The term “sharing economy” was initially introduced in Kao’s book (2007) “Innovation Nation”. The emergence of the sharing economy aligns seamlessly with the realms of social media and the online society, rapidly amplifying its influence. Consequently, the sharing economy is a product of the digital age (John, 2016, p. lxvi). With the progression of time, the development of the sharing economy has engendered a significant transformation in the realms of business and consumerism. This phenomenon disrupts conventional industries and modes of participation, catalyzing industries’ emergence around the sharing economy. Airbnb stands out as a prominent exemplar in this context, one of the pioneering companies to popularize the sharing economy (He & Svetec, 2020, Chapter 1). The advent of Airbnb has reconfigured the landscape of the hotel industry and expeditiously propelled the growth of the sharing economy. However, concerns have been raised regarding Airbnb’s impact on government taxation and potential adverse effects on the real estate market. Hence, this paper shall delve into the utilization and influence of Airbnb within the sharing economy and analyze how it challenges the traditional hotel industry while substantiating its enduring significance in the contemporary market.


Sharing economy

What is the sharing economy? – YouTube

The term “sharing” signifies the transmission of one’s internal state to others and encapsulates an ideal within human intimate relationships (John, 2016, p. lviii). With the progression of time, the concept of “sharing” has begun to surface in the context of digital culture. The term “sharing” signifies the transmission of one’s internal state to others and encapsulates an ideal within human intimate relationships (John, 2016, p. lviii). With the progression of time, the concept of “sharing” has begun to surface in the context of digital culture. This company functions like a marketplace, enabling individuals to rent out their unused dwellings to travellers. The rapid expansion of the internet since the 1980s has catalyzed a burgeoning desire for resource sharing among individuals and concurrently facilitated trust-building among peers, thus propelling the development of the sharing economy. Consequently, the sharing economy garnered initial attention within both traditional and social media platforms (Geissinger, 2016, Chapter 2). This surge in the sharing economy has engendered a profound wave of transformation within business and consumerism.


Airbnb” by Open Grid Scheduler / Grid Engine is marked with CC0 1.0

Airbnb, in particular, has emerged as a pivotal player in this market (He & Svetec, 2020, Chapter 1), empowering individuals to lease their underutilized residential properties to travellers. These platforms serve as conduits for individuals to share their resources, skills, and services. The ascendance of Airbnb has also precipitated a paradigm shift in consumer preferences, with individuals increasingly favoring personalized lodgings over the standardized accommodations offered by conventional hotels.

Airbnb and Sharing Economy Analysis

Airbnb – The Sharing Economy – YouTube

Scalability in the Airbnb

The sharing economy establishes a novel economic system by facilitating the exchange of resources and services while reducing transaction costs, thereby enhancing resource abundance (Acquier et al., 2017, p.2). Consequently, the development of the sharing economy relies heavily on the impetus provided by platforms. Airbnb serves as an exemplary illustration of a sharing economy platform, reflecting this economic model’s scalability and distinctive characteristics. First and foremost, Airbnb leverages network effects to expand its influence. The development of the sharing economy is intricately linked to the advancement of the Internet. According to Geissinger (2020, p.155), numerous sectors within the sharing economy have garnered attention through both traditional and social media. Notably, Airbnb boasts 5,437,000 followers on Instagram, a platform with considerable influence in the sharing economy. With a substantial following, the Airbnb platform attracts a large clientele and a multitude of hosts, thereby offering an extensive range of lodging choices and rapidly increasing its overall value.

Furthermore, global reach is a testament to the scalability of the sharing economy. Airbnb consistently expands its international footprint. Airbnb hosts are available in over 220 countries and regions worldwide, achieving considerable success and generating substantial profits. For instance, Airbnb generated $3.3 billion in revenue in its domestic market, the United States, and $400 million in revenue in Australia. Notably, a significant portion of these earnings is derived from effectively utilising underutilized properties, signifying that Airbnb has achieved substantial profitability without requiring substantial capital investments. This exemplifies a crucial facet of the sharing economy’s scalability. Overall, as exemplified by Airbnb, the sharing economy demonstrates unprecedented scalability by harnessing network effects, benefiting from global reach, and effectively utilizing underutilized resources. This model is distinguished by its capacity to foster economic growth and abundance without excessive capital investment, contributing to the economic landscape in unique ways.

Share” by Got Credit is licensed under CC BY 2.0.

Features of Airbnb

In addition to effectively harnessing the scalability inherent in the sharing economy, Airbnb has developed many personalized and security-enhancing features in alignment with its brand identity. These features have precipitated significant shifts in consumer preferences, empowering them to select personalized lodging options. The salient characteristic of Airbnb is its peer-to-peer marketplace sales model, which unequivocally stands out as its most prominent and distinctive feature. This approach eradicates intermediaries, substantially reduces costs, and unequivocally embodies the essence of the sharing economy while significantly enhancing security. Notably, 95% of guests opt for Airbnb due to its emphasis on safety. Furthermore, Airbnb continually refines its personalized services within the platform through user ratings and qualitative assessments. This approach has successfully attracted the participation of the millennial generation, constituting 60% of Airbnb’s user base, in the sharing economy. Consequently, these strategic initiatives demonstrate Airbnb’s commitment to providing tailored experiences and ensuring the security of its users while simultaneously addressing the evolving needs and preferences of the modern consumer demographic.

Rise of the Sharing Economy: Airbnb Hurting Hotel Revenue – YouTube

Airbnb’s Impact on Traditional Hotels and Communities

Undeniably, Airbnb’s success has exerted a substantial impact on the traditional hotel industry. As the sharing economy continues to evolve rapidly, there is an increased likelihood of competitive turbulence in the traditional economy in the coming years (Geissinger, 2020, p.157). The influence of Airbnb has led to a 1% increase in community rental rates and a 6% surge in property prices (Hobbs, 2021, para.1). Furthermore, according to the U.S. Bureau of Labor Statistics, Airbnb has resulted in a 1.5% overall decrease in hotel revenue. However, Airbnb’s success has propelled a significant influx of tourist traffic and provided travellers with a more diverse range of choices. These encompass private rooms, entire apartments, and unconventional accommodations such as treehouses and houseboats. The diversity in accommodation options offers travellers a broader spectrum of choices to cater to their specific needs and preferences. Airbnb typically provides more budget-friendly alternatives than traditional hotels, which is a pivotal factor for cost-conscious travellers.

Admittedly, some critics argue that the sharing economy primarily caters to customers while neglecting the interests of property owners. While guests can find accommodations that suit their preferences, this does not necessarily entail a commitment to safeguard those lodgings. Safety concerns and community disruption arising from Airbnb rentals represent significant issues. However, in recent years, Airbnb has introduced new rating and screening policies. Hosts have the autonomy to establish their own rules, and government authorities can access guest profiles (He & Svetec, 2020, Chapter 7). This policy framework effectively mitigates safety and community disruption concerns associated with rented accommodations. Besides, Airbnb has collaborated with government agencies to implement noise regulations and short-term rental guidelines aimed at addressing issues of community disruption.


In summary, this article has comprehensively examined the relationship between Airbnb and the sharing economy, presenting well-supported arguments for its positive economic impact. Additionally, the article acknowledges that the rise of Airbnb and the sharing economy is not without controversy, given the challenges and negative consequences it presents to the traditional hotel industry and local communities. However, it also highlights numerous benefits, such as fostering entrepreneurship, promoting community engagement, and diversifying travel experiences. As the sharing economy continues to evolve, the interplay of societal and regulatory forces drives the development of more comprehensive policies. Platforms at the core of the sharing economy, like Airbnb, are progressively improving, thereby continuing to impact the economic systems of various industries.

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