Module 10: Collaborative Consumption in Tourism

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Topic 3 How Collaborative Consumption disrupts the traditional tourism sector

Module 10: Collaborative Consumption in Tourism Unit 2 Collaborative Consumption in the Tourism Sector Topic 3 How Collaborative Consumption disrupts the traditional tourism sector

1.Positive and negative aspects of CC in tourism

The spread of CC practices in the tourism industry presents both positive and negative aspects, especially regarding the accommodation sector.

Positive aspects

Negative aspects

  • It helps responding to peaks and troughs in demand for tourism service. As traditional accommodation services might sometimes be saturated for some reason (ex. : following special events), sharing accommodation platforms can help respond to this excess demand.
  • Sharing accommodation platforms offer lodging opportunities in areas where the traditional offer is less developed, creating tourist activity in new areas. It supports the local economy and mitigate the unemployment by redistributing wealth in a more egalitarian way. More generally, the use of idling assets adds product diversity for tourists but also provides local actors, including those previously excluded from the tourism economy, with the opportunity to generate benefits.
  • It leads to a scarcity of long-term rental properties as owners favour short-term rentals.
  • It empties tourist areas from their “true” inhabitants. They leave these areas mainly for two reasons: less housing is available and the remaining ones see their rents rising; inhabitants suffer from living together with tourists as the latter are usually more noisy and/ or less attentive to local conventions since they are just passing through.
  • While CC allows individuals to obtain an extra income by offering their goods or skills, it might also reduce job security if the work in CC is their only source of income because they are then not provided with social security (for instance no paid sick leave) .

2.Advantages of choosing CC instead of traditional tourism actors

With the shift in tourist demand and desires, CC platforms appear as the ideal choice for those travelers in search of something different as they provide guests with personalized and authentic experiences, helping them to discover local culture, interact with the local community and live like a local rather than like a tourist.

In the accommodation industry more specifically, sharing platforms, such as Airbnb, offer a better variety of types of accommodation (from treehouses to vintage caravans) and give opportunities to live outside of high-traffic tourist areas, thereby meeting postmodern demands.

The same element can be exemplified with carsharing. While traditional car renting companies offer a limited choice of car models, at higher prices and often only close from airports or train stations, carsharing companies allows individuals to affordably access a great variety of car models, including luxury ones, from multiple locations throughout cities where it operates, demonstrating then greater convenience for consumers.

3.Reaction of incumbents towards the growth of CC

The assets and the growing attractivity of CC lead incumbents to feel threatened. As a reaction, they often intend to bring to light limits of CC in the tourism industry and ask governments and municipalities to level the playing field.

The main critics concern the lack of regulations to CC companies which lead to an unfair price competition with the traditional players in the tourism industry. While hoteliers have to deal with environmental protection, labour law, consumer protections, safety and health regulations, and multiple taxes, short-term rental services on sharing platforms are not compelled to abide to most of these rules. The same is true for other sectors of the tourism industry, for instance taxi drivers who need to pay a licence while uber drivers do not need to make this investment even if they do the same job ; restaurants which feel threatened by “private kitchen” offerings which are not operating under strict health regulations ; or tour operators who are also heavily regulated in terms of health, safety and consumer protection while CC companies have no regulation.

At the same time, the lack of regulation regarding CC activities also leads a certain proportion of consumers to rely on traditional tourism actors. Indeed, they offer guarantees with respect to quality, health and safety standards of the services since they comply to strict regulations and are professional service providers.

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