Airbnb: the New Age Platform’s Impact on Budget Hotel Accommodation

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Scientific Essay International University of Applied Sciences Bad Honnef · Bonn International Management Masters International Management Advanced Research Methods Airbnb: The new age platform’s impact on budget hotel accommodation Name: Karan Davis Student ID: 9146141 Lecturer: Prof. Dr. Marcus C Hemmer Date of submission: 09.01.2015 Airbnb: The new age platform’s impact on budget hotel accommodation Airbnb is a website that helps travellers to be accommodated by hosts who have an extra room, entire houses, distinctive accommodations like castles, aeroplanes, igloos and the likes. The unique concept about the platform is that private individuals can rent out their extra rooms thereby having the possibility to generate additional income while holiday goers find renting rooms much more affordable. Airbnb has gained tremendous momentum since its inception in 2008, currently it offers unique travel experiences in more than 34,000 cities covering 190 countries and has more than 1 million listings (Airbnb, 2014). Budget hotels are those which offer basic hotel requirements like room service, telephone, television and restaurant which usually appeals to the budget conscious travellers. As Airbnb is capturing attention of the travellers worldwide, a number of tourists who would have previously stayed in budget accommodation is experimenting with Airbnb. This current trend has affected a number of budget hotels which were developed to cater to this class of travellers. A number of such hotels are worried about their falling occupancy levels but at the same time has to offer standard services and compete with the pricing of rooms offered on Airbnb which is much cheaper. A number of investors worldwide are worried about the potential revenue these hotels can lose out on due to a shift in consumer’s perception about accommodation. The research assumes

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