Malaspina University College The Nature of The Airbnb Industry in Mombasa Discussion

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Topic: THE NATURE OF THE AIRBNB INDUSTRY IN MOMBASA Chapter Three Methodology Introduction Research Design Study Area Target Population Sampling Technique Sample Size Research Instruments Data Analysis Conclusion Topic: THE NATURE OF THE AIRBNB INDUSTRY IN MOMBASA CHAPTER ONE Background of Study Business practices have changed dramatically due to the expansion of multifarious digital innovations (Romero, 2018). For instance, technology-enhanced networks like Bolt and Airbnb have made it possible for individuals to make use of underutilized assets by improving the efficiency of the travel and tourism industry. According to Meyer (2016), the abilities of such technologies may well be generally encapsulated as "sharing economy" growth. Even though the majority of such inventive contributions to the worldwide economy are respectable and impressive, analyzing the overall effects using a structured approach is necessary. In tourism, Airbnb has considerably impacted the conventional way of conducting business. The brand offers a virtual service that enables individuals to market their residences for relatively brief rental stays, similar to how hotels operate. The company is successful because it provides property owners with a means of leasing out a piece of their homes, rooms or cottages to earn extra money (Hati et al., 2021). Simultaneously, customers gain from "a home experience away from home" since, in contrast to traditional hotels, most postings on the organization's website are actual households. Thus, making Airbnb a win-win for homeowners and tourists who need to experience a particular way of living. In the year 2017, Kenya recorded more than 39,500 users of Airbnb, which was a 143 percent increase from the previous year (Mumo, 2017). Worldwide, more than 100 million people have used Airbnb for short or long-term stays in different cities (Hati et al., 2021). Such an accommodation model has altered the past hospitality norms where a tourist had to book a hotel room or have meals at set locations; however, the present technology offers a better substitute for the traditional hospitality norms where tourists book their room and can interact with the local community and eat with the local people. Considering that many individuals have gladly accepted the peer-to-peer site, it has dramatically boosted the travel industry due to its relatively low prices compared to the hotel price. The range of products and services offered by Airbnb has broadened the scope of potential lodging options. Over the years, Airbnb has grown with a net worth of $113 billion (Lock, 2022). Such a statistic proves that Airbnb is worth more than traditional hotels such as Hilton Worldwide Holdings, Marriott International, and Intercontinental Hotels Group (Sonnemaker, 2020). Considering this intriguing company value dynamic, there is a need to study the nature of the Airbnb industry. Therefore, this paper seeks to research and assess Airbnb’s growth in Mombasa and determine its influence on domestic travel. Problem Statement Even though many accommodation facilities, majorly the hotels, are aware of the potential implications of the Airbnb industry on their operations. It is challenging to quantify or precisely forecast the real impact of the Airbnb industry on the travel industry within Mombasa. Considering that most hosts offer the products solely using social media platforms such as Facebook without depending upon the Airbnb platform, making rather hard to predict how the industry champions the travel industry (Ayodo, 2022). Moreover, the registration requirement, which Airbnb hosts consider to be rather high than usual, forces many hosts to operate in the dark, making it challenging to give accurate statistics on the impacts of the Airbnb industry. Considering such a problem, the government and hotels are obviously unaware of the impacts of Airbnb within Mombasa. Furthermore, individuals aware of the potential consequences cannot quantify the accurate statistic (Kenya National Bureau of Statistics, 2020). This proposed research offers a contextualized evaluation of Airbnb’s impacts on the Mombasa hospitality industry. Purpose of Study Airbnb has proved to be a massive challenge to the hotel industry but rather a pro for the travel industry in general; this is championed by the changing dynamic of how individuals seek accommodation within Mombasa. Airbnb emphasizes peer-to-peer accommodation arrangements rather than employing customer-to-organization strategies to rent accommodation facilities (Hati et al., 2021). As a result, ordinary hotels are cut off from the accommodation industry. This research aims to better understand the impacts of such an alteration in today’s business model by focusing on the implications of the Airbnb platform in the Mombasa hospitality sector. Research Questions 1. How far have Airbnb’s activities impacted hotel room rates in Mombasa? 2. Has the growth of the Airbnb activities in Mombasa impacted hotel revenue? 3. How much has Airbnb promoted domestic tourism within Mombasa? Research Objectives 1. To find out how Airbnb's activities have impacted hotel occupancy rates in Mombasa. 2. To look into the impact of Airbnb activities on the pricing paid by hotels in Mombasa. 3. To investigate the impacts of Airbnb’s activities on domestic tourism within Mombasa. Significance of Study Even though most hoteliers have disregarded Airbnb’s effects on their organizations, they fail to acknowledge that the novel business model that Airbnb has adopted is here to stay and has an impact on how travelers choose to stay, considering the relatively lower prices that they offer travelers (Hati et al., 2021). It is critical to investigate the influence of Airbnb on various hospitality industries and existing markets. The planned research’s findings would contribute to the expanding body of knowledge about peer-to-peer commerce and its impact on the sharing economy and the nation’s hospitality industry (Hati et al., 2021). The study will be based on the two-sided market economic principles. For instance, it will contribute to a better understanding of the conceptual and structural variables in explaining the pricing system of goods and services in the hotel business and the utilization of similar items in the sector. Through this research, it will be more precise for stakeholders to understand concepts that link advances in service design and re-evaluate how to connect and integrate with the current service marketplace. Therefore, this research will enable hospitality stakeholders to understand better the current business behavior from a two-sided market perspective. Study Scope The proposed research focuses on the nature of the Airbnb industry, giving its positive and negative implications for tourism and the hospitality industries. The data collection will be conducted within Mombasa, focusing on the registered Airbnb but not limited to unregistered hosts, considering that they comprise the most significant number of Airbnb hosts within the region. This study will be conducted through questionnaires to the hosts as a survey reference. Furthermore, direct interviews will come in handy during the study; this will facilitate accurate data collection, enabling easy analysis of the implications of the peerto-peer platform to tourism within the region. Limitations This research has potential limitations. The first limitation is limited access to data. It is worth acknowledging that even though the Airbnb platform is a legitimate platform offering real household accommodation. Airbnb does not own any of the listed properties. All properties listed on the platform are owned by individual investors who the government requires to register as business owners and file their returns (Hati et al., 2021). However, most conduct lowkey operations mainly to evade heavy taxation (Mumo, 2017). Thus, this will make it rather hard to access the registered hosts, who are very limited. Moreover, since Airbnb acts as an agency, they tend to keep the contact information away from the users to prevent users from directly negotiating with the suppliers. Thus, this will tend to be a limitation of the research. Secondly, there is limited research about the topic, majorly within the nations. Most studies tend to focus on foreign regions where the peer-topeer matching strategy has thrived. Therefore, developing an entirely novel research typology will be necessary. Conclusion Numerous researchers have broadly described the effects of Airbnb on hotel operations. However, the impact of the technological platform in the hospitality industry is moderated by several markets' distinctive features. For instance, some towns lack the necessary infrastructure to give visitors access to the available properties; moreover, due to customers’ lack of know-how, there are insufficient properties listed on the Platform. Narrowing down to the Mombasa market, most Airbnb hosts capitalize on the likes of Facebook and Instagram to advertise their Airbnb listing, thus getting more clients away from the central platform. Coupling all these dynamics together makes it even more challenging to generalize the effects of Airbnb on the tourism and hospitality sector. As a result, a contextual examination of the study issue is required. This study aims to comprehend the growth of Airbnb in Mombasa and investigate its effects on the city's tourism and hospitality sectors. References Ayodo, H. (2022). Airbnb businesses thriving, but KRA looking to grab share of the spoils. The Nairobian. Hati, S. R. H., Balqiah, T. E., Hananto, A., & Yuliati, E. (2021). A Decade of Systematic Literature Review on Airbnb: The Sharing Economy from a Multiple Stakeholder Perspective. Heliyon, 7(10), e08222. Kenya National Bureau of Statistics. (2020). KNBS - Economic Survey 2020. Lock, S. (2022). Airbnb: company value 2016-2018. Statista. Meyer, J. (2016). Uber-Positive: Why Americans Love the Sharing Economy. In Google Books. Encounter Books. 3&dq=Meyer Mumo, M. (2017, December 11). Kenyans list 5,900 homes on vacation site Airbnb. Business Daily. Romero, L. D. S. (2018). Springer Texts in Business and Economics Electronic Commerce 2018 A Managerial and Social Networks Perspective Ninth Edition. Electronic_Commerce_2018_A_Managerial_and_Social_Networks_Perspective_Nint h_Edition Sonnemaker, T. (2020, December 11). Airbnb is worth more than the 3 largest hotel chains combined after its stock popped 143% on its first day of trading. Business Insider Africa.
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