Assessing the Impact of Airbnb on the Indian Hospitality Sector

Abstract

Across the world Airbnb has become one of the most popular forms of accommodation for travellers, potentially threatening conventional accommodation formats like hotels. This paper examines the impact of Airbnb on the accommodation sector in Chennai. A qualitative method was used using both secondary and primary data. The analysis of the secondary data indicated that Airbnb owes its popularity as it matches current demand among tourists for localized experiences, cheaper rates, longer stays, sustainability, resource conservation, customized services and technology enabled methods of booking and payment. Primary data was collected from 100 guests of Airbnb Chennai. Analysis of the primary data indicated that the guests of Airbnb Chennai are primarily those who used to stay in budget / low priced hotels and resorts. Airbnb does not pose a threat to the 5 star and premium priced hotels in Chennai. Airbnb Chennai offers its guests with personalized local experiences of the city and its surroundings which is much appreciated by the guests. The hosts or the owners of the Airbnb properties play an important role in creating these experiences for guests. Airbnb Chennai was found to be far more accessible using modern technology like the internet / smart phones as compared to some of the budget hotels which do not even have websites. Guests find that Airbnb Chennai offers them rates that enables them to stay in the city for longer periods. The Airbnb format is perceived to be resource friendly, environmental conscious and operating according to the sharing economy principles of recycle, reuse and reduce. As against these advantages vis-à-vis hotels, here are the disadvantages related to security, risk, trust, unprofessional attitude of some hosts and self-service which some guests mentioned as being inconvenient to do in Chennai. These findings have various implications for the hotel sector in Chennai which have been discussed. For example, hotels must become far more personalized and offer more customized services than they have been hitherto offerings. They must be able to provide frequently visiting guests or long-staying guests with special prices and offers. They must leverage their local contacts in Chennai to create the localized experiences that modern tourists demand. They must invest in technology and in digital marketing to increase online presence and visibility. Hotels in Chennai must highlight any sustainable or ‘green’ principles that they have been incorporating into their operations. These and other recommendations have been discussed in further detail and it is hoped that their implementation will result in the hotel sector in Chennai being successfully able to counter the threat posed by Airbnb.

Keywords: Airbnb, Accommodations, Sharing Economy, Local Experience, Online Presence and Visibility

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