Do you remember when the only viable lodging options for traveling were expensive hotels? Airbnb has drastically improved where we stay when we travel, giving us comfortable options at a fraction of the cost of big, excessive hotels. Not only that, but Airbnb has also helped to make a great difference in the economy, growing what is called the “share economy”.
The share economy is an economic model built around the prospect of sharing resources—be it human, physical, or intellectual. Sometimes called the peer economy, it allows peer-to-peer transactions and exchanges primarily through technology and online platforms. One such platform is eBay, where anyone is allowed to sell goods that anyone is allowed to buy. It opens up a new dimension for being able to share what’s already available, at a price. Airbnb is a lodging service that opens up existing homes to travelers and backpackers. In its operation, it has greatly helped to grow the share economy as well as the economy itself.
Airbnb management describes its service as making its customer able to “book unique homes and experience a city like a local.” This enables people to rent short-term lodging, usually in the form of apartment rentals, hostel beds, or homestays, sometimes vacation homes and hotel rooms. It is a peer-to-peer platform in that the company does not own any of the property or lodging, it merely serves as a broker, receiving a commission from the guest and host with every booking. At present, there are over 3,000,000 listings for lodging available in 65,000 cities, in 191 countries, with the cost of the lodging set by the host.
In its operation, it has created a positive impact on the economy in cities all around the world. Here’s how.
Of all the hosts on Airbnb, it was revealed in a study that 81% share the very homes they live in. These homes sometimes belong to people who make low to moderate income—the number is 52%–, so the business they receive from travelers helps to make ends meet. An astonishing 53% of all hosts said that Airbnb had helped them keep living in their homes, while 48% explained that they use the income to pay for necessities and regular expenses such as rent, utilities, and groceries.
The people who own these homes range anywhere from elderly couples to young graduate school students; a guest can share in all walks of life when they stay at an Airbnb venue. It provides countless opportunities for income for people who otherwise don’t have them
Guests also benefit greatly from using Airbnb, as they are able to enjoy local accommodations without having to spend so much for more expensive lodging.
What makes the Airbnb experience unique and good for the local economy is that 91% of travelers who use the service use it in order to experience life as a local, while 79% of users want to be able to explore specific neighborhoods. This means that it generates income for local establishments, leading more tourism and visitor spending to them that they would not otherwise get. This creates a major impact on neighborhoods that are separate from the main hotel districts, also allowing for a unique way to experience a city beyond the over-advertised methods prescribed by major tour companies. Airbnb allows the traveler to experience the city in an entirely new way, which leads us to our next points.
It has been found that Airbnb guests stay 2.1 times longer than regular visitors to a city, and are likely to spend 2.1 times as much due to the savings in lodging. In addition to this, the extra spending also comes from being able to experience their neighborhoods in a way that hasn’t been done before, as the study has shown that 42% of guest spending comes from when they are in the neighborhoods they stay in.
Airbnb has stated the example of San Francisco on their blog. Here is an excerpt:
On average, a guest to San Francisco will visit the city for 3.5 days, spending $840 in the process. This is compared to the average Airbnb guest who stays in the city for 5.5 days and spends $1,045.
The extra income generated that goes towards local businesses helps them to thrive in a way that wasn’t possible before. This helps to bolster the local economy, as well as create more jobs for more people.
Airbnb has hosts that operate in 191 different countries, including Airbnb Hong Kong, thus bringing the same effect it has on the personal and local levels of economy all around the world. Aside from this, it enables the user to make more planet-friendly choices as it emphasizes being able to use what is readily available, promoting sustainable communities. In lesser-developed countries, Airbnb creates job opportunities for skilled workers to bring their trade to cities that need them the most.
One of the greatest things is that it allows the traveler to experience the world at a local level. This creates a sense of culture sharing, which is important in the share economy. It helps to make the world feel smaller and more welcoming, and gives a genuine feeling of community no matter where you are in the world.
Ultimately, Airbnb has helped the economy both within and without its economic model. Much of the spending that goes into Airbnb travelers is new spending. As the hotel industry’s reservations and rates for occupancy climb up, so do reservations for Airbnb venues, indicating that there is nothing being taken from the hotel industry, as the “live like a local” aspect of the travel often attracts a different sector of society—those who are more price sensitive and are keen to experience something different than what is normally advertised.
For something that is able to help people live in a world that is less-selfish and more giving, Airbnb does an excellent job. As a leader in the share economy, it does its job well, and helps to sustain the lives of millions of people the world over, as well as help to feed the wanderlust found in so many travelers. That in itself is sharing something special.