In the past, a good number of individuals opted to list their own homes or other residential properties on internet websites to enable visitors looking for an accommodation to stay to do so conveniently (Krotoski, 2014). Visitors or guests included students from neighboring universities and colleges, people on short business related travels, regular travellers, as well as tourists. As such, the associations between guests and the host were not only human and intangible but also palpable. Then organizations like Airbnb and VRBO also known as Vacation Rental by Owner entered into the sharing economy, more specifically, the rental accommodations services industry. These two organizations have disrupted the accommodation rental services industry considerably compelling other market players to exhibit them in bad taste (Krotoski, 2014). This memo seeks to discuss the services offered by the two companies as dominant players in the accommodation rental services industry highlight advantages and disadvantages associated with the services offered as well as their impact on the tourism industry.
Airbnb and VRBO
This is a San Francisco California based startup company established eight years ago whose business operations revolve around the sharing economy for rental accommodation services industry (Krotoski, 2014). In these 8 years, the company has grown extensively to establish a vibrant community market place where homeowners as well as prospective guests have the opportunity to discover, list as well as book accommodations of choice set in numerous locations in major cities and towns on the globe (Krotoski, 2014). Through its official website, a homeowner seeking to list his or her residential home or apartment is able to earn an income from connecting with guests from all over the world seeking a place to stay. Such listings or bookings can be conveniently done online or simply on a tablet or smartphone.
Therefore, Airbnb through its website offers potential guests with different types of accommodation ranging from flats to castles to seaside villas (Krotoski, 2014). The company prides itself in being a free market player such that supply and demand mechanisms determine pricing of different accommodation types. For instance, one can rent a flat for a night’s stay, rent a castle for seven days, or even accommodate a seaside villa for a month or more. Its ability to capitalize on excellent client experiences has seen it realize a rapidly growing community of satisfied users (Krotoski, 2014). It is not only a very fruitful endeavor for people seeking to convert their extra space into cash but also an opportunity to showcase such space and related services to millions of potential customers.
VRBO is Airbnb main business rival. It is an affiliate of the HomeAway franchise and specializes in offering its clients vacation rentals (VRBO, 2016). Its target market includes friends and family looking for ideal accommodations while on vacation at appropriate prices. Overall, services offered are very similar to what its rival Airbnb offers.
Given the disruptive nature of Airbnb and VRBO services, there have been false stories propagated through numerous media houses on the inappropriateness of hiring the services of these two companies. It is therefore important to point out the advantages as well as disadvantages of using the services accorded by the two dominant players in the rental accommodation services industry.
Advantages
There are a number of compelling reasons for homeowners and guests alike to seek to enjoy the services offered by the two companies. The first advantage is associated with the monetary benefits homeowners are able to earn by reason of hiring out extra residential spaces through the two companies (Hughes, 2014). Indeed, a growing number of homeowners are earning extra income from hiring out spaces to the two companies. For instance, depending on the location of an individual’s home or residential apartments, he or she gets the opportunity to earn extra income of about 100 dollars and above for every night a spare room is hired out (Hughes, 2014). Within the San Francisco area, an entire home can be hired out for about 700 dollars per night (Hughes, 2014).
Another advantage associated with Airbnb and VRBO is that it offers both the guests and hosts with the opportunity to create international networks (Hughes, 2014). On the same note, travellers have an easy time relying on a trusted company to guarantee they acquire ideal accommodation regardless of which part of the world they seek to visit (Hughes, 2014). Hosts appreciate the positive consumer behavior outcomes associated with guests who have previously used services offered by the rental accommodation services industry.
Disadvantages
As much as the industry has been of great benefit to both homeowners and travellers, it does project a number of disadvantages that are worth noting. The world is not perfect in every way and will not become so any time soon. There is always the likelihood of a guest or even the host for that matter being evicted (Hughes, 2014). Some individuals have opted to rent houses in highly priced apartments with the sole aim of subletting them out to guests from Airbnb or VBRO. When property owners find out, they tenants subletting the premises often get evicted. This has led many travellers to sidestep such risk and opt to seek travel accommodation in the traditional way. Another disadvantage associated with the two companies is that there is the high likelihood that by offering short-term accommodation to travelers, one may be indeed breaking the law (Hughes, 2014). For instance, the city of New York has an ordinance, which proclaims that homeowners cannot offer temporary stay to visitors. In situations where the homeowner is found to be breaking this ordinance, he or she suffers a hefty fine while the guest suffers the humiliation of bearing witness to such an event (Hughes, 2014). Homeowners are also weary that some guests may not be as civilized as may be desired going as far as trashing apartments hired out to them. In such instances, homeowners are left with a bitter taste in their mouth after dealing with rental accommodations services companies (Hughes, 2014). It is however, important to point out that both companies have a set of compensation packages for relieving the anguish homeowners’ face in such situations.
Impact on the Tourism Industry
As rental accommodations services industry players, Airbnb and VBRO have presented a significant economic impact on other industries, the most notable one being the tourism industry (Krotoski, 2014). As players of the sharing industry, both companies have had some incremental impacts on the tourism industry. Since they make acquiring accommodation in unknown locations easy for travellers, the companies are by extension allowing for easy and more travel for visitors regardless of the region of the world they come from or the place they wish to visit.
Conclusion
The information contained in this paper has shown that Airbnb and VBRO have come to complement the earnings of homeowners from different regions in the world as well as enabling travellers to visit regions and coutries with an assurance of convenient accommodation. There are both advantages and disadvantages to the services offered by this relatively nerw industry though the outcomes have been exceptionally positive. More so, the industry has had an incremental impact on the tourism industry as it has seen more tourists visit into the country without the need for hiring some sevices traditionally associated with the hotel industry.
References
Hughes, M. (2014). The Risks and Rewards Of Renting Out Your Apartment On AirBnb. Retrieved from http://www.makeuseof.com/tag/risks-rewards-renting-apartment-airbnb/
Krotoski, A. (2014). Airbnb, The Home-Renting Website, has been great for me, but I have Misgivings. Retrieved from http://www.theguardian.com/technology/2014/oct/13/airbnb-ethos-property-rental
VRBO. (2016). The world's largest selection of vacation rentals. Retrieved from https://www.vrbo.com/info/about-the-family
