Briefing: Trust issues hold back the Sharing Economy

New research shows that the Sharing Economy in the UK is being held back because of a lack of trust and understanding. A survey by Trust Pilot found that 29% of people have previously avoided using a sharing economy platform because of a lack of clarity on who would hold responsibility when something goes wrong. The survey also found that 42% of people would usually wait until a friend or family member has used a sharing economy scheme before using it themselves.

In these videos our experts discuss the impact of the sharing economy in hospitality:

A separate survey by Veridu also found similar results.  The survey states that ‘A lack of understanding of the Sharing Economy in the UK is impacting growth with 41% of respondents citing this as a reason for not participating.’ Other reasons given for avoiding participation were unwillingness to share possessions with strangers (41%), concerns for personal safety (34%), and worries that possessions would be damaged (29%).

Some Sharing Economy business have grown faster than others, and Airbnb is a clear success story, although it still has hurdles to overcome. Trust Pilot’s survey found that 58% of respondents had used property rental sharing economy services (e.g. Airbnb) whereas only 28% of people has used private car loan services or car sharing schemes (e.g. Zipcar).

With word of mouth remaining such a strong driver of growth, trust is sure to keep growing over time and emerging Sharing Economy business will continue to present competition to more traditional business.

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Video clips produced by ybc.tv for the Hospitality Channel, including interview from industry conferences such as the IHIF conference as well as specific Hospitality Channel shoots.

Briefing: How competing with Airbnb has impacted hospitality

Airbnb just keeps growing. According to the website it has now had 60 million guests, 2 million listings worldwide, and is used in 34,000 cities. Summer travel with Airbnb has grown 353 times over in 5 years. In summer 2015, nearly 17 million total guests stayed with Airbnb hosts.

Other couch surfing/ hosted accommodation sites include 9flats.com, homestay.com and couchsurfing.com.

What does the growth of this type of accommodation really mean for hospitality and how does the impact vary across sectors? Our experts discuss:

Competing with Airbnb is made more complex by the fact that it offers such a variety of accommodation types. It could compete with everything from a hostel to a luxury hotel. The accommodation on offer includes yurts, RVs, boats and castles. Airbnb appeals to both holiday makers and business travellers so can impact all corners of the market at different levels.

Airbnb is typically most popular in cities. Top destinations for business travel are San Francisco, CA, London, UK and New York City, NY, and Paris, France. At the beginning of this year Airbnb also released some statistic about more surprising destinations that are gaining momentum including Chūō-ku in Osaka, Japan which had 7000% Growth in 2015, Brickfields, Kuala Lumpur, Malaysia, which had 1200% Growth, and Poncey-Highland in Atlanta, GA which had 240% Growth.

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Video clips produced by ybc.tv for the Hospitality Channel, including interview from industry conferences such as the IHIF conference as well as specific Hospitality Channel shoots.

Briefing: Digital innovation improves customer targeting

According to Forrester, by 2020, 47% of Western European advertising spend will come from digital advertising. This kind of advertising allows for very specific targeting of customers. There is a great advantage to knowing who you are reaching and why, and knowing your customers well enough to be able to implement a targeted strategy. According to Forbes, 84% of companies are expecting to increase investment in audience targeting.

Our experts discuss the power that comes from digital and data use:

Whilst digital advertising is increasingly popular, research from Forrester points out that this may be less effective for older age groups who are less likely to consume these ads.  So targeted campaigns for this group may require a different tack.

The Forbes report “Reaching the Right Audience: How Brands Are Using Audience Targeting in Digital Advertising”, which was published in May 2015, found that; “90% of companies spend at least 25% of their digital advertising budgets on specific targets, and 43% of companies spend more than half of their budgets reaching specific targets.”

The report also shows that there is increasing use of digital video campaigns, and that 46% of the companies that use these are careful to validate that they reach the right audience.

Social media sites including, Twitter and Facebook offer ways to make ads that are posted on their sites targeted, and as discussed in a previous briefing, Google has developed hospitality specific ways to improve advertising reach.

Companies will continue to find new and effective ways to reach the right customers. Research from Gartner found that 71% of Marketers have an ‘innovation budget’, whilst Digital Commerce, Social, Marketing Analytics and Customer Experience, were the top-ranked Areas of investment for marketing technology in 2015.

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Video clips produced by ybc.tv for the Hospitality Channel, including interview from industry conferences such as the IHIF conference as well as specific Hospitality Channel shoots.

Briefing: How the world is adapting to the sharing economy

Airbnb has met a need on both the consumer and host side of its business model. It is up to date with the latest technology, and has even recently created an app for the Apple Watch. But regulation of this, and similar sharing economy business, has been an ongoing discussion. A trade body for sharing of economy businesses was started in the UK last year, and in January the New South Wales government in Australia, announced plans for a new regulatory framework for businesses like Airbnb.

In these videos an Airbnb executive and three hospitality experts discuss the success and future of Airbnb:

Tourism Accommodation Australia has announced strong support for new regulations to be created in New South Wales. They have emphasised that the, “’Collaborative’ economy must be about ‘contributing’ to the economy.” Airbnb offers 15,000 listings in New South Wales.

In the UK, according to Airbnb, 52,500 hosts shared their homes in the past year. The typical host earned £2,000 by sharing their homes for 46 nights a year.

Last year in the UK a law was passed making it easier for people to share homes. Also in March 2015, the trade body, Sharing Economy UK was launched following the recommendation of the Wosskow 7 Report, a Government-commissioned independent review.  SEUK has a code of conduct that members must sign up to, which according to the website, “was designed to enhance the operation, image and reputation of the sharing economy industry.”

A recent report on the SEUK website highlights statistics that show the growth of the sharing economy in the UK:

  • The number of businesses with no employees has risen by more than 70% since 2000.
  • 3% of the UK workforce is providing a service through a sharing economy platform.
  • A quarter of the UK population has engaged in a sharing economy activity.

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Video clips produced by ybc.tv for the Hospitality Channel, including interview from industry conferences such as the IHIF conference as well as specific Hospitality Channel shoots.

Briefing: Good data management brings insight and development

Our reliance on digital technology means that data is building at an increasing rate. According to IBM we currently create 2.5 quintillion bytes of data everyday and 90% of the data in the world today has been created in the last two years alone.

Much of this data is irrelevant but where businesses are identifying the correct data sources and taking the time to analyse them they are finding value. Hospitality business should also think about making accurate data available to guests and clients.

In this briefing four hospitality experts discuss data management and analysis:

Many disruptive businesses have digital and data front and center of their strategy.

In hospitality Airbnb employs ‘data scientists’ to analyse things like the likelihood of a host accepting requests from potential guests. This analysis can help them increase the amount of successful matches.

In other industries, companies like Uber have invested in clever data analysis to be able to make predictions about its customers’ behaviours outside of the cab.

Established hospitality brands are also investing in digital and data. In October last year Accor announced plans for its digital transformation, which involves a €225 million investment plan and focus on two ‘pillars,’ IT infrastructure and data management.

Much of the data used and produced today is on mobile devices. According to Accenture ‘50 billion devices will produce actionable data by 2020’.

Research by Ericsson found that mobile data traffic increased by 55% from 2014 to 2015.

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Video clips produced by yBC for the Hospitality Channel, including interview from industry conferences such as the IHIF conference as well as specific Hospitality Channel shoots.

Briefing: Industry Disruptors Part 2- A focus on Airbnb

Airbnb is an immensely successful hospitality player with products across 190 countries. It has housed 15 million guests in just six years of existence, is already one of the largest market players and has recently updated its look to emphasise its brand concept of ‘belonging’. The business model is an extension of the B&B idea. It is a digital platform that allows people to rent all or part of their houses to other travellers.

Should the hotel industry feel threatened by the sharing economy? What will be the impact of regulation? And what can the industry learn from Airbnb? Answering these questions are:

  • Stephan Balzer, Chief Executive Officer, Red Onion GmbH on a shift in the market that could see hotels close

  • Russell Kett, Chairman – London Office, HVS on the need for careful regulation of new hospitality products

  • Steve Lowy, CEO & Founder, umi Digital on using Airbnb to make purchases

  • Shaun Hinds, Managing Director – International Operations, BridgeStreet Global Hospitality on why Airbnb isn’t a great threat

 

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Video clips produced by ybc.hpgcms.wpengine.com for the Hospitality Channel, including interview from industry conferences such as the IHIF conference as well as specific Hospitality Channel shoots.

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