Going away always means finding a clean and comfortable place to stay. There are so many options when searching for accommodations, yet two styles have emerged. Hotels have been the standard in lodging for many years, but using the new sharing economy Airbnb has come to the forefront. 

Change is not a new idea in the hotel industry. The first major evolution in the hotel industry started during the Industrial Revolution. At the beginning, coaching inns were small places to stay while traveling, but the growth of railroads changed this dynamic. “By the end of the period, the one-week coach journey from London to York was replaced by a one-day train journey and one night in a hotel in York” (Slattery 25). Railways created a need for higher capacity lodging. Over time, coaching inns were forced out by hotels that could accommodate more people. 

Businesspersons have always been a driving factor in the lodging industry. Airbnb was started with business growth in mind, especially for individuals in artistic fields. Joe Gebbia remembered the first conversation with his roommate, Brian Chesky, about his plan to make some extra cash, “Brian, thought of a way to make a few bucks – turning our place into a 'designers bed and breakfast,' offering young designers who come to town a place to crash, complete with wireless Internet, a small desk space, sleeping mat, and breakfast each morning." Gebbia and Chesky put down air mattresses for three people to stay for a designers’ convention in town. After those first guests, they decided to found Airbnb. They were capitalizing on the millennial sharing economy and started the newest evolution in the hospitality industry. 

Marketing an internet-based accommodations network is difficult with the disparity of internet use amongst generations. Airbnb’s solution was to focus their early marketing toward millennials. By contrast, the hotel industry continued to focus on older generations. Ignoring innovation in the market for so long may have been detrimental to major hotels. By leaving Airbnb alone, the hotel industry let the company flourish without added attacks from competition. Consumers were left to make the decision the idea that Airbnb was the ideal place to stay. Guests started putting more of their money into Airbnb.

The original reaction to Airbnb’s growth by large companies lacked understanding of the severity. Airbnb was not seen as a market-wide player until internet sharing services rose in popularity. “Airbnb has grown much faster in some cities (like quirky, left-wing Austin) than others” (“Room for all”). This allowed hotels to hold the market in areas where people look for luxury accommodations. Austin and other small cities were still profitable from hotels. Cheaper hotels were in those cities geared toward the younger adults visiting. Airbnb allowed millennials to continue in their sharing ideas while they were traveling. Losing millennials was not a major blow to hotels at the time, but they missed out over time because they failed to widen their market. 

As Airbnb started to grow in 2013, The Economist started a call to action, claiming that Airbnb was a threat and changes were coming. “[A] vice-president of The Ritz-Carlton group recently claimed she had not even heard of Airbnb” (“Room for all”). This disregard of another force working its way into the market creates an impervious environment. The creation of new competition should never have been ignored, especially by a major luxury hotel brand such as the Ritz- Carlton. Paying attention to the market would have made it clear that Airbnb was building up, even if it was not a threat. 

 “Airbnb itself agrees, arguing that it does not displace existing lodging but is creating new demand. ‘I’m optimistic that there isn’t going to be a war’ with hotels, Brian Chesky, its boss, said in January.” (“Room for all”) Replacement is not easy. Travelers choose new accommodations in areas where innovation is prevalent. There are also more people taking opportunities to travel. Increasing demand in many different areas means that the smaller hotels will also have more frequent guests. The new demand will only bolster revenue during busier times because travelers will still be putting their money into the local economy. 

The cost of living in New York City has often lead residents to look for other sources of income. NPR spoke to Evelyn Badia in their piece “Could the Party Soon Be Over for Airbnb?” Badia gave up everything to earn a living with Airbnb while she was struggling to find a job. She now lives in a smaller bedroom because renting out her master bedroom is more profitable. “Airbnb has become her livelihood. She earns roughly 60 grand a year through rentals, enough to pay her mortgage.” With so much to lose, Badia has been forced by high cost of living to accept other means of income without fully understanding the law. 

Local government officials started to look closer at the laws surrounding people hosting paying guests in their homes. NPR’s All Things Considered looked at New Yorkers and their use of Airbnb as the city started to target illegal hotel operations. The tax revenue made from hotels started to lower as residents started to rent their spaces out with Airbnb. Laws pertaining to the sharing economy created legal confusion for those wanting to rent out rooms with Airbnb. 

Now people of all ages accept the sharing economy and use Airbnb as an option for accommodations when they travel. The marketing departments of hotels need to focus to the whole market again, as Airbnb keeps moving forward and expanding. Large hotels’ decisions to market to younger generations has partially isolated and frustrated older guests. The sharing economy now has a wider influence on modern culture, reaching consumers of all ages. Joe Gebbia defined the sharing economy as “commerce with the promise of human connection. People share a part of themselves, and that changes everything.” This means that people are not just using space, an object, or a service, but they are creating a connection that can last a lifetime. Guests of all generations are now looking to gain that personal connection. 

It was not until 2016 that the American Hotel and Lodging Association (AHLA) started to think about Airbnb. Their annual meeting ended with a plan to connect with Congressional leaders on the issues of rising housing costs and illegal hotel operation. Katie Benner of the New York Times used an excerpt of their document to think about how this will truly affect the industry. The call to action for local officials had already been heard by Governor Andrew Cuomo of New York. State officials cracked down on illegal operation by citing housing laws requiring the primary occupant to live in the residence during the paying guest’s stay. 

Nathan Heller’s “Is the Gig Economy Working” in The New Yorker highlights connections made through sharing economy and the experiences allowed by using Airbnb to rent a space out. Heller interviewed Caitlin Connors who started using Airbnb to help with her rent in New York city, as many others do, and it allowed them to live their lives more freely while using the income from Airbnb to cover the rent. 

When Connors decided to move, she looked for a place she could easily rent out. She and her roommates then decided to move out of the home, staying at friends’ places or going on trips, one week a month to cover the rent. While this is financially sound, it is also illegal in New York, where state law requires the permanent resident to be in the home while renting their place out to others. It also begs the ethical question regarding neighbors. Allowing other people, namely tourists, into neighborhoods creates a different living dynamic. If Airbnb is an option for people in these communities, communication between neighbors about renting space out is essential. 

The hotel industry’s appeals to millennials have become short sighted, “concluding that millennial travelers want three things: customized experiences, digital convenience and relevant information on social media” (Eng). Social media campaigns are only appealing to a fraction of the market. “Marriott International has gone Hollywood by running its own studio to create short films, TV shows and webisodes that promote its various brands” (Eng). Hotel companies are not targeting a broad enough audience for these advertisements to be effective. 

Getting on the phone to call for room service is gone in some hotels. Aloft Hotels have been using a means of ordering with Emoji, by “texting a string of Emoji with their last name and room number” to an ordering number. Taking out the human interaction, opting for technology continues to replace the interpersonal connection that is a cornerstone of the hospitality industry.

Airbnb’s original intent was not to take over the hotel industry’s business or create a tense dynamic between neighbors. In his TED talk, Joe Gebbia speaks about the company’s goal of helping those who cannot get a room for a big business conference by providing them a place to stay in someone’s home when the other options were not available. Airbnb wants to create a greater level of trust among people in a time where trust is very minimal. The intention was never to take over the leisure travel market, but to create greater access to major events. While they have been using technology to create a brand, they are also focused on human connection and creating bonds between homeowners and the people that choose to stay with them. These major events give them the opportunities to share their space and values. 

Understanding what the guest wants has become one of the greatest priorities of the hotel industry in recent years. Joe Pinsker’s interview with Jeff Weinstein in the Atlantic goes in depth about the comfort guests are looking for. “One thing is comfort—better beds, nicer bathrooms. Really, at the end of the day, the hotel stay is about a night’s sleep and a good shower, and maybe some good food.” (Pinsker). The guests are looking to be comfortable, but sometimes there are too many generalizations as to what they need. 

Changing experiences such as room service will also change the perception of guests. Losing regular guests to innovation for the coming generations is going to lose out in the end. Profit comes from guests that spend the most, stay in the grandest rooms, order room service, and use all the other amenities provided by the hotel. Taking time to consider all of their guests will create a strong environment to flourish in such a competitive market. 

We live in a changing and very competitive market where sharing and trust are becoming more prevalent once more. As Airbnb came into the market, people were wary of others. This acceptance of the sharing economy, especially the opening of one’s home to others has created a new normal in society. Being aware of the many options to consumers makes the environment a great place to compete. Accepting that competition is difficult for hotels because they do not know how to react or adapt without extremes. Creating an environment of competition where both sides have an equal opportunity, while understanding that they are a threat will be the best way to grow in a market that has been innovating alongside society. Airbnb and hotels both have their place for people of different incomes and different needs. Hotels will continue to be the primary place to stay in our world. Airbnb is another option for people who need to find somewhere to stay during a busy hotel period. 
