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L101 Accommodation - Sharing Economy

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The Term Sharing Economy?

  • Collaborative consumption’- use of network technologies to rent, lend, swap, barter and share personal products and services.  Sharing companies;
  • Demand: Consumers wanting lower prices for goods and services. •? Supply: Everyday people wanting an income using their existing resources.
  • The relationship between the ‘sharing economy’ and ‘tourism’ continues to grow and will increasingly intertwine as consumers are given more choices in the way in which they travel.

Is Airbnb a 'disruptive product'

A disruptive product will generally underperform with regards to the prevailing products’ key performance attributes(s), but will offer a distinct set of benefits, typically focused around being cheaper, more convenient or simpler. Consequently, the disruptive product appeals to the low-end of the market or creates a completely new market.
Airbnb has an innovative internet-based business model with its unique appeal to tourists. Given it’s disruptive potential, Airbnb’s rise is of great significance for the traditional tourism accommodation sector.

Is Airbnb a challenger?  

  • Challenger brands are those that set-out to do things differently, often differentiating by necessity to capture market share from established leaders when they are not in a position to go-head-tohead- think Uber (the world’s largest taxi brand, yet they don’t own a single car) and Airbnb (the world’s largest hotel brand that doesn’t own a single room).

  • The modern challengers are now challenging something about the category. Is Airbnb challenging the conventions of the hospitality business?


  • What is the ‘sharing economy’ and the ‘network economy’?
  • How do they differ? Clearly state whether you consider Airbnb to be part of the ‘sharing economy’ or a component of the ‘network economy’.
  • Is Airbnb a ‘disruptor’ or a competitor or neither? Make a clear and comprehensive argument to clarify your position.
  • Is Airbnb a different type of competitor? Is there place in the accommodation sector for different types of competitors?
  • Research the effect Airbnb has had on the hotel sector. This will help you decide on whether it is a ‘disruptor’ or ‘competitor’ .
  • Come to a conclusion and justify it.



This study is consisting the discussion regarding the network economy and sharing economy. Sharing economy is an extensive term for a developing set of commercial models, podiums and connections. Under sharing economy there is a wide range while in this study the discussion will be held on Airbnb (Mahadevan 2018). Next is the Network economy which is the developing economic command in the info civilization. Here in this study, the discussion will be held on the various features of both sharing economy and networking economy

Sharing economy and Network Economy:

Sharing economy, is comprised of many names such as, commons-built peer invention, collaborative production, peer-topper, access economy, collaborative consumption, and mesh. An encircling description of these frugalities is possible to stay indefinable. The sharing economy specifies, distributing the knowledge of products and facilities to improve and exchange them. The scenery of sharing economy is divided into six characters –Zopa, Airtasker, Open Shed, Airbnb, Kickstarter and Uber.

Network Economy originates from the chief characteristic of the services of the products which is constructed by the help of social networks which is effective on international scales. The network economy is defined after a sum of viewpoints those are, value networks, modification of the industrial budget, academic property rights, global scale, and information and digital organization (McCulloch and McGarry 2017). Network economy is the worth which is shaped and collective by all the individuals residing in a network moderately than by discrete companies.

Sharing economy vs Network economy:

Uber and Airbnb are considered as Sharing Economy which explains idea and business between specific customers thus, castoff as a wordy perception. To save possessions customers surrendering each other momentary entree which is known as sharing economy thus is different from network economy.

Sharing Economy supports dealing among customers not specifies about leasing or renting products from a company. In the sharing economy customer provides each other a momentary admittance to a product but the ownership is not transferred but in network economy the product is sold, and the ownership too is sold as happens in quikr, or ebay the networking sites of product exchange. Sharing is the resourceful usage of physical possessions and not considers isolated entities transporting a service to each other. Despite everything, people cannot go unemployed but physical products go unemployed. Internet stages which carry clients composed to deliver services with each other to epitomize the required economy (McCulloch and McGarry, 2017). For example, Task Rabbit is a platform, through which individuals are hired to bring out labour everywhere round the house.

Airbnb a part of sharing economy or of network economy:

Airbnb is a part of sharing economy as well as the network economy. Two parties to an Airbnb conversation are the travellers and the hosts are required to get registered on the website that is maintained by the Airbnb. Hosts lean their requirements may be anigloo, an entire apartment, a castle, a chamber in a house (Katsumura et al. 2018). Travellers are then required to browse and make bookings on these schedules. Airbnb revenues a guest facility payment of about 6-12% each time of booking a reservation. The wish for social interface is frequently perceived as the key chauffeur overdue the expansion of the wonder. The success of Airbnb as a component of Network economy is foremost. Airbnb’s business model motivates on a market stage where guests and hosts in exchange of money they rent their houses (Ert et al. 2016). With the help of networking system, guests and hosts can discover comments and reviews along with social media networks to shape faith midst users. However, this tactic is not exclusive to Airbnb. By the help of digital expertise, users can command their knowledge’s and touch future customers ‘selections by numerous online platforms.

Airbnb not hurting hotel business a disruptor or neither:

Business travellers silently favour hotels; further Airbnb’s business depends more than 90% in private tourism. Travellers can be grieved through a dreadful crush in hotel areas if Airbnb were not in operation (Kotsugai et al. 2014). Airbnb extended the accessibility of beds for guests,to stay similarly as a local has countless demand for the individuals observing for the complete experience,it also offers young travellers a more reliable perception of the built-up terminus and reserved prices reasonable for all tourists. Airbnb not reason for adequate centre housing as the chief chauffeur of upcoming charges in chief metro areas. The elementary finances are moderately forthright. Airbnb is not only differentiating with the hotels for tourists it repeatedly differentiates between locals for places. Company has loosened the problem of increasing charges in packed inner city areas from tourists to resident thus, strident down values for the rooms of the hotel, while risingcharges for city inhabitants. The Disrupt Story of the Airbnb on this consequence, neither has dropped prices for travellers, accompanied the revenue of renters thus, making travel more fun in the major cities (Biswas et al. 2016).

Airbnb a competitor to hotels:

Airbnb claims that its commercial model simply links hosts who lease out their private possessions. However, foremost hotel chains claim the main passion of their hotel customers fluctuate massively from the Airbnb's guests thus; their revenues are not getting overstated. Hotels rooms raise a quality price on holidays, weekends and every time guests surpass the amount of beds. Hotel rooms and Airbnb gets costlier in posh locations for example, chief cities or tourist places whereas, Airbnb hosts possessed the right to rent what they suitably want (Guttentag 2015). In most cases, potential customers discover that Airbnb proposes an inexpensive alternative than many hotels. During vacations, for the groups and families’ hotels can be restraining whereas, an apartment can be more cooperative. Airbnb has not arrived the expensive hotel market still now (Ganesh et al. 2016). Whereas, travellers accusing expenditures to their firms are launching to pursue increased rates of business spaces from Airbnb. Coincide, by tracking a rising amount of Airbnb bookings within corporate customers a commercial travel and expense supervision platform, has make sure to this trend.

A principal comparison within the Airbnb and hotel industry is the existence of levies and guidelines in dumpy rentals. From the major view of argument, Airbnb is not added as a matter to the occupancy tax laws which is to be unavoidable disbursing to the sales tax of the native government. Similarly as of a hotel though, Airbnb includes a value-added levy amidst its service charge. Because of the various tax laws, hotels and the Airbnb never charge every guest for a VAT to pay. Hotel activists and national governments endure to attempt and levy taxes and guidelines because of the fast expansion of the Airbnb (Finck, M. and Ranchordás 2016).

The difference between the hotels and the Airbnb is harder because of the tax charges. The value for hotels differs, similarly varies the price for an Airbnb.  Because of the different types of services provided and the treatments which are served by the hotels the hotels incline to stand more expensive. If these factors never matters consumer, then an Airbnb charge leaves a customer added room in the budget of the customer for more sightseeing. Naturally, Airbnb have a habit of to cheaper by 50% than a hotel, additionally an amount is saved by not having food outside as like hotels. Rather in some cases it is observed that sometimes Airbnb rentals appears higher than compared to a hotel rent for one night (Lee et al. 2016).

In the sense of safety, it is observed that both the Airbnb accommodations and the hotels are counted as in both unsafe and safe areas. Hotels in all-purpose, though, offer more safety and a healthier logic of safety than that of an Airbnb. Hanging around within an Airbnb, it is noted effectually remaining in the house of an outsider (Zervas et al. 2017). Similarly follows in the matter of a hotel that it is not trusted all the time. 

Airbnb vs Hotels:

Airbnb offers an excellent occasion to lease a complete apartment or a shared room area and recompense by the night which works out much cheaper for large assemblies. Consuming own area whether a full-stocked kitchen, living room etc. which offers a more liberty for relaxation and relish company of families or loved ones and cooked food at own style.

With Airbnb the expectations of any facilities and with a payment extra at the completion of each booking is not desired thus, a turn down facility is never accepted which lower the prices of the Airbnb (Moodie 2015). All the facilities are available in hotel and if not, people are always available at a phone call. Hotels are perfectly located in the locations that are suitable for business meetings, sightseeing, and bars along with restaurants. Hotels are better options rather than an Airbnb when travel with children. Hotels always ensure the comfort zone along with the entertainment. All is failsafe in hotels; it is recognized accurately about the facilities when walked in. It’s the accustomed sensation we would love to have whenever we go somewhere.


Thus, it can be concluded that travel lovers can go for a option for an Airbnb if wishes for a new experience with an exactly home away from home. Though there are some risks but still be enjoyed. But obviously hotel is safer rather than the Airbnb. But none is failing in the businesses for the other. Both are comprised of some advantages as well as the disadvantages.


Biswas, S.K., Sadhwani, D. and Ekka, P.C., Adobe Systems Inc, 2016. Method and apparatus for sharing server resources using a local group. U.S. Patent 9,419,962.

Ert, E., Fleischer, A. and Magen, N., 2016. Trust and reputation in the sharing economy: The role of personal photos in Airbnb. Tourism Management, 55, pp.62-73.

Finck, M. and Ranchordás, S., 2016. Sharing and the City. Vand. J. Transnat'l L., 49, p.1299.

Ganesh, R., Panda, G. and Peesapati, R., 2016, March. Hardware-in-loop implementation of an adaptive droop control strategy for effective load sharing in DC Microgrid. In Power Systems (ICPS), 2016 IEEE 6th International Conference on(pp. 1-6). IEEE.

Guttentag, D., 2015. Airbnb: disruptive innovation and the rise of an informal tourism accommodation sector. Current issues in Tourism, 18(12), pp.1192-1217.

Katsumura, Y., Suginishi, Y. and Iwata, T., Hitachi Ltd, 2018. Resource accommodation device, schedule management device, and resource accommodation system. U.S. Patent Application 15/554,100.

Kotsugai, A., Sato, T., Takeshita, H., Okamoto, S. and Yamanaka, N., 2014, September. TDMA-based OLT sharing method to improve disaster tolerance in elastic lambda aggregation network. In European Conference on Optical Communications (ECOC2014) (No. P7-6).

Lee, Z.W., Chan, T.K., Balaji, M.S. and Chong, A.Y.L., 2016, June. Technology-mediated sharing economy: Understanding user participation in collaborative consumption through the benefit-cost perspective. In Proceedings of the 20th Pacific Asia Conference on Information Systems (PACIS).

Mahadevan, R., 2018. Examination of motivations and attitudes of peer-to-peer users in the accommodation sharing economy. Journal of Hospitality Marketing & Management, pp.1-14.

McCulloch, A. and McGarry, J. eds., 2017. Power-sharing: Empirical and Normative Challenges. Taylor & Francis.

Moodie, K., 2015. Secure care in Scotland, a scoping study: Developing the measurement of outcomes and sharing good practice.

Nguyen, H.N., Rintamäki, T. and Saarijärvi, H., 2018. Customer Value in the Sharing Economy Platform: The Airbnb Case. In Collaborative Value Co-creation in the Platform Economy (pp. 225-246). Springer, Singapore.

Zervas, G., Proserpio, D. and Byers, J.W., 2017. The rise of the sharing economy: Estimating the impact of Airbnb on the hotel industry. Journal of Marketing Research, 54(5), pp.687-705.

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