There's something inherently appealing about the emerging (and burgeoning) "share economy," the underlying philosophy of which is to make good use of what is sitting underused. It has been going on informally for as long as humans have been social: If you have a tool sitting in your garage and a neighbor wants to borrow it, you'd be churlish not to lend it, and he'd be ungrateful not to return the favor when you have need.
Technology has enabled the practice to extend to strangers, and reciprocation is often (though not always) in the form of money. This shadow economy stepped out into the daylight as entrepreneurs created vertical marketplaces for sharing resources.
Earlier this month, Lisa Gansky, who has chronicled and championed both the share and peer-to-peer movements (together, the "collaborative" economy), moderated a panel at the Australian Tourism Summit exploring the intersection between such collaboration and the travel industry.
First, to put things in perspective:
Airbnb and HomeAway, which connect consumers willing to rent out a room (or their entire home) to visitors, are arguably the most successful examples of "share" in the travel industry. Last year, Airbnb claimed to have 500,000 listings, 8.5 million guests and a peak night of 175,000 bookings. Its competitor, HomeAway, claimed 733,000 listings.
Compare these annual numbers with InterContinental Hotels Group, which has 674,000 rooms available every single night, and it would appear that this aspect of the share economy is, at this point, more ancillary to the hospitality industry than a serious threat to it.
Onstage with Gansky were Jamie Wong, CEO and founder of Vayable.com, which lists travel experiences provided mostly by amateurs (e.g., food tours of Brooklyn), and Drew Crofton, a marketer for SideCar, which enables users to hitchhike via an app that can summon a consumer driver willing to provide a lift in exchange for money.
Wong, admitting that distribution was a challenge, has worked with travel agents and is interested in expanding relationships with the travel industry.
Crofton less so. He appeared to want to distance his company from the traditional economy, which he saw as laden with regulations, fees and taxes. His company launched at the South by Southwest festival and was promptly shut down by the city of Austin. His explanation that "policy makers fear what people want" is probably less accurate than an audience member's observation that governments are funded, in part, through taxes on business transactions.
Crofton pointed to enlightened regulators in California who recognize the potential to ease urban congestion in companies like his. He reported that they told him, in essence, "We'll play your game, but you have to play ours," as regards insurance and training, which he felt was acceptable.
Gansky pointed out that established travel industry companies have already begun working with companies in the collaborative economy. Virgin Atlantic, for example, is using a peer-to-peer, on-demand ride-share company to augment its black car service to airports.
And Wong said she recently partnered with British Airways, which was developing a campaign around assisting passengers to have "authentic" experiences with locals. BA will use Vayable to connect customers with the services listed on her site.
(Be aware that the share economy is not attractive only to the budget-conscious: BMW has an initiative that matches its customers with homeowners willing to let Beemer owners park in their driveways when parking is tight.)
A number of things occurred to me as I listened to the discussion. First, some of these travel practices aren't really new, but technology has enabled Airbnb and HomeAway to create consumer marketplaces to scale up (and remove friction from) what timeshare and bed-and-breakfast models have been doing for years. All fledgling business models resist regulation, but the regulations that developed around those antecedents will, in modified form, inevitably be applied to the collaborative economy, increasing cost and perhaps dampening their appeal somewhat.
Second, the attraction of these alternative travel options is, more than the speakers articulated, connected to the purpose of the trip and who the traveler is. Many offer a lot to someone with a sense of adventure who has time to spare and is seeking to save some money and interact with locals. But a less price-sensitive business traveler who wants to eliminate all unknowns and be assured of high service standards is not likely to arrive at an appointment via SideCar.
Third, the collaborative economy will likely expand because it aligns with global megatrends, particularly rapid urbanization and related transportation and infrastructure issues. Industry and citizens alike are focused on sustainable solutions, and the underlying philosophy of the collaborative economy -- that unused resources are wasted resources -- will increasingly resonate.
Some of the summit attendees, firmly entrenched in the traditional travel industry, told me afterward that they saw collaborative initiatives as marginal to their businesses and questioned the topic's relevance. But I believe that, particularly for those serving leisure travelers, they present some real opportunities.
If I were a travel counselor crafting memorable, authentic experiences, I'd get in touch with Wong.
Email Arnie Weissmann at [email protected] and follow him on Twitter.