Task Description: CONTEXT There is a new wave of highly successful peer-to-peer accommodation models that are seriously disrupting the traditional international hotel market. Airbnb, for instance, was founded in August 2008 and is headquartered in San Francisco, California. The company has over 800,000 listings in 33,000 cities and 192 countries. Airbnb has usurped the InterContinental Hotels Group and Hilton Worldwide as the world’s largest hotel chain—without owning a single hotel.
The new entrants to the hospitality industry, such as Airbnb and others (e.g. HomeAway, Xiaozhu, and Couchsurfing), have reshaped the hotel business model and value chain. As Frank Kermarrec (Director of Commercial and Brand Portfolio Strategy at IHG) said, “the hotel industry will change dramatically. This is why Airbnb is a real chance for those big hotel corporations: it will force them to think, work and sell differently. Airbnb will force them to move from being only a good professional to becoming a great hotelier.”
Based on this background context, you are required to write an essay that:
i.) Describes the nature and characteristics of a selected peer-to-peer accommodation service; [10 %]
ii.) Analyses the fast development and market segmentation of your selected peer-to-peer accommodation service including both, demand and supply perspectives; [20 %]
iii.) Critically discusses the negative and positive impacts of these services on traditional hotels and customer’s choice of accommodation; [20 %]
iv.) Explore and provides recommendations how hoteliers can learn from peer-to-peer models using the example of one of the Accor Group’s Brisbane CBD hotels.
You are required to choose one of the properties that you have visited during the field trip and direct your recommendations towards this particular hotel. [30 % ]
iii.) Critically discusses the negative and positive impacts of these services on traditional hotels and customer’s choice of accommodation;
iv.) Explore and provides recommendations how hoteliers can learn from peer-to-peer models using the example of one of the Accor Group’s Brisbane CBD hotels.
You are required to choose one of the properties that you have visited during the field trip and direct your recommendations towards this particular hotel.
Pullman Brisbane king gorge square
1.1. Choose a peer-to-peer accommodation service.
1.2. Describe the nature and characteristics of that service.
- MARKET SEGMENTATION:
Allows you to target and market to a variety of consumer groups with different behaviour with an offer that matches their needs and budget level.
Your hotel market segmentation shall help to identify the purpose of the trip: either business or leisure.
- Demand & supply:
- Critically discuss
Does not mean criticise. It requires a balanced answer that points out mistakes or weaknesses and indicates any favourable aspects of the subject of the question. The decision or overall judgment you make must be supported with evidence from reliable sources.
4.1. Impacts [Positive & Negative] of the peer-peer to
– Traditional hotels AND on customers choice of
- ***Explore & provide recommendations**
5.1. Practical & Realistic application to hotel. Sensible.
5.2. Demonstrate knowledge and understanding of the dynamics of this real-world case.
5.3. Recommendations are evidence-based supported by analysis of credible literature
Change and Innovation in the Hotel Industry
The advent of technology, especially new internet programs, has revolutionized many industries, and the hotel industry is no exception. According to Dén-Nagy and Király (2014), the internet has not only facilitated effective communication and interactivity, but also has enabled collaboration and finalization of transactions. Technology has ensured that the idea of peer-to-peer accommodation is possible as, through social network platforms, homeowners and those in need of accommodation have communicated. In specific, Mody, Suess, and Lehto (2017) assert that peer-to-peer accommodation sees people (house owners) make their vacant rooms available for other persons for a short stay. It is part of a collaborative consumption exercise supported and promoted by platforms such as Airbnb, HomeAway, 9flats and even Xiaozhu. The hotel and tourism industries have benefited from this model of accommodation by ensuring that thousands of rooms (accommodations) can be activated by the click of a button (Chen, 2018). The broad expansion of accommodation using the peer-to-peer accommodation networks has solved the problem of high demand for accommodation which has traditionally not been matched with supply, especially during the festive seasons. This paper seeks to examine Couchsurfing peer-to-peer accommodation services including its fast development and market segmentation. The impact of peer-to-peer accommodation to traditional hotels and the customers’ choice of accommodation will also be discussed. Finally, recommendations will be provided on how one of the Accor Group’s Brisbane CBD hotels model can be used by hoteliers.
- Nature and Characteristics of Selected Peer-To-Peer Accommodation Service
- Chosen Peer-To-Peer Accommodation Service
The peer-peer-accommodation service selected for this paper is CouchSurfing, both hospitality and social networking platform which can be accessed through a mobile app or a website. The service was started in 2014 by Casey Fenton, Daniel Hoffer, Sebastian Le Tuan, and Leonardo Bassani da Silveira, as the founders (Couchsurfing.com, 2019). The idea originated from an email which was sent to a group of students in Iceland who wanted to share their homes with strangers. The hospitality and accommodation services in the platform ensure that those who want to share their homes with strangers can list the availability of their rooms while those looking for places to stay can use the platform to book (Chen, 2018). CouchSurfing provides free hospitality as the couchsurfers believe that guests should not be asked to pay for their lodgings, but rather just a demonstration of appreciation through actions such as taking the host out, bringing gifts, and some of the gestures which would be signs of appreciation and not compensation for the stay (Dén-Nagy & Király, 2014). CouchSurfing is different from other platforms such as Airbnb and HomeAway who provide hospitality services for a fee. CouchSurfing serves to connect members in the global community to a wide range of travelers.
- Nature and Features of The Service
CouchSurfing hospitality and accommodation services are free. In specific, the guests do not need to pay anything to the homeowners who have welcomed them. On the contrary, they only appreciate the hospitality of the host. CouchSurfing has more than 1.4 million people across more than 200,000 cities around the world (Couchsurfing.com, 2019). The accommodation services provided by the platform ensures that travelers are connected with homeowners in their destinations to share their experiences in both profound and meaningful ways and hence ensure a social experience (Tussyadiah & Zach, 2017). Couchsurfers not only share their life experiences with the people that they encounter, but also foster cultural exchange and mutual respect. Regular events are also organized by couchsurfers in over the 200,000 cities around the world. As such, according to Chen (2018), in the platform, there are always new friends to meet as well something to do which then facilitates a rich cultural exchange between the locals/hosts and the guests. To become a couchsurfer, prospective members are supposed to pay a lifetime verification fee of $60 which is only paid once with no future charges and subscriptions. Some of the features of the hospitality service provided by CouchSurfing include free services, good hospitality, and rich cultural exchanges (Dén-Nagy & Király, 2014). However, since the hospitality services are free, then the visitors might not understand the nature of the homes that they will be accommodated for the length of their stay.
- Fast Development and Market Segmentation
- Market Segmentation
The hospitality industry has been one of the fastest growing sector with a huge chunk of customers in the industry preferring peer-to-peer accommodation. CouchSurfing is preferred by both individuals and families who need to get a new experience from the traditional hotels which are sometimes lonely and do not provide room for intercultural exchange (Tussyadiah & Pesonen, 2016). In specific, the market for CouchSurfing is for those millennials whose main aim is not just to travel, but also to interact with people from different cultures (Pentescu, 2016). Such people want a homely place to stay where they can relate with their hosts and engage in a variety of cross-cultural exchange activities. Additionally, the market for the services of CouchSurfing consists of people who travel as families with the aim of ensuring that they learn new culture and expand their global network. As such, the customers for the services are not just guests, but rather travelers who want to have fun in new cultures and surroundings (Dén-Nagy & Király, 2014). Furthermore, the service is sought by individual travelers who can hardly afford in a 5-star hotel. Since CouchSurfing provides free accommodation, then such people would rather stay in cheaper accommodation as opposed to high-end hotels which would not provide the kind of experience realized through peer-to-peer accommodation. The millennials would also prefer the services from CouchSurfing based on the fact that they will get to make new friends, know local people, and improve on their foreign languages (Chen, 2018). The market segmentation of CouchSurfing is thus determined by the need to experience a new culture and budgetary implications.
- Demand and Supply Perspectives
The demand for CouchSurfing services has grown since it was discovered in 2004. Information in 2018 shows that CouchSurfing has 15 million users as well as 4 million surfers per year. Additionally, in the same year, the CouchSurfing service attracted 400,000 hosts. Such statistics are improved from the previous two years as, in 2016, the platform had only 11 million users. There are millions of people around the world who want to share their culture and thoughts with others. CouchSurfing services are demanded by people of all ages including children, the youth and the elderly. In specific, Dén-Nagy and Király (2014) argue that single people as well as couples and even families demand the free accommodation and hospitality provided by the platform. The jobs for those using the platform range from the employed to students. For families with more than five children, CouchSurfing is a great platform where the parents can teach their children aspects of hospitality, respect, cultural differences, religious differences, and even differences in languages. The users of the service require accommodation services from one day to even 10 days. Tussyadiah and Pesonen (2016) add that demand for the accommodation services can come from people with different political views, religious beliefs, and varying lifestyles. The accommodation services are provided by families who have extra rooms in their homes or even single people want company. Hosts and guest requiring friendships and cultural exchange are mostly those in demand for the peer-to-peer accommodation offered in CouchSurfing (Chen, 2018).
- Negative and Positive Impacts of These Services
- Impact on Traditional Hotels
The fast growth and development of the peer-to-peer accommodation has had various positive and negative effects on the traditional hotels. According to Dell et al. (2017), one of the negative impacts is that it has resulted in a decrease in the occupancy rates in the traditional hotels. As such, the profitability of traditional hotels has decreased because of a decrease in the number of visitors/guests. The other negative impact of peer-to-peer accommodation services is that they have led to traditional hotels lowering the costs of their services which has seen their profits dwindle (Håvardsholm, 2016). To compete with the homeowners who have extra rooms that they want to provide to guests, hotels have been much more focused not only on the provision of high-quality services but also on offering accommodation and hospitality costs which are affordable to their visitors (Dell et al., 2017). Notably, one of the reasons for the high number of CouchSurfing users is the fact that members have to pay a prescription once and then get free accommodation from homeowners. As such, traditional hotels have been engaged in a marathon of competing with such technology which caught them by surprise. Despite those negative impacts; however, the peer-to-peer accommodation services have; somehow, been beneficial to traditional hotels (Dén-Nagy & Király, 2014). One of the positive impacts is that they have provided platforms from where the hotels can provide their customers with the number of available rooms and services. As such, it has become easy for traditional hotels to communicate with their customers in terms of the services they offer and the availability of rooms. However, such a positive impact does not override the fact that the peer-to-peer accommodation services have revolutionized and negatively impacted the traditional hotels.
- Impact on Customer’s Choice of Accommodation
One of the areas that the peer-to-peer accommodation services have impacted most is on the customers; especially on their choice of accommodation. One of the negative impacts of the shared economy form of accommodation is that customers are unable to correctly discern the type of homes that they will stay as well as the people that they will stay with (Richard & Cleveland, 2016). Additionally, peer-to-peer accommodation has been negative to customer choice of accommodation as it has led to low-quality accommodation services especially in CouchSurfing whereby the services provided are free. However, despite those negative effects, the peer-to-peer accommodation has generally had positive impacts on the customer’s choice of accommodation. Tussyadiah and Pesonen (2016) assert that customers have now been able to easily choose between a wide variety of accommodations. In specific, they can now choose between using the homes from their peers or the hotels. Based on the nature of accommodation that they desire and the reason for their travels, customers have an option to either stay in the expensive and lonely hotels or the warm, friendly, and cheap accommodations provided by private homeowners (Dén-Nagy & Király, 2014). A great deal of satisfaction for the customers is the other positive impact of the peer-to-peer accommodation. In specific, through activities such as cultural changes, customers gain a positive experience and thus benefit immensely from the shared accommodation (Decrop et al., 2018). As a result, peer-to-peer accommodation has generally had positive impacts on the customer’s choice of accommodation.
- Recommendations for Hoteliers
Based on the examination of the various positive and negative impacts of peer-to-peer accommodations on both the customers and traditional hotels, a need arises for the hotels to adopt innovations in the quest to stay afloat in the extremely competitive market in the hotel industry. Upon visiting Pullman Brisbane King Gorge Square, the hotel can take various lessons for the peer-to-peer accommodation models and platforms. One of the lessons is that they should contract professional and flexible sellers who would offer the hotel’s differentiated products to the consumers (Zhu, So, & Hudson, 2017). In specific, the company should enlist its services to various peer-to-peer platforms such as Airbnb as well as HomeAway where the platforms will enable the customers to know the daily prices and availability and thus make an informed decision (Farronato & Fradkin, 2018). One of the important aspects of peer-peer-accommodation is that it provides an opportunity for the customers to choose whether they want to be in hotels or in homes where they can interact. As such, Pullman Brisbane King Gorge Square should ensure that its services and products are listed with professional and flexible sellers so that through the various social media applications, prospective customers will seem them.
Hoteliers such as Pullman Brisbane King Gorge Square should provide a different experience to their customers by partnering with homeowners so that they can attract a wide range of customers. Since most of the customers; especially the youth and millennials, prefer the peer-to-peer accommodation, the hotel should not shy away from collaborating with homeowners so that they can direct customers to such homes especially if they do not want to stay in the hotels (Dell et al., 2017). One of the lessons from the peer-to-peer accommodation models is that travelers and tourists are increasingly looking for accommodation in areas where they can make new friends, interact, and even exchange their cultures and languages. As a result, hoteliers have to change their tact and move to satisfy the changing needs of the customers (Young, Corsun, & Xie, 2017). Being able to provide accommodation in homes through beneficial partnerships can make Pullman Brisbane King Gorge Square not only increase profitability from customers who stay in the hotels but also provide accommodation from homeowners similar to the ones provided by the peer-to-peer models. Chen (2018) argues that it is not enough for hoteliers to provide quality services to the customers, they ought to provide the best experiences to their visitors as opposed to the lonely life that most of the customer lead in the traditional hotels.
Pullman Brisbane king gorge square should learn from the peer-to-peer accommodation models that customers require the prices of accommodation to be reduced. In specific, one of the reasons for the high demand for services in CouchSurfing is the fact that the hospitality and accommodation provided by the homeowners are free (Håvardsholm, 2016). The guests are only expected to show appreciation to their hosts. Hoteliers should thus deploy a similar model where customers can prescribe and then be provided with an opportunity to explore the culture of others without having to pay the exorbitant prices charged by the 5-star hotels (Farronato & Fradkin, 2018). Opportunities should also be introduced in Pullman Brisbane King Gorge Square where customers can comfortably stay with their families and be taken to areas where they can interact, make friends, and even exchange their cultures. Traditional hotels should not dwell on mechanisms which do not match with the changing customer’s tastes and preferences. Based on the peer-to-peer review accommodation models, providing customers with opportunities for interaction will be vital for their success.
In conclusion, peer-to-peer accommodation models have revolutionized the hotel industry considering that customers can now get accommodation services from homeowners. One of the platforms from where hospitality and accommodation services are provided is CouchSurfing. In this platform, when users have prescribed, they can visit different cities around the world and get accommodation from their peers who are homeowners with extra rooms for free. Such a platform has a high demand from people of all ages, but most importantly, the youth and millennials. Although peer-to-peer accommodation has provided a platform from where traditional hotels can enlist their services for the customers, it has reduced the occupancy rates of traditional hotels. However, the model has been positive for the customers as it has provided them with a platform to choose accommodation services which match their preferences. As such, hoteliers should consider partnering with private homeowners in the quest to ensure that they provide customers with an environment where they can interact and exchange their cultures.
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