Sharing economy: Awareness soars

Awareness of sharing-economy services has exploded in the last year, but usage is not growing at an equal rate.

It was only in 2014 that Travel Weekly Consumer Trends survey respondents were asked about their familiarity with collaborative or sharing-economy services (like Airbnb and HomeAway in lodging and Uber in transportation). In that survey, almost two-thirds (63%) had never heard of them, and only 8% had used them.

In the one year since, awareness has soared to 60%, but usage has only increased to 10%, driven mainly by younger travelers; the greatest incidence of use of these types of services (17%) are travelers in the 21-to-34 age range.

Estimates of sharing-economy usage vary widely, possibly because the research on which they're based measure different types of services (shared housing units vs. full units, etc.) However, they all agree that usage is on the rise.

"The sharing economy is huge," said Henry Harteveldt, travel industry analyst for Atmosphere Research Group. "It continues to evolve in so many unexpected ways, both good and bad. From a consumer standpoint, we are now at a point where, according to our research, a noticeable number of travelers now use home sharing. In the U.S., 14% of consumers have used a home-sharing service such as HomeAway or Airbnb, and those numbers are higher in the U.K. and France."

The strength of the sharing-economy market was demonstrated recently with the investment by Hyatt in Onefinestay, a U.K.-based home-sharing site where each home is visited and vetted by employees.

"In addition to piloting cooperative arrangements with Onefinestay, Hyatt was the first hotel brand to integrate its mobile app with Uber, which makes it easier for guests to travel from their current location to their Hyatt hotel," said a Hyatt spokesman.

"We intend to continue to test a variety of offerings, work with a number of companies and make investments to continue innovating the guest experience," the spokesman added.

There are discrepancies in shared accommodations usage for vacations, based on whether the rental is for an entire home or for a partial home or apartment.

Some research shows that sharing-economy accommodations tend to be more popular among higher-income travelers.

According to the annual MMGY Global Portrait of American Travelers, use of sharing-economy accommodations (entire rental homes) has gone up substantially, particularly among the affluent. Among those with household income that was $250,000 or more, 21% used sharing-economy accommodations on at least one vacation during the past 12 months, compared with 15% of those with an income of $125,000 to $150,000 and 13% of those whose income was between $50,000 and $125,000.

The reasons for the growth in usage among the affluent, said Steve Cohen, vice president of insights for MMGY Global, is a desire for a unique experience. When MMGY Global asked those who used sharing-economy accommodations if they wanted to stay "in an unusual place," 78% among those with incomes of $250,000 or more said yes. That fell to 61% in the $125,000-to-$250,000 bracket and rose again to 70% in the $50,000 to $125,000 bracket.

Phocuswright research, too, found growth in the shared-accommodations market, especially as far as rental of full homes. In 2010, 8% of travelers over 18 years of age used that kind of service for an overnight leisure trip; in 2012, it rose to 10%; in 2013 to 14%; and in 2014 to 22%.

Those numbers are in reference to sharing an entire home, not a shared unit. For shared room or sleeping quarters, the amount of usage is only 9%.

"We are not seeing much growth in renting where you don't know the other people with whom you'll be sharing a room," said Marcello Gasdia, director of consumer research for Phocuswright.

And consultants PricewaterhouseCoopers recently issued a report showing that while there is strong growth in sharing-economy accommodations, traditional lodging maintains an advantage: The report concluded: "The hospitality-sharing economy is appealing because it offers better pricing, more unique experiences and more choice, but security, hygiene and uncertain quality still loom as big concerns. For these reasons, our survey showed that consumers familiar with the sharing economy are 34% more likely to trust a leading hotel brand than Airbnb."

As for ride sharing while on vacation, according to MMGY Global, millennials are leading the way, with 21% having used ride sharing in the past on a vacation. Among other age groups, those numbers were 7% for Gen-Xers, 4% for baby boomers and 3% for matures.

"The primary reason millennials gave for using this mode of transportation was because it eliminates the need to have cash," Cohen said. "Another thing is that millennials like knowing who the driver is. A full 83% of that group say they preferred ride sharing to taxis, and 76% said they preferred it to rental cars."

Sharing's impact on travel

How all this might affect the travel industry, said Cohen, is that "one of the opportunities for hotel companies is to invest in nontraditional hotels that meet the requirements for the affluent wanting something different; they need to consider brand extensions outside of their core business."

Said Harteveldt, "Home sharing is going to have a more noticeable impact in the coming years, in particular on the hotel industry. There are already some hotels trying to sell through Airbnb.... Airbnb won't buy a hotel company, because they wouldn't want the headaches, but it will become more of a travel company.

"I wouldn't be surprised if Airbnb got an IATA number so it could sell airline tickets or even if they started to sell event tickets," he added. "They could become a competitor to Expedia or Priceline or even Liberty Travel."

Major travel retailers, meanwhile, have their eye on sharing.

"We are interested in the shared economy, but we have to be aware of who our partners might be in that area," said Claire Bennett, executive vice president at American Express Travel. "We feel responsible end to end for our travelers' holidays, so even if they use a shared-economy service for part of their trip, we would want to know who they are dealing with. Travelers need to know they have somewhere to go if something goes wrong, and we have long-established relationships with other partners with whom we feel comfortable along those lines."

While much of the sharing-economy growth has been driven from the ground up, one entrepreneur sees a way for hotel operators to get in on the sharing concept themselves.

Yannis Moati, founder of HotelsByDay, which sells daytime hotel use, said, "We consider ourselves part of the sharing economy because we help hotels optimize unused inventory. But instead of driving business away from hotels, we drive business back to them."

Agents can get in on all this, according to Harteveldt. "I have been told by agents that clients are asking about home stays, and they can make money on that by charging fees," he said. "I don't see home shares paying agency commission right now, but in the future, who knows?"

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