The sharing economy has risen rapidly across the globe, and Airbnb has become a compelling example in this area. The sharing economy demonstrates new opportunities for people to leverage resources and makes it possible for them to deal with one another directly. Airbnb is more than just a company that provides housing services in Australia; it is a platform that connects communities, encourages sustainable tourism, and enhances economic prospects. However, the rise of Airbnb has also had an effect on the property market, which has sparked debate about the possibility that conventional businesses could be replaced and about the need to comply with regulatory standards. This article will dig into the role that Airbnb plays in the sharing economy as well as the part it plays in Australia.
Sharing Economy Shows New Possibilities
The sharing economy opens up new opportunities and makes everyone a potential micro-entrepreneur. (John, 2016) Airbnb is a platform that enables individuals to convert their homes into potential economic assets for themselves and others. Everyone has the opportunity to participate in the sharing economy, regardless of whether they choose to rent out their entire home or just an underused bedroom.
Individuals have the ability to attract tourists by capitalizing on their one-of-a-kind resources, such as their one-of-a-kind houses, the culture and landscape of a city, or even particular themed housing experiences, through the use of Airbnb. Airbnb created Barbie-themed accommodations following the debut of the Barbie film. This new economic model not only brought in additional cash, but it also stoked the flames of creativity and entrepreneurial spirit. People started pondering ways to develop one-of-a-kind lodging experiences in order to entice a greater number of tourists.
Airbnb provides residents of Australia with the chance to generate income from their assets. In the year 2021, the median salary for Airbnb hosts in Australia is estimated to be $11,464. Airbnb gives residents of Australia the opportunity to earn additional income while simultaneously fostering economic variety and links between communities via the sharing of their distinctive homes.
Peer-to-peer Trading Model
A peer-to-peer transaction model is created as a result of the sharing economy, which enables individuals to engage in direct commerce with one another, without the need for the participation of conventional middlemen. (John, 2016) This paradigm makes it possible to connect those who have resources with those who are in need of those resources in a way that is more flexible and efficient. (John, 2016) This model has provided a solid foundation for Airbnb’s success.
On the platform that Airbnb provides, hosts and renters are able to communicate with one another in a direct manner, eliminating the need for traditional hotel booking middlemen. This disintermediated strategy dramatically reduces transaction costs, allowing hosts to offer more competitive rates, while providing tenants with more affordable accommodation options. Travelers prefer to book directly with independent hosts on Airbnb rather than through agent websites.
The rating system and communication tools provided by Airbnb assist in the development of trust and interaction between guests and hosts. Renters have the ability to check what other people are saying about hosts and listings, and Airbnb encourages both guests and hosts to submit honest reviews, which helps to develop trust in the platform.
The peer-to-peer transaction paradigm that Airbnb uses enables individuals to transact more directly with one another, which not only lowers prices but also enhances the amount of flexibility available. The success of this approach serves as an example of a sharing economy, which is an economic model that encourages individuals to actively engage and share the resources they have.
The Complicated Impact of the Rise of Airbnb
However, the rise of Airbnb has caused the traditional hotel industry to face increased levels of competitive pressure and has also had an effect on the market for long-term rentals. (Nieuwland & van Melik, 2020) Some people are concerned that Airbnb could one day replace the conventional hotel business, which would wreak havoc on the tourism and hospitality industries. This has sparked debates regarding the level of competition in the industry as well as its long-term viability.
The success of Airbnb has, to some degree, increased the amount of competitive pressure that is placed on the conventional hospitality business. This is due to the fact that tenants now have more options available to them, including individual homes on Airbnb. Airbnb has contributed to a decrease in the number of people staying in hotels and other types of lodgings.
Airbnb has also had an effect on the market for long-term rental accommodations. It’s possible that some landlords would prefer to use their properties for short-term rentals rather than long-term rentals because the former can result in greater income from the latter. This could result in a decline in the supply of long term rentals in some locations, leading to a shortage of housing and presenting some issues for the rental market.
The meteoric rise of Airbnb has spurred a wide-ranging discussion regarding the market’s competition and sustainability, as well as the necessity of striking a balance between the two in order to ensure that the sharing economy will continue to expand without compromising the market’s ability to function normally.
Regulatory Compliance Issue
The growth of Airbnb has led to concerns regarding the company’s adherence to applicable regulations. (Nieuwland & van Melik, 2020) Because there is a need to strike a balance between the rights of inhabitants and the benefits of innovation, government and community control of the short-term rental market has become more complicated.
A number of cities, including Melbourne, have taken measures to regulate Airbnb’s effect on their communities. Among these are a restriction on the number of rental days, the imposition of additional taxes and fees, and the requirement of registration and licensing. These restrictions are intended to maintain stability in the housing market and reduce the risk of rent increases.
Concurrently, these regulatory initiatives have prompted dispute on the degree to which markets should be free from regulatory involvement. While some contend that government should minimize market interference and promote competition and innovation, others contend that government must defend citizens’ rights, especially when it comes to housing.
To ensure that the expansion of the sharing economy does not create an unnecessary strain on society, regulatory regulations ought to be formulated with innovation and the rights of residents as primary considerations.
Airbnb and Market Diversity
It is worth pointing out that Airbnb is not only a rival to the established sector but also a contributor to the expansion of variety and innovation within the market.
Airbnb gives travellers the opportunity to choose from a variety of one-of-a-kind lodging experiences. Many vacationers look for unique and out-of-the-ordinary hotel options, such as sleeping in treehouses, coastal cottages, historic buildings, or rustic cabins. This diversity enhances the quality of the travel experience and encourages more people to travel and discover.
Airbnb has implemented a variety of policies and procedures, with the goal of ensuring that shared listings adhere to all applicable laws and standards. This serves to develop confidence in the sharing economy and protects the rights of both hosts and tenants, in addition to providing regulation and transparency within the industry.
The existence of Airbnb contributes to an increase in the variety of offerings available on the market, and the current model of coexistence and collaboration will continue to have a significant impact on the hospitality industry. As a result, vacationers will have access to more options and have a more positive experience.
The emergence of Airbnb in Australia is evidence of the promise of the sharing economy. It creates new income options for locals and fosters community connections. However, it also presents concerns in terms of the possible displacement of conventional sectors and the need to comply with regulatory requirements. In the age of the sharing economy, striking a balance between innovation and regulation will be a persistent struggle. However, striking this balance will be what ensures the success of the sharing economy in Australia. At the same time, conventional industries still have a chance to identify opportunities in this developing market, and regulatory compliance will need to foster innovation while also preserving the public interest. The sharing economy will continue to have an impact on the business and social landscape of Australia, and it will be necessary for communities, corporations, and governments to collaborate in order to reach a system in which everyone benefits.
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