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Should Airbnb be regulated to protect travellers and / or the hospitality industry?
LJ Research’s market research investigates if residential sharing services pose threats to the hotel industry.
The British Hospitality Association, which represents over 40,000 hotels, restaurants and attractions, accused the Westminster Government of “looking towards very prominent, sweeping deregulation, across various industries for the benefit of a few companies, at the cost of consumer safety, job growth, market stability and community interests”.
For an organisation that has consistently campaigned against government red tape, a sense of irony is evident as the BHA continues to advocate better regulation of Airbnb and other services in the sharing economy.
We asked participants in our market research study on Airbnb what they think about regulating this market.
In our online survey we asked travellers to rate, on a ten-point scale, how strongly they agreed with certain statements on Airbnb. The charts below contrast those who strongly disagreed with the statement (by giving 1 or 2 points) with those who strongly agreed with the statement (by giving 9 or 10 points).
Those who lobby against residential sharing services say that governments should set minimum health and safety standards for all accommodation providers and that Airbnb & Co. must comply with the same tax and regulatory requirements that apply to hotels.
Our respondents take a different view on some counts: a very high proportion of travellers (40%) agree that governments should ensure that local health and safety policies apply for Airbnb rentals. However, only 13% think that those who rent out spare rooms should pay the same taxes as hotels do. Respondents from the UK were slightly more likely to be in favour of applying the same tax and regulatory rules to hotels and residential sharing services; those from the US were least likely to do so.
By and large, travellers do not sympathise too much with the hospitality industry’s concerns: whilst just over a third of them, 36%, disagree with the statement that “the government should not in any way regulate Airbnb or other room letting websites”; only 10% think that the government should protect the hospitality industry from Airbnb. Travellers seem to think of their own health and safety when agreeing with more regulation; they seem less concerned about the service disrupting established business models.
This sense was further emphasised in the words of our respondents:
“All accommodation needs to be checked to make sure it is safe, and if staying in a spare room in someone’s house I would feel more comfortable knowing they have been checked. I know this is no guarantee that the person is safe to be with but it would give me the confidence as a single woman traveller to use such accommodation.”
“I’m pro liberalisation of the industry and I’m happy for Airbnb, and planning to use it more. Though, I do agree, that some kind of regulation – hygiene, safety (both physical and financial) – should be done by internet based room/flat rentals. But I strongly disagree with putting these services under the same regulation with professional providers – hotels.”
What can hotels do about Airbnb?
Taken as a whole, our findings suggest that Airbnb is an increasingly popular channel particularly in the budget market: it is most popular among younger segments and those who seek to save money when exploring destinations. There is some evidence that Airbnb’s community spirit and the opportunity it enables for a more authentic holiday appeals but these elements were not strongly emphasised by our respondents.
Our market research suggests that the budget market (i.e. budget hotels, hostels, guest houses and B&Bs) may suffer more widely from residential sharing services than luxury hotels or those accommodation providers who welcome a high share of business travellers.
Our results also suggest two steps these types of businesses can take to combat the threat Airbnb poses. Firstly, proactively highlight the safe environment that you offer in comparison to Airbnb. The lack of a clear minimum standard for health and safety provided by Airbnb establishments concerns many travellers.
Secondly, provide more information about the things to see and do in the area. This information should be available to prospective hotel guests at the time they plan their trip as well as during their trip. This can be done, for example, by embedding onto the property’s website an interactive map (e.g. Google map or Bing map) that lists the pubs, cafes and restaurants in the area. A vibrant community where travellers can meet locals and engage in various activities will appeal to those who may otherwise opt for Airbnb.
Our research also reveals that there is not much consumer support for the route followed by hospitality lobby groups like the BHA: Airbnb’s success does not seem to stem from the fact that the market for room-rental services is currently deregulated. Rather, it seems to stem from innovation and making a bet on a new type of accommodation provision that is paying off.
Links to previous Airbnb Market Research
Our previous blogposts about Airbnb are published on our website. For an analysis of…
who is aware of Airbnb and who is more likely to use it, click here.
why travellers would use Airbnb in the first place, click here.