Running Head: FUTURE DISRUPTION 1

FUTURE DISRUPTION 4

Journal Assignment #4: Recognizing Future Disruption

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The hospitality industry has harnessed emerging innovations and also used existing technologies to effectively disrupt its market and grow. In recent years, the hospitality industry has been marked by emerging changes to shape the industry more effectively. The most recent disruption in the hospitality industry is Airbnb. Airbnb has immensely disrupted the hospitality industry forcing the hospitality brands to seek alternatives to beat Airbnb at its own game (Guttentag, 2015). Although Airbnb was launched over ten years ago, it has gained prominence in the last four years quickly disrupting the hospitality industry in every way possible. Airbnb beat the hospitality industry at its own game because it quickly adapted emerging technologies to its own advantage such as having an online marketplace, cheaper rates and having unique venues that accommodate larger numbers of customers(Guttentag, 2015). Such was threatening to the hospitality industry which started registering reduced numbers of customers. According to Bearne, “42% of Airbnb customers had replaced a traditional hotel visit with the digital service”(Bearne, 2018). Even better Airbnb is not mandated to the fees and regulations often required of the hotels like VAT. As response hotels are not just sitting back and accepting the disruption by Airbnb but rather they are seeking to incorporate emerging technologies and trends to help them compete more favorably in the industry.

The success of Airbnb has mainly been because most customers perceive the platform to be more feasible than hotels. For example, during the peak seasons, Airbnb avails rooms in major cities like Los Angeles, San Francisco, and Miami. Also, there exist Airbnb listings even in cities with lower demand like Memphis (Bearne, 2018). Moreover, hotels have the habit of increasing their room prices during the peak seasons making Airbnb a more preferable alternative. Hoteliers, on the other hand, have recognized this problem and to address it they are acquiring new locations to help cater to increased guest bookings during the peak seasons. Also to keep up with this trend hoteliers are spending more unique properties different from the traditional hotels in order to better compete with the Airbnb listings(Bearne, 2018). Also, just like Airbnb, hotels are also emphasizing hospitality and personal experiences and this is evidenced in modern residential designs to create more intimate and personalized styles (Guttentag & Smith, 2017). Ideally, one of the biggest strengths of Airbnb is its ability to offer residential bookings that are unique to certain regions, in most cases a walking distance away from local attractions. Hoteliers are now recognizing this approach, appeals most to millennials and are looking to incorporate the same in their hotels.

Overall, therefore, Airbnb is ultimately the future disruption of the hospitality industry; in fact, Airbnb is a representation of hospitality’s future. Airbnb’s disruptive effect has been probable by taking advantage of the weaknesses innate to the traditional hoteliers. As a response, hoteliers are trying to correct their mistakes by learning from their own weaknesses and also by offering new services. Whereas it is evident that Airbnb is here to stay, hoteliers must thus learn how to incorporate emerging technologies to gain more dominance of the market share. Hence, this means taking advantage of all available resources and technologies to better compete with the Airbnb listings.

References

Bearne, S. (2018). Airbnb is forcing everyone to up their game: how hotels are changing tack. Guardian. Retrieved from:

https://www.theguardian.com/business-to-business/2018/apr/11/airbnb-is-forcing-everyone-to-up-their-game-how-hotels-are-changing-tack

Guttentag, D. (2015). Airbnb: disruptive innovation and the rise of an informal tourism accommodation sector. Current issues in Tourism, 18(12), 1192-1217.

Guttentag, D. A., & Smith, S. L. (2017). Assessing Airbnb as a disruptive innovation relative to hotels: Substitution and comparative performance expectations. International Journal of Hospitality Management, 64, 1-10.