Sharing economy - disrupting established industries: A case study of Airbnb disrupting the hotel industry

Abstract

With the rise of technology, the sharing economy and its supportive businesses are also on the rise. Sharing economy businesses have been depicted as disruptive innovations for established industries. This matter is studied by trying to answer the research question: Is Airbnb disrupting the hotel industry, and what is the response of the hotel industry? This disruption is found to be partially true and responses of the industry are described. From this research, better insight is provided into the relation of disruption and response from incumbents, specifically for the case of Airbnb’s impact on the hotel industry. Method of analysis is a case study wherein five characteristics of disruptive innovation are presented and it is measured if Airbnb corresponds with these. Industry response is mapped into three major response strategies on disruptive innovation. The findings of this research suggest that Airbnb is a disruptive innovation for the lower and mid segments of the hotel industry, but disruption is not occurring in the higher segment. From industry response, it is clear that incumbents have only recently begun to perceive Airbnb as a threat and respond to it. Further research may involve more specific economic measures to analyse the influence of the economic crisis and also cultural values may be taken into account in the process of disruption.