Marketing Dissertation Proposal Sample

Airbnb is an online rental service that allows travellers to book and list accommodation through a mobile application and website. The exponential growth of Airbnb is based on increase in number of listing and number of users. The company claims to have more than 20 million users and every month one million users experience the service of Airbnb. According to Wang and Nicolau (2017), it is estimated that approximately 14% of Airbnb’s users are currently active. As stated by Priporas et al. (2017), Airbnb had an approximately 425,000 users per night in 2015, which was 22% higher than Hilton across the globe.  In this regard, Airbnb is posing negative influence on hotel industry with an exponential growth in listings.

            Moreover, Quattrone et al. (2016) stated that through the stimulating effect of sharing economy, Airbnb has been established as a leading peer-to-peer model in the hotel industry and it is projected that Airbnb will usurp the position of largest hotel chain of the world. The development of Airbnb has allowed people to make use of free local spaces through fee-based sharing. As stated by Forgacs and Dimanche (2016), drivers that allow Airbnb to influence users towards the sharing accommodation service are economic crisis and technology and the rapid growth of booking through Airbnb is affecting revenues of local hotels and lodges.

            In addition, Gibbs et al. (2018) stated that the rapid growth of Airbnb also affecting the customer behaviour in the hospitality industry. Most of the people experiencing sharing consumption are between the age group of 19 to 35 years. Customers of this group perceive that sharing consumption through Airbnb is a convenient method to book accommodation in reasonable price. In this regard, Kathan, Matzler, and Veider (2016) stated that the online presence and price feasibility are two major drivers that influence customer behaviour in the hospitality industry. With the advent of technology, customers become able to book their accommodations online before arrival and make their travel experience smooth and pleasant. Furthermore, Oskam and Boswijk (2016) stated that the 52% of population in UK are users of Airbnb, in which, 29% of users are loyal customers of Airbnb, while 48% have never experience Airbnb. In relation to the customers’ reviews regarding Airbnb, it is stated that 95% of customers have rated Airbnb between 4.5 and 5 stars. This indicates that the customers have trust on the service of Airbnb on the basis of online reviews. However, Bridges and Vásquez (2018) stated that the accuracy of Airbnb’s rating has been criticised as most of listed accommodation places have never rented and 22% of customers rebook the same accommodation properties.

            According to Sthapit and Jiménez-Barreto (2018), two major factors that influence customers to use Airbnb include convenience and good value for money. Furthermore, price is the most important factor that travellers consider while booking accommodation via Airbnb as 46% of respondents are likely to experience budget travel. With respect to this, Teubner, Hawlitschek, and Dann (2017) stated that the renting an accommodation through Airbnb is cheaper than traditional hotels in the UK and save 49% of the cost. Moreover, it is also stated that the convenience is also a major factor that motivate customers to choose Airbnb for benefiting from local atmospheres and use of home appliance, Wi-Fi, breakfast, and gym service. Additionally, leisure customers prefer to experience a convenient location, non-smoking accommodation, and swimming pool. However, Varma et al. (2016) stated that leisure customers also declared that they are likely to choose a hotel instead of Airbnb if they can get accommodation on discounted price through a loyalty program.

            A study conducted by Guttentag et al. (2018) also emphasised that the local experiences such as communication with neighbours and host also influence customer behaviour in the hotel industry of UK. Customers of Airbnb choose this service because of experiencing the local atmosphere closely and interact with locals and chatted with them for making the journey memorable and pleasant. Additionally, So, H. and Min (2018) stated that the value and competitiveness of Airbnb also posing threats to the traditional hotels. Traditional hotels are facing pricing pressures from the accommodation service of Airbnb and forced several hotels to set lower prices for accommodation during high-demand season in order to ensure occupancy. These findings are supported by the study of Guttentag (2015) which indicated that the Airbnb is flexible to the price adjustment during peak times, therefore limiting the competitive pricing strategies of hotels. Conversely, Airbnb is also changing the attitudes and preferences of customers towards the traditional hotels and tourists have reduced their possibility of staying in local hotels by 40% to 79%. In addition, Guttentag (2015) stated that the Airbnb has significant impact on hotel industry as Airbnb has some security issues that influence customers to choose hotels for safe accommodation instead of sharing economy via Airbnb.