The CEO of Accor this week argued that he wants all accommodation providers (ie community marketplaces such as Airbnb) to be subject to the same taxes, health and safety and insurance checks that hotels face.
At present, there is a virtual stampede by suppliers to cry foul at the likes of Uber and Airbnb and point out how they comply with duty of care obligations, pay required taxes, etc.
The established suppliers continue to play the fair playing field, duty of care and data cards as their tactics in portraying the sharing economy players as the bad guys. But is the sharing economy really hurting corporate travel programmes? They might actually be helping.
There's an old saying that good economists make terrible business people (Keynes being the only exception as the wine cellars of King's College Cambridge can testify). But there is a beginner's tenet of economics that some business people, notably traditional hoteliers and ground transport providers, might want to ponder as the sharing economy continues its seemingly inexorable rise, namely the theory of external economies of scale.
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Airbnb does not currently follow the same regulations as hotelsThe basic idea is that a business can benefit from the activities of another. In other words there can be no direct input from the business but the actions of another company can result in the first business having lower costs, higher sales or some other indicator of increased productivity or yield. The classic example is what happens to the only restaurant on a street once it is joined by another.
Logic might dictate that the first restaurant's business would be cut in half but that would be to believe that the potential market for restaurant dining on the street was finite. The usual reality when a competitor restaurant opens is that business improves. The reason is simple. More restaurant capacity in an area means that more people are likely to visit it as a dining 'destination'. After all, a previous trip to the street could have resulted in the discovery that the one restaurant was full. Now a trip won't be wasted because if one is full, there might be capacity in the second. In other words more people get in the habit of using restaurants in the area. Competition can grow the market.
Anyone who questions the efficacy of the theory need only to look at the inexorable rise in the number of coffee shops in the past decade and our seeming infinite capacity to purchase cups of coffee.
There is a theory that the same could be the case with the sharing economy entering the world of accommodation a la Airbnb. Is it actually taking business away from existing hotels or is it introducing the concept of staying in transient accommodation to a whole new market?
Taxes are an external factor which even the most adroit travel manager cannot control but data and health and safety checks are surmountable barriers.
Choice usually drives compliance. Choice and competition should be good for buyers, not a worry.