The effect of AirBNB on the hotel industry Business Research Paper

The Effect of Airbnb on the Hotel Industry
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The Effect of Airbnb on the Hotel Industry
Executive summary
Frenken & Schor (2019), Gerdeman (2018), and Mirza (2019) reveal the threat posed by Airbnb Inc to hotels in the industry. Although the organizations worked and thrived in competition with each other, the foundation of this organization seemed like the introduction of a giant competitor in the industry. Most of the hotels went into a valley curve in their business operations as Airbnb thrived by working with relatively low prices to attract and maintain travellers and especially the guests seeking accommodation for leisure. The firms in the industry were affected and had to choose between coming up with solutions to the challenge or quitting their operations since business activities had gone to static points with only a few guests that cannot sustain them in the market. Hence, the best option was creating strategic plans like improvement in technology and redesigning the model of the hotels to accommodate all guests and travellers, including price-sensitive consumers.
Introduction
The foundation of Airbnb Inc has posed significant challenges in the hotel industry. The impacts of the operations have interfered with our business activities, and most hotels cannot make or reach the previously made profits from their investments. How is our hotel supposed to survive and thrive with the organization having such a significant competitive advantage? Airbnb has taken over the hospitality industry. As a manager, I know and understand that our hotel is a victim of the introduction of the firm in the industry. The number of accommodated guests had consistently reduced since 2008 when the Airbnb came into the market. Hence, we should engage a strategic plan towards working to normality in the maintenance of quality services and customers as well. Looking into the effects posed to our hotel by the competition impacted by the organization, we should create desirable responses to counteract the issues, without interfering with the continuity of our hotels. On the other hand, the measures chosen should be viable in financial management to avoid errors that could lead to losses instead of achieving distinct solutions to the impacts yielded by the introduction of Airbnb Inc.
Trend Analysis
The Airbnb inc. has grown to one of the most successful companies of the sharing economies affecting not only our hotel but also the entire hospitality industry across the globe. Since the foundation of the organization in 2008, it has continued to experience extraordinary growth while the hotel industry is getting impacted negatively. For instance, a study by Mirza 2019 shows that Airbnb helps more than 200 million travellers and guests to find accommodation, rendering our hotels vacant and with no available clients to take reservations. How are we supposed to remain to maintain our business with such kind of competition? Having most of the guest adopted by the company has affected our hotels negatively. Although we may have better service, the travellers do not know anything about our quality. Hence, most of them get reservations through Airbnb. Although the company is not taking all the guests, the few we get do not meet our expectations and the effort made in the investment process with anticipation of making profits after stability through acquiring and maintenance of loyal customers. Our hotels always have to maintain standards, but the introduction of Airbnb started and has continued to ruin our business operations since it was founded to operate in the economy.
Mirza 2019 argues that the simple technological infrastructure offered by Airbnb requires low capital investments. On the other hand, we have made substantial investments to meet our quality standards and also ensure the comfort and satisfaction of our guests. While Airbnb Inc offers reservations at a low price, we are obligated to maintain our prices, not high but desirable to avoid losses and ensure maximization of profits. This gap has affected our business because most guests seeking for accommodation online always go for the lower prices quoted by the company. "Although Airbnb considerably lacks the services that guests typically desire when travelling, Airbnb offerings cost on an average in large U.S. cities 28 percent less than the average daily rate for hotels in central business districts, which is a significant factor in attracting customers", (Mirza, 2019). Quality has become a nightmare for most guests in the United States because they cannot pay for the extra cost demanded in our hotels. The financial burden falls on our shoulders because we cannot lower our prices to meet the competition as such actions would eventually lead to losses. Also, the company has introduced new and attractive features, such as concerts to attract and maintain more customers. Although our hotels have similar competing features, the inexpensive character introduced by Airbnb affects our financial command since most clients go for their services.
While travellers benefit from ...