The Growing Sharing Economy
The advancement of technologies enhances people to adopt them and apply to their businesses. Economic growth nowadays is run by technologies; one of those is the sharing economy. Sharing economy is one of the fastest-growing business trends in which its value is predicted to increase to 335 billion U.S. dollars by 2025 (from just 15 billion U.S. dollars in 2014).
What exactly is the Sharing Economy?
Sharing economy is an economic principle where technologies are used to facilitate the exchange of goods or services. It is when assets owned by members of such a network can be temporarily accessed by others through online platforms such as a shared marketplace, collaborative platform, and peer-to-peer application. Thanks to the accessibility to the internet and the advancement of mobile technology, managing a transaction in a share-based platform could not get any easier. Some of the common sharing economy platforms these days are such as Uber, Grab, Airbnb and eBay.
Considering the real estate and hospitality sectors, Airbnb is one of the popular shared-based websites and applications. It is an online marketplace for vacation rentals where it connects people who want to rent out their properties with people who are looking for accommodations in that location. Airbnb is now available in over 100-thousand cities and 191 countries and regions. This tech startup unicorn has effectively transformed a digital platform into the Biggest Hotel.
More people are looking for accommodations in Airbnb over a hotel room because they usually offer a lower price. While some people are looking for a space that can cover a large group of people, Airbnb can respond to all of those needs. Furthermore, for the hosts, participating in Airbnb is another way to earn some income from their property.
The growing sharing economy provides alternative ways to make extra income that had never been available in the past. Even though joining Airbnb could make a lot of money for the hosts; however, the hosts must be comfortable to navigate through unclear local laws and regulations as well as taking on additional legal liability. Moreover, in the tourism industry, another type of business that involves sharing economy is a travel package service which Airbnb itself also started to offer this kind of service as well.
Yet, sharing economy platforms create such enormous advantages for both users and owners; however, risks are still presented. For hosts, one of the most significant risks is that their property will be damaged. But luckily, Airbnb provides a Host Guarantee program that offers them some assurance, but it does not cover everything.
It is undeniable to say that the growing sharing economy will definitely affect other hospitality and real estate businesses. Even though it is said that Thailand will not be affected much by the growth of sharing economy businesses, however, the number of Airbnb accommodations is increasing two times every year. Therefore, in this digital era where tourists depend more on Smart Tourism (using technologies to help travelling), it is crucial for business owners always to prepare themselves and be ready to adapt their businesses in accordance to the changing environment.