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Peer-to-peer travel: Blessing or blight?
International Journal of Hospitality Management 38 (2014) 118–119
Contents lists available at ScienceDirect
International Journal of Hospitality Management journal homepage: www.elsevier.com/locate/ijhosman
Editorial
Peer-to-peer travel: Blessing or blight?
One of the hottest trends in the tourism and hospitality industries that has the potential of becoming a mainstream phenomenon is peer-to-peer (P2P) travel. P2P is a byproduct of the sharing economy which is defined as “a sustainable economic system built around the sharing of human and physical assets. It includes the shared creation, production, distribution, trade and consumption of goods and services by different people and organizations” (Wikipedia, 2014b). In P2P, individuals transact directly with other individuals through an Internet platform maintained by a third party, to offer and purchase a variety of products and services including travel products and services such as accommodations, car rentals, food and drinks, and tour guiding. Peer-to-peer property rental is “the process whereby an existing house owner makes their house or an empty room available to others to rent for short periods of time as an alternative form of accommodation” (Wikipedia, 2014a). A simplified model of P2P property rentals has been in existence for many years under the terms “room rentals” or “vacation rentals.” In Europe, it has been known as “zimmer” which is a German word meaning “room.” The main difference between the P2P property rentals and the traditional room or vacation rentals is the involvement of a third party which is normally a website that brings the renters and the owners together. These websites go well beyond marketing and advertising the properties. They screen both parties, have access to the owners’ inventories, manage rental bookings, collect payments and provide some form of insurance coverage for damages caused by the renters. P2P property rentals are available to people needing temporary, non-traditional commercial accommodations such as hotels, motels, hostels, and timeshares. They are mostly used by mid-market and budget tourists who are seeking affordable accommodations in popular tourist attractions where the cost of traditional accommodations is beyond their means. At present, there are more than thirty P2P travel websites, a dozen of which are P2P rental websites that cater to the needs of this specialized market share. The most popular of the P2P rental websites are: (1) AirBnB.com – a website that connects moderate budget individuals, couples and professionals with owners of rooms, apartments, studios and cabins throughout the world, (2) CouchSurfing.com – an international non-profit network whose members share hospitality with each other at no cost, which means that the accommodations are free, (3) Crashpadder.com – a website that offers a variety of accommodations best suitable for moderate budget individuals, families and professionals (Buckzynski, 2014). In addition
http://dx.doi.org/10.1016/j.ijhm.2014.02.013 0278-4319/© 2014 Published by Elsevier Ltd.
to P2P property rental websites, there are numerous P2P travel websites that offer specialized shared services such as car rental and parking (i.e. www.zipcar.com; www.drivemaycarrentals.com; www.parkatmyhouse.com), eating (i.e. www.chowhound.com; www.foodspotting.com), tour guiding (www.vayable.com; www.sidetour.com; www.tripping.com), and camping in an owner’s private garden (www.campinmygarden.com). As indicated above, at present P2P travel sites, including property rental sites, are suitable and used mostly by mid-market and budget tourists. However this trend is slowly changing with the launch of such websites as ArchitectsHouseExchanges.com – a restricted online community of registered architects around the world that enables their members to swap homes for travel purposes – and PlateCulture.com that enables amateur chefs to host meals for paying guests in their homes. Based on the success of these, it is estimated that in the future there will be more and more sites suitable for high-end travelers as well (Pedro, 2014). The benefits to owners and renters are numerous but so are the pitfalls and risks. As far as benefits are concerned, most owners are involved in rentals because of the financial returns and the pleasure of meeting and interacting with guests from throughout the world. The renters benefit by being able to visit top tourist destinations where tourists’ lodging is prohibitively expensive and get the best inside information on places to visit or avoid, from the local owners. The risks to the owners are that even though the major websites screen the renters and provide damage guarantee to owners, the renters might still damage or vandalize their properties, and/or behave inappropriately and upset the owners’ families and neighbors. For the renters the risk of landing in a dingy, grimy and smelly lodging facility with lumpy mattresses and unwelcoming hosts is also significant despite the bright videos and the glaring reviews on the websites (Ball, 2013). Given the growth and success of this new phenomenon can one suggest that it will continue to flourish and become a mainstream in the hospitality and tourism industries? And more importantly, is it a blessing or blight for the traditional hospitality and tourism establishments and the travel consumers? The evidence presented thus far suggests mixed results. On the one hand some traditional travel and accommodation companies fear the existence of P2P travel and want to abolish it. They managed to persuade state legislators in New York City to ban short-term rentals and lobbied the city of San Francisco to sue FlightCar.com for operating an off-airport car rental service without a license. Their claim is that P2P travel operators are avoiding taxes and evading governmental regulations that
Editorial / International Journal of Hospitality Management 38 (2014) 118–119
are intended to protect the safety of travelers. To reinforce their argument they point to a recent fatality that occurred in a rental car provided by the P2P car rental services RelayRides.com (Elliott, 2014). But on the other hand, some traditional travel companies decided that “if you can’t fight them – join them” as is suggested by the recent acquisition of the car sharing service Zipcar.com by Avis and TripAdvisor’s acquisition of FlipKey.com in 2008 (Fox, 2013). From the consumers’ point of view, the data so far show strong support for the existence of these services. For the most part consumers are benefiting from lower prices, quality services and interpersonal relationships with the travel providers. As to the issue of tax avoidance, in October 2013 Brian Chesky the CEO of AirBnb.com agreed that rental hosts should pay some tax (O’Neill, 2013). Others will probably follow in his footsteps. Ultimately, the fate of the P2P travel services will lie in the hands of local, state and/or national governments. My personal opinion is that P2P travel services will not significantly damage the traditional tourism and hospitality industries and therefore they should not be feared or over-regulated to such an extent that they will not be able to survive. They ought to be perceived by everyone as a supplementary service that caters mostly to the needs of a currently unsatisfied market share and as such they will ultimately enlarge the proverbial tourism cake.
119
References Ball, A.L., 2013. T+L Assesses the Pros and Cons of Peer-to-Peer Travel, Social Media’s Latest Trend: Testing the Peer-to-Peer Travel Trend, Retrieved from: www.travelandleisure.com/articles/testing-the-peer-to-peer-travel-trend (16.02.14). Buckzynski, B., 2014. Top Five Travel-Sharing Websites, Retrieved from: www.shareable.net/blog/top-five-travel-sharing-websites (16.02.14). Elliott, C., 2014. Is Peer-to-Peer Travel Sharing for You?, Retrieved from: www.usatoday.com/story/travel/2013/09/30/christopher-elliott-peer-to-peertravel-sharing/2870611/ (16.02.14). Fox, L., 2013. Big Travel Companies Look to Muscle in on Peer-to-Peer Marketplaces, Retrieved from: www.tnooz.com/article/peer-to-peer-marketplaces-big-travel (16.02.14). O’Neill, S., 2013. AirBnb’s Brian Chesky Blinks, Finally Talks Taxes, Retrieved from: www.tnooz.com/article/airbnb-finally-agrees-talk-taxes/ (16.02.14). Pedro, L., 2014. Luxury Travel Trends: Building on Past Successes, Retrieved from: www.telegraph.co.uk/luxury/travel/21592/luxury-travel-trends-building-onpast-successes.html (16.02.14). Wikipedia, 2014a. Peer-to Peer Property Rental, Retrieved from: www.wikipedia.org/wiki/Peer-to-peer property rental (16.02.14). Wikipedia, 2014b. Sharing Economy, Retrieved from: www.wikipedia.org/ wiki/Sharing economy (16.0214).
Editor-in-Chief Abraham Pizam University of Central Florida, Orlando, Florida, USA
Contents lists available at ScienceDirect
International Journal of Hospitality Management journal homepage: www.elsevier.com/locate/ijhosman
Editorial
Peer-to-peer travel: Blessing or blight?
One of the hottest trends in the tourism and hospitality industries that has the potential of becoming a mainstream phenomenon is peer-to-peer (P2P) travel. P2P is a byproduct of the sharing economy which is defined as “a sustainable economic system built around the sharing of human and physical assets. It includes the shared creation, production, distribution, trade and consumption of goods and services by different people and organizations” (Wikipedia, 2014b). In P2P, individuals transact directly with other individuals through an Internet platform maintained by a third party, to offer and purchase a variety of products and services including travel products and services such as accommodations, car rentals, food and drinks, and tour guiding. Peer-to-peer property rental is “the process whereby an existing house owner makes their house or an empty room available to others to rent for short periods of time as an alternative form of accommodation” (Wikipedia, 2014a). A simplified model of P2P property rentals has been in existence for many years under the terms “room rentals” or “vacation rentals.” In Europe, it has been known as “zimmer” which is a German word meaning “room.” The main difference between the P2P property rentals and the traditional room or vacation rentals is the involvement of a third party which is normally a website that brings the renters and the owners together. These websites go well beyond marketing and advertising the properties. They screen both parties, have access to the owners’ inventories, manage rental bookings, collect payments and provide some form of insurance coverage for damages caused by the renters. P2P property rentals are available to people needing temporary, non-traditional commercial accommodations such as hotels, motels, hostels, and timeshares. They are mostly used by mid-market and budget tourists who are seeking affordable accommodations in popular tourist attractions where the cost of traditional accommodations is beyond their means. At present, there are more than thirty P2P travel websites, a dozen of which are P2P rental websites that cater to the needs of this specialized market share. The most popular of the P2P rental websites are: (1) AirBnB.com – a website that connects moderate budget individuals, couples and professionals with owners of rooms, apartments, studios and cabins throughout the world, (2) CouchSurfing.com – an international non-profit network whose members share hospitality with each other at no cost, which means that the accommodations are free, (3) Crashpadder.com – a website that offers a variety of accommodations best suitable for moderate budget individuals, families and professionals (Buckzynski, 2014). In addition
http://dx.doi.org/10.1016/j.ijhm.2014.02.013 0278-4319/© 2014 Published by Elsevier Ltd.
to P2P property rental websites, there are numerous P2P travel websites that offer specialized shared services such as car rental and parking (i.e. www.zipcar.com; www.drivemaycarrentals.com; www.parkatmyhouse.com), eating (i.e. www.chowhound.com; www.foodspotting.com), tour guiding (www.vayable.com; www.sidetour.com; www.tripping.com), and camping in an owner’s private garden (www.campinmygarden.com). As indicated above, at present P2P travel sites, including property rental sites, are suitable and used mostly by mid-market and budget tourists. However this trend is slowly changing with the launch of such websites as ArchitectsHouseExchanges.com – a restricted online community of registered architects around the world that enables their members to swap homes for travel purposes – and PlateCulture.com that enables amateur chefs to host meals for paying guests in their homes. Based on the success of these, it is estimated that in the future there will be more and more sites suitable for high-end travelers as well (Pedro, 2014). The benefits to owners and renters are numerous but so are the pitfalls and risks. As far as benefits are concerned, most owners are involved in rentals because of the financial returns and the pleasure of meeting and interacting with guests from throughout the world. The renters benefit by being able to visit top tourist destinations where tourists’ lodging is prohibitively expensive and get the best inside information on places to visit or avoid, from the local owners. The risks to the owners are that even though the major websites screen the renters and provide damage guarantee to owners, the renters might still damage or vandalize their properties, and/or behave inappropriately and upset the owners’ families and neighbors. For the renters the risk of landing in a dingy, grimy and smelly lodging facility with lumpy mattresses and unwelcoming hosts is also significant despite the bright videos and the glaring reviews on the websites (Ball, 2013). Given the growth and success of this new phenomenon can one suggest that it will continue to flourish and become a mainstream in the hospitality and tourism industries? And more importantly, is it a blessing or blight for the traditional hospitality and tourism establishments and the travel consumers? The evidence presented thus far suggests mixed results. On the one hand some traditional travel and accommodation companies fear the existence of P2P travel and want to abolish it. They managed to persuade state legislators in New York City to ban short-term rentals and lobbied the city of San Francisco to sue FlightCar.com for operating an off-airport car rental service without a license. Their claim is that P2P travel operators are avoiding taxes and evading governmental regulations that
Editorial / International Journal of Hospitality Management 38 (2014) 118–119
are intended to protect the safety of travelers. To reinforce their argument they point to a recent fatality that occurred in a rental car provided by the P2P car rental services RelayRides.com (Elliott, 2014). But on the other hand, some traditional travel companies decided that “if you can’t fight them – join them” as is suggested by the recent acquisition of the car sharing service Zipcar.com by Avis and TripAdvisor’s acquisition of FlipKey.com in 2008 (Fox, 2013). From the consumers’ point of view, the data so far show strong support for the existence of these services. For the most part consumers are benefiting from lower prices, quality services and interpersonal relationships with the travel providers. As to the issue of tax avoidance, in October 2013 Brian Chesky the CEO of AirBnb.com agreed that rental hosts should pay some tax (O’Neill, 2013). Others will probably follow in his footsteps. Ultimately, the fate of the P2P travel services will lie in the hands of local, state and/or national governments. My personal opinion is that P2P travel services will not significantly damage the traditional tourism and hospitality industries and therefore they should not be feared or over-regulated to such an extent that they will not be able to survive. They ought to be perceived by everyone as a supplementary service that caters mostly to the needs of a currently unsatisfied market share and as such they will ultimately enlarge the proverbial tourism cake.
119
References Ball, A.L., 2013. T+L Assesses the Pros and Cons of Peer-to-Peer Travel, Social Media’s Latest Trend: Testing the Peer-to-Peer Travel Trend, Retrieved from: www.travelandleisure.com/articles/testing-the-peer-to-peer-travel-trend (16.02.14). Buckzynski, B., 2014. Top Five Travel-Sharing Websites, Retrieved from: www.shareable.net/blog/top-five-travel-sharing-websites (16.02.14). Elliott, C., 2014. Is Peer-to-Peer Travel Sharing for You?, Retrieved from: www.usatoday.com/story/travel/2013/09/30/christopher-elliott-peer-to-peertravel-sharing/2870611/ (16.02.14). Fox, L., 2013. Big Travel Companies Look to Muscle in on Peer-to-Peer Marketplaces, Retrieved from: www.tnooz.com/article/peer-to-peer-marketplaces-big-travel (16.02.14). O’Neill, S., 2013. AirBnb’s Brian Chesky Blinks, Finally Talks Taxes, Retrieved from: www.tnooz.com/article/airbnb-finally-agrees-talk-taxes/ (16.02.14). Pedro, L., 2014. Luxury Travel Trends: Building on Past Successes, Retrieved from: www.telegraph.co.uk/luxury/travel/21592/luxury-travel-trends-building-onpast-successes.html (16.02.14). Wikipedia, 2014a. Peer-to Peer Property Rental, Retrieved from: www.wikipedia.org/wiki/Peer-to-peer property rental (16.02.14). Wikipedia, 2014b. Sharing Economy, Retrieved from: www.wikipedia.org/ wiki/Sharing economy (16.0214).
Editor-in-Chief Abraham Pizam University of Central Florida, Orlando, Florida, USA