Accommodating the sharing revolution: a qualitative evaluation of the impact of Airbnb on Singapore’s budget hotels

ABSTRACT

In 2013, Daniel Guttentag in an article titled Airbnb: Disruptive innovation and the rise of an informal tourism accommodation sector has proposed the view that Airbnb properties compete directly with budget hotels because of their comparably low cost and the present paper assesses the applicability of this hypothesis in the Singapore context. Interviews were conducted with representatives from economy/mid-tier hotels and hostels which account for over 10% of Singapore’s hotel room stock and with Airbnb. The researchers draw upon these key informant views to propose an Accommodation Price and Capacity Matrix as a theory-based mapping of Airbnb’s offerings within the context of Singapore’s accommodation landscape. It is concluded that although Airbnb should not yet be considered as a direct competitor for Singapore’s budget hotels, it will pose a growing threat through the near to medium term. The paper concludes with recommendations about how Singapore’s home rental market should be best regulated.

KEYWORDS:

• Disruptive innovation
• home rental
• sharing economy
• Airbnb in Singapore

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes on contributors

Edward Koh is a D.HTM student in the School of Hotel and Tourism Management at The Hong Kong Polytechnic University. He graduated from Tsinghua University with a Master degree in Public Management, and National University of Singapore with a Bachelor of Science degree. He has 24 years of work experience in the public sector in Singapore.

Brian King is Associate Dean and Professor in the School of Hotel and Tourism Management at The Hong Kong Polytechnic University. He specializes in tourism marketing with an emphasis on cultural dimensions and emerging Asia-Pacific markets. He has published books and articles on tourism marketing, resorts, VFR travel and Asia-Pacific tourism. He is Co-editor-in-chief of Tourism, Culture and Communication.

ORCID

Edward Koh http://orcid.org/0000-0002-0230-453X

Notes

1. Hotel advisory group HVS conducted the survey in early 2016 to seek views from hotel industry professionals on Singapore’s hotel market performance for the year.

2. According to hotel statistics provided by the Singapore Tourism Board, there were 60,908 hotel rooms as at end 2015, an increase of 3736 hotel rooms (6.5%) from the 57,172 hotel rooms as at end 2014.

3. Assuming equal distribution of 60,908 rooms across the 4 hotel categories, there would be 15,000 or so economy hotel rooms in Singapore. The 3800 rooms owned by Hotel 81 Group and Fragrance Group would represent a significant 25% of the total economy hotel room stock in Singapore.