Sharing economy – Airbnb and traditional industries

     The Impact of the Sharing Economy in Airbnb on Traditional Industries


Innovation and tradition coexist in the ever-changing sharing economy. Airbnb, a pioneer in the sharing economy, has had a major impact on traditional hotels and accommodations.  As a technology, travel, and lodging company, Airbnb’s emergence has spurred discussion over its transformative influence. This paper critically examines Airbnb’s multifaceted influence on conventional sectors, including its benefits and drawbacks.

The rise of the sharing economy

The sharing economy, also known as the collaborative economy, is a socioeconomic system based on shared resources and services made possible by technological platforms. It is distinguished by the peer-to-peer exchange of commodities, services, or assets, which is frequently on a transitory basis. Decentralized networks, direct consumer-to-consumer interactions, and an emphasis on access over ownership are key components (Geissinger, Laurell & Sandström, 2020). Examples include ride-sharing businesses such as Uber and accommodation-sharing platforms such as Airbnb.

Overview of sharing economy

Source: (Narasimhan, 2020).

The principle of sharing resources extends back millennia, but the modern sharing economy has evolved quickly as a result of technology improvements. Smartphone proliferation, along with the increase of social connectedness, has enabled efficient and broad sharing. This development has altered several sectors, upending old consumption and trade structures (Li & Srinivasan, 2019). Among the early adopters of the sharing economy, Airbnb stands out as a game changer in the lodging industry. Airbnb pioneered a platform where homeowners could rent out their homes or spare rooms to tourists seeking unique and personalized accommodation experiences when it launched in 2008. Airbnb’s success exemplifies the sharing economy’s potential to harness underutilized assets and give a more customized alternative to traditional services. Airbnb has developed at an exponential rate over the years, increasing its global presence and upsetting existing hospitality sector practices (Geissinger, Laurell & Sandström, 2020). Its influence goes beyond economics, impacting how people see travel, hospitality, and the concept of community sharing itself. As we dive more into the implications of Airbnb’s rise, it becomes clear that the company’s disruptive effect presents both possibilities and difficulties for established sectors.

Airbnb’s expansion and market dominance

Airbnb’s spectacular ascent has brought it to the forefront of the hospitality sector, posing a challenge to established lodging patterns. Airbnb has reached a degree of worldwide expansion previously unmatched in the hospitality business, with a presence in over 220 countries and territories (Geissinger, Laurell & Sandström, 2020). Its platform, which is distinguished by user-friendly interfaces and a diverse range of offers, has established a new paradigm in travel lodging.

Airbnb revenue growth

Source: (Strandell, 2023).

The economic consequences of Airbnb’s success resonate across traditional hotels and lodging businesses. Traditional hotels, long dominating players, are now up against a powerful competition that works on a decentralized approach, frequently providing more cheap and diversified accommodation alternatives (Li & Srinivasan, 2019). As a result, hotels are finding it difficult to sustain occupancy rates and average room costs. According to studies, Airbnb has reduced hotel income and profitability in various countries. This economic transformation necessitates a critical analysis of how the hospitality sector adjusts to the shifting dynamics brought about by the sharing economy, notably Airbnb’s novel approach to housing.

Economic and social benefits of Airbnb

One of Airbnb’s most notable benefits is its capacity to create economic possibilities for people all around the world. The website has given hosts the ability to monetize their unused living areas. As a result, a sharing economy workforce has emerged, in which hosts may supplement their income by receiving visitors. The flexibility of Airbnb hosting allows users to overcome economic uncertainty, which contributes to a sense of financial stability. Airbnb has democratized travel by providing lodging options other than traditional hotels (Li & Srinivasan, 2019). Travelers may now find low-cost accommodations ranging from spare rooms in residential neighborhoods to complete flats or unusual, eccentric venues. This increased variety of options enables budget-conscious tourists to experience countries without sacrificing the quality of their stay. This democratization of housing is consistent with the spirit of the sharing economy, which emphasizes accessibility and inclusion. Airbnb emphasizes a more immersive and culturally enriching vacation experience than just lodging. The site encourages hosts to offer local knowledge, identify hidden treasures, and add customized touches, creating a bond between tourists and the places they visit (Li & Srinivasan, 2019). This emphasis on authenticity and local experiences promotes a more in-depth investigation of locations, challenging the formulaic experiences provided by traditional hotels. As a result, Airbnb is catalyzing a shift in travel tastes, preferring one-of-a-kind interactions and cultural immersion over traditional and homogenized tourism experiences.

Criticism and challenges faced by Airbnb

Globally, Airbnb has encountered recurring regulatory obstacles and legal disputes. Critics claim that the platform disrupts housing markets and enters regulatory gray areas since hosts may not comply to the same norms and laws as traditional lodging (Gyódi, 2017). Cities and governments struggle to create frameworks that combine innovation with consumer protection, zoning restrictions, and taxation. The fast growth of Airbnb has raised worries about the influence it will have on local property markets. Some critics argue that the platform adds to housing shortages in prominent tourist locations by converting residences into profitable short-term rentals. This can cause housing costs to rise, making it difficult for residents to locate affordable accommodation. Gentrification and displacement of local populations that arise offer complicated issues for urban planners and politicians (Geissinger, Laurell & Sandström, 2020). Airbnb has been under criticism for failing to ensure the safety and security of its customers. Instances of fake listings, property misrepresentation, and, in rare circumstances, safety issues have cast doubt on the platform’s capacity to provide a secure and dependable service. Balancing the platform’s openness with the need for rigorous safety measures remains a constant problem for Airbnb, necessitating regular efforts to increase user confidence and prevent possible hazards.

Counter arguments

Addressing Job Displacement Concerns in Traditional Industries

Many critics say that Airbnb’s growth leads to employment displacement in the traditional hotel industry. However, a more in-depth examination finds that Airbnb works alongside, rather than in direct rivalry with, established lodging providers (Zervas, Proserpio & Byers, 2017). Rather than displacing workers, the platform has generated new chances for them to participate in the sharing economy. To remain competitive, traditional hotels might embrace parts of the sharing economy, such as adding local experiences into their offers or diversifying services.

Analyzing Regulatory Issues and Advising on Solutions

The regulatory issues that Airbnb faces are recognized, and it is critical to understand that the sharing economy need a legal framework that is compatible with its distinct characteristics. Regulations should focus on guaranteeing fair competition, preserving consumer rights, and addressing concerns about housing shortages rather than limiting innovation (Zervas, Proserpio & Byers, 2017). Policymakers, industry stakeholders, and platforms like Airbnb may work together to create regulatory frameworks that balance innovation and responsibility.

Emphasizing the Possibility of Collaboration between Airbnb and Traditional Sectors

Rather than perceiving Airbnb and established industries as competitors, there is considerable opportunity for collaboration. Traditional lodging may benefit from the sharing economy’s virtues by adopting a collaborative approach (Zervas, Proserpio & Byers, 2017). This might include collaborations in which established hotels advertise rooms on Airbnb and benefit from the platform’s large user base. This type of partnership develops a symbiotic connection, allowing both Airbnb and established sectors to prosper in a volatile and changing market. The idea is to find common ground and explore novel collaborations that benefit all stakeholders.


In conclusion, the history of Airbnb’s rise develops as one of disruption and opportunity. While the platform has clearly transformed the hospitality business and improved travel experiences, it is not without controversy. The delicate balance between innovation and regulation continues to elude us, and the issues we face demand a collaborative and flexible approach. As the sharing economy evolves, the synthesis of Airbnb’s accomplishments and criticisms speaks to a future in which conventional and contemporary paradigms coexist. In this volatile environment, intelligent regulation, industry engagement, and a commitment to shared prosperity may pave the road for the smooth integration of new platforms such as Airbnb into the fabric of conventional industries.


Geissinger, A., Laurell, C., & Sandström, C. (2020). Digital Disruption beyond Uber and Airbnb—Tracking the long tail of the sharing economy. Technological Forecasting and Social Change155, 119323.

Gyódi, K. (2017). Airbnb and the hotel industry in Warsaw: an example of the sharing economy?. Central European Economic Journal2(49), 23-34.

Li, H., & Srinivasan, K. (2019). Competitive dynamics in the sharing economy: An analysis in the context of Airbnb and hotels. Marketing Science38(3), 365-391.

Narasimhan, C. (2020). Overview of the sharing economy. source: Business model toolbox …

Strandell, J. (2023, May 4). Sharing economy vs. online marketplaces: Key differences and opportunities. Besedo.

Zervas, G., Proserpio, D., & Byers, J. W. (2017). The rise of the sharing economy: Estimating the impact of Airbnb on the hotel industry. Journal of marketing research54(5), 687-705.