P2P, Peer to Peer Marketplace, a new phenomenon has emerged and expanding with pioneers in the world: Airbnb, Uber, ZipCar, Kickstarter. Share Economy platforms allows people to share their unutilized properties through websites and mobile app without any complicated challenges as compared to traditional Business. The concept is two way communications where in consumers and suppliers can both have economic, social and financial benefit from it. In particular, these platforms provide cost-saving benefits and convenience to the consumers, while allowing suppliers to generate extra income.The rapid growth has been enabled by technological convenience and choices of supply.
Airbnb defines itself as reliable community market for individuals to list, discover and book exclusive accommodations around the world and exemplifies a peer-to-peer marketplace in the sharing economy. Prospective hosts list their unused rooms or apartments on the Airbnb platform, create their own nightly, weekly or monthly price, and offer accommodation to guests. Airbnb derives revenue from both guests and hosts for this service: guests pay a 9−12% service fee for each reservation they make, depending on the length of their stay, and hosts pay a 3% service fee to cover the cost of processing payments.
With Airbnb having served over 50 million guests since it was founded in 2008 and a market capitalization eclipsing $30 billion, it is the largest accommodation firm in the sharing economy marketplace. The extraordinary bulk of listings and record-breaking growth in number of guests has caused Airbnb to be recognized as an “interrupters or game changers” for the lodging industry.
The sharing economy is part of our lives in the real world today. It is happily disrupting many industries and will eventually change many other industries like it has for example UBER- taxi Service and many more. Even Banking Services like deposits and money transfer will be part of sharing economy technology where worldwide banking will be conducted in a very different way.
Airbnb’s technological arrangements permits hosts to easily and effortlessly invite bookings from around the world, as the website/app makes it simple for hosts to post descriptions and images of their spaces, connect with guests, and accept reservations and payments. Likewise, the website develops trust between hosts and guest through guest reviews about each other and lodging establishment. Such process ensures that parties, host and guest conduct themselves in an acceptable manner. There is a mandatory reporting system for the hosts and the guests. If a host does a poor job for the guest, they are strike out of the program. If a guest misbehaves, they will never get another room on Airbnb.
Small boutique hotels swiftly understand that they can list available rooms on Airbnb instead of the online travel agencies and save 20% to 22% on commissions, and get better effective room sales and yield without all that fee cost. This will be additional fast emergent trend that will influence the industry. Airbnb thought out in what way to challenge the norms of distribution systems. AirBnb has rapidly become a threat to hotels as travelers select to book with independent hosts on the website rather than with traditional hotels.
The trends reflect that the wide range of incentives interest guests to Airbnb but primary reasons must be pragmatic like cost, location and basic amenities with safety and security and other secondary reasons could be novelty, view of the room etc.
With Airbnb’s the guest will also engage with “Local Tourism” as he is not only connected to local truth but wider neighbourhood and that include religion, entertainment, food walk etc. and that is one of the unique value proposition to the Tourists. It offers both practical Benefits and tourist experience.
Airbnb appears to be generally serve as a substitute for Mid range to Budget hotels, whereas upscale hotels have not yet been significantly affected. The sharing economy services in most sectors in India are in its developing stage. The sharing economy as a concept first became popular in India with on- demand transportation platforms and now being followed in other sectors
In India 18,000 properties are listed on the Airbnb platform across 100 cities and and half of the hosts on Airbnb are women, quoted by Chief Technological officer of Air BnB. For the sharing economy to further flourish in India, the sharing platforms will have to provide few key imperatives. This includes definite trust between the parties involved in a transaction. A technology advancement that provides a transparent pricing, verified secured listings and full proof background checks, and guaranteed delivery of services will strengthen consumer faith in these platforms.