents have reported a reduction in quality of life due to increased noise levels, overcrowding, and a transient population of tourists who may not engage with local norms or values.
Environmentally, Airbnb faces scrutiny regarding its impact on urban infrastructure and resources. Unlike hotels, which are often required to adhere to environmental regulations, individual Airbnb hosts may lack the incentives or knowledge to implement sustainable practices (Gössling & Hall, 2019). This can lead to increased waste generation, excessive water consumption, and carbon emissions from energy use in properties rented through the platform.
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