Success of Airbnb, Vayable Reflects New Sharing Economy Vacation Trends
Sharing economy websites that market room rentals like Airbnb, or market tour guides like Vayable, are shaping a new generation of vacation planning and inspiring traditional travel companies to cater to younger consumers that frequent those sites.
Airbnb and similar sharing economy sites practice what they call collaborative consumption, which is purchasing travel services such as room shares with another individual, not a company. The spread of Internet access creates new opportunities for small tech companies to offer niche travel services including Airbnb, which offers people a platform to market rooms. Websites including Uber and Lyft also allow people to contract their vehicles as rental cars that can be called using a mobile application.
"The tourism industry in particular is an early adopter of the sharing economy," says Molly Turner, director of public policy with Airbnb. "We are in this post-modernist moment where everything that is unique and one of a kind of popular. Niche tourism is a growing trend. The sharing economy hits the nail on the head since you can't get more authentic travel than interacting with a local by staying with them, touring with them or driving in their car with them."
Vayable offers a market for niche tourism, allowing users around the world to sell individual tours, as part of what the company's CEO Jamie Wong calls "Travel 3.0." The rise of websites that offer niche travel services are innovating and branching out from the "Travel 2.0" that brought hotel and flight booking online with websites including Expedia and Hotels.com, now the norm for travel planning, Wong says.
Traditional travel companies like hotel chains are shifting towards more digital marketing strategies and encouraging more user reviews to gain favor with the Millennial generation, according to a report from market research firm Euromonitor. The report called Millennial sharing economy habits an example of "the future of travel."
"Like it or not, the sharing economy is hard to stop because consumers seek authentic experiences and value for money and the technology is already there to make this happen," the report said. "In the sharing economy, brands must relinquish some control to their customers. Consumers want their voices heard, so companies should seek input on branding, service, design and technology."
During busy travel weeks Airbnb can create more rental rooms when hotels in a city fill up, including during the recent Salesforce conference in San Francisco when the company helped accommodate more travelers, Turner says.
"The folks we are accommodating are not taking business from the hotels. In all of our top markets, hotels are often at capacity." Turner says.
Collaborative consumption websites are creating new options for travel but they are not harming the profits of large companies like hotel chains, says Michelle Grant, a research manager at Euromonitor. Luxury hotels and premium air travel grew between 5 to 10 percent per year from 2010 to 2012, bouncing back from declines because of the financial crisis, Euromonitor's report explained.
The innovation of collaborative consumption websites appears to help established travel industry businesses rather than disrupting them by offering more guided tours off the beaten path, making it easier for travelers to rent affordable hotels and move around cities in convenient rental cars. By encouraging room rentals, Airbnb generated $632 million in economic activity in New York City in one year and supported 4,580 jobs throughout all five boroughs, according to a study by market strategy group HR&A Advisors published in October, which found approximately 90 percent of Airbnb hosts rented out the home they live in as an extra source of income.
"Technology is making traditional travel experiences in places like Europe more accessible to a wider range of people in a shorter range of time in an affordable way," Wong says. "It's changing the way people think about travel and their time off. People need to go deeper searching for a unique travel experience to have the kind of dinner party conversation about their trip and to have a sense of satisfaction."