Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Airbnb and hotels: friends, enemies or frenemies?

Airbnb and hotels: friends, enemies or frenemies? The purpose of this paper is to explore the intricate relationship between the flagship of the sharing economy, Airbnb and hotel revenue per available room (RevPAR) in South Africa.Design/methodology/approachTo identify the impact of Airbnb on hotel RevPAR, the paper used a triple difference-in-differences framework that compares changes in cities in South Africa where Airbnb started operating relative to areas without Airbnb. A total of 569 hotels were analysed.FindingsWhile the study finds no evidence of adverse impacts of Airbnb on hotel RevPAR, the findings show that the entry of Airbnb led to a decrease in RevPAR of budget hotels. However, its impact is more pronounced during periods of peak demand, consequently, disrupting the pricing power of hotels.Research limitations/implicationsThe research was based on the impact of Airbnb on hotel RevPAR in hotels situated in specific cities in South Africa. Caution is therefore required when generalising the findings of this study to other hotels in other geographic areas. Moreover, if a longer time series data set of hotels in the post-Airbnb time period could become available, it would be interesting to further investigate the time-varying dynamic effects of Airbnb on hotel RevPAR. However, the findings underscore the notion that innovations are not intrinsically disruptive but only relative to another product. In so doing, the study adds to the limited body of work in the field on disruptive innovation and to the academic discourse on innovation in tourism more broadly.Practical implicationsFirst, the findings suggest the impact on hotels tends towards Airbnb generally playing a largely complementary role rather than a diversionary one. However, to increase RevPAR, hotels should systematically change their pricing models to account for flexible capacity by rethinking the wisdom of seasonal pricing and reduce prices during peak seasons to avoid inviting more competition from Airbnb.Originality/valueTo the best of the author’s knowledge, this paper is the first to explore the relationship between Airbnb and hotel markets using a triple difference methodology. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Culture Tourism and Hospitality Research Emerald Publishing

Airbnb and hotels: friends, enemies or frenemies?

Download PDF
16 pages

Loading next page...
 
/lp/emerald-publishing/airbnb-and-hotels-friends-enemies-or-frenemies-0Ij1GvTB3q

References (16)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1750-6182
eISSN
1750-6182
DOI
10.1108/ijcthr-02-2020-0051
Publisher site
See Article on Publisher Site

Abstract

The purpose of this paper is to explore the intricate relationship between the flagship of the sharing economy, Airbnb and hotel revenue per available room (RevPAR) in South Africa.Design/methodology/approachTo identify the impact of Airbnb on hotel RevPAR, the paper used a triple difference-in-differences framework that compares changes in cities in South Africa where Airbnb started operating relative to areas without Airbnb. A total of 569 hotels were analysed.FindingsWhile the study finds no evidence of adverse impacts of Airbnb on hotel RevPAR, the findings show that the entry of Airbnb led to a decrease in RevPAR of budget hotels. However, its impact is more pronounced during periods of peak demand, consequently, disrupting the pricing power of hotels.Research limitations/implicationsThe research was based on the impact of Airbnb on hotel RevPAR in hotels situated in specific cities in South Africa. Caution is therefore required when generalising the findings of this study to other hotels in other geographic areas. Moreover, if a longer time series data set of hotels in the post-Airbnb time period could become available, it would be interesting to further investigate the time-varying dynamic effects of Airbnb on hotel RevPAR. However, the findings underscore the notion that innovations are not intrinsically disruptive but only relative to another product. In so doing, the study adds to the limited body of work in the field on disruptive innovation and to the academic discourse on innovation in tourism more broadly.Practical implicationsFirst, the findings suggest the impact on hotels tends towards Airbnb generally playing a largely complementary role rather than a diversionary one. However, to increase RevPAR, hotels should systematically change their pricing models to account for flexible capacity by rethinking the wisdom of seasonal pricing and reduce prices during peak seasons to avoid inviting more competition from Airbnb.Originality/valueTo the best of the author’s knowledge, this paper is the first to explore the relationship between Airbnb and hotel markets using a triple difference methodology.

Journal

International Journal of Culture Tourism and Hospitality Research – Emerald Publishing

Published: Apr 30, 2021

Keywords: Airbnb; RevPAR; Disruptive innovation; Seasonal pricing; Pricing power; South Africa

There are no references for this article.