Introduction

Modern tourism is an industry that functions within quite modern conditions that play a very important
role in determining the industry’s state. Issues like sustainability, tourist over-crowding and growing
regulatory concerns define the current world trends. Tourism sustainability threats include how tourism
can reduce its negative environmental impacts to the \‘ApiKey\’ while benefiting those inhabitants in an
effective and disproportionate manner. Overtourism has exerted pressure on conventional cities,
interfered with local people’s daily lives, and threatened cultural assets, generally in the most visited
global cities. For the same reason, there is increased legal pressure because governments never lose
sight of the social and economic repercussions that come with tourism. Such difficulties emphasise the
desire for creativity and flexibility within the context of tourism activity.

One such innovation is the sharing economy—a socio-economic model that harnesses digital platforms
for exchanging goods and services on a P2P basis and frequently, in the context of this book, those
which are underutilised. In the context of tourism, sharing economy has altered the way of
accommodation and travelling. In the context of Market-Creation business models, new platforms such
as Airbnb have become disruptive actors, enabling people to profit from unused properties while
attracting tourists with specific and typically local accommodation experiences. Such change is again a
paradigm shift from the conventional hospitality industry standards that fails to capture the latest
consumer trend of individualism and uniqueness. However, it also brings series of issues such as legal
framework, social regeneration or remodeling, and the question of sustainable environment.

This paper explores the chosen Airbnb as an organization that is a member of the sharing economy and
an influential actor in the global tourism sector. Airbnb does provide ideas which are creative but it
engages in business operations that are connected with the aforementioned problems. Therefore, the
purpose of this report is to determine how Airbnb straddles the grey area of the sharing economy
business model, assess the economic, social, and environmental effects of Airbnb on host communities,
and identify the company’s efforts towards managing the rule of law as well as sustainability issues. By
investigating these dimensions, it is the aim of the case study to shed light on how Airbnb is being
positioned to effectively respond to the dynamically changing nature of tourism and support sustainable
tourism.

The report will include the best analysis of the current issues influencing the Airbnb platform, evaluation
of the new customer trends affecting Airbnb and conclude on the broader impacts that Airbnb has on
the host communities. Last, it will generate new recommendations as to how Airbnb can overcome
these challenges more efficiently and permanently to remain useful and bring benefits to the sphere of
tourism. At the same time, this analysis provides insights not only into what and where Airbnb is but
illustrates the dynamics and tensions between innovation and obligation in today’s sharing economy
tourism.

1st
Overview of Airbnb and Contemporary Issues

Airbnb as a Tourism Product Provider

Airbnb a company that started in 2008 has disrupted the tourism and hospitality industry through
sharing economy model. The idea lets anyone own an extra home, apartment, or even a room lease it to
travelers commonly known as the hosts. Airbnb does not operate a conventional type of hotels where
people pay to get accommodation; instead, it offers people with experience that location specific, and
there and then. This innovative approach is based on the sharing economy which allows to earn money
on unused property and as an affordable substitute to traditional hotels.

Airbnb is open in over 220 countries and territories with millions of listings covering from cities,
countryside, as well as wilderness. The platform covers rental options from nearly bare bones shared
accommodation to luxury home rental for the broad market demand. Furthermore, airlines have been
offering services such as housekeeping and amenities, and Airbnb has now introduced a personal service
known as “Airbnb Experiences,” where hosts can provide an experience tailored to their own local
calendar including, guided tours, cooking classes, and adventure activities. Such capabilities set Airbnb
as a full-fledged provider of tourism products for the new generation of tourists focused on exclusivity
and relevance.

The business model of the platform is contingent on commissioning. Airbnb collects service fee of 3-5%
from hosts for every booking while the guests are charged service fee according to the total price of the
needed accommodation. This no-holding business model that does not imply owning rooms or many
employees is perfect for Airbnb’s fast growth as well as an array of market needs.

Nevertheless, it is essential to note that relative to contemporary issues involved in hospitality and
accommodation, Airbnb has more than risen to the occasion and has pioneered many of the current
trends; it has the following contemporary issues;

Specific blaoc Conteporaty Issues that impact Airbnb

1. Regulatory Challenges

Regulatory concerns are one of the primary challenges for Airbnb since it has been facing the regulator’s
wrath due to operations of listing home-sharing services from across the world. Some cities such as
Amsterdam, Barcelona, and New York among others have set very tough measures to reign in on Airbnb.
These Rules are intended to solve problems such as inadequacy of housing stock, increase in the rent
levels, and loss of neighborhood identity. For example, New York has banned whole house sharing for
less than 30 days, but those where the owner stays are allowed, which puts a big brake on Airbnb. Like
many cities, Amsterdam has restricted the number of days a property can be rented within a year to
reduce excessive tourists’ pressure and free up houses for the locals.

These regulations not only reduce Airbnb revenue chances but also complicate its operations. It stresses
that the local laws vary and the platform needs considerable efforts to meet them and enforce the
changes. Further, regulatory concerns affect the social context of tourism through presenting general
contradictions that tourism brings to its recipients and impacts arising from the contradictory economic
effects it generates.

2. The following subtopics are gentrification and housing concerns.

Many cities attribute Airbnb’s growth to gentrification of the neighborhood. In cases where tourists gain
access to residential areas, many end up increasing land values and rent prices hence reducing; housing
accessibility. This problem only worsens because many of these buildings are being transformed from
affordable, long-term, rental residences, to short-term tourist accommodations.

For instance, local officials in Barcelona have accused Airbnb of deepening housing shortages that result
in neighborhoods being rendered out of reach to many residents. This has lead to demonstrations and
what can be described as incremental hostility from the native population which seemingly views their
prefectures as theme parks. Other external negative impacts include erosion of cultural heritage and
tourism the relationships of tourists with the locals.

3. Competitive Pressures

Airbnb competes vigorously with traditional hotels, as well as upstart platforms such as Vrbo in
accommodation industry. Traditional hotels have continued to counter by using the strengths which
include quality differentiation, customers loyalty and regulation compliance. However, more direct
threats are found in systems such as Vrbo that operates primarily in the vacation rental space and target
the same customers.

In order to maintain a competitive advantage, Airbnb has broadened its services, launched exclusive
service experiences that include Airbnb Plus, and penetrated unexplored markets. But sustaining the
competitive advantage needs more creativity and capital that can put pressure on the organization’s
capacity. It also has an impact on the rest of the tourism system by way of putting competitive pressures
that lead to change and differentiation in the supply of services and products.

4. Environmental Concerns

While Airbnb is not directly regulated similar to hotels, its functions have issues concerning the
environment. That is, hosts may simply not know how to do it or may not have the appropriate
motivation to apply sustainable practices, which results in problems such as energy overconsumption,
waste production, or carbon footprint. Besides, the platform directly enhances the phenomenon of
overtourism, which has a negative impact on the ecosystems and natural environment of vulnerable
tourist destinations.

Impact on Airbnb business functioning and the tourism environment

These issue post complex interaction impacts the operations of Airbnb. The legal environment is an
important limiting factor that puts pressure on the platform to change its model and improve the
relations with the target community. There will be a clear emphasis on social responsibility as well as
cooperation with local administration due to gentrification, and problems with housing. Vigorous rivalry
pressures prompt product differentiation and market development but add to the pressure for research
and invention. Environmental issues also influence the need to adopt change in the practice in a way
that will meet the global tourism requirements.

Altogether, all these matters suggest that, whereas Airbnb seeks to grow globally and invent new ways
for homesharing, it needs to do so responsibly. Meeting these challenges is essential not only for
massive Airbnb growth and adaptation but also for the effective development of sustainable and fair
tourism ecology.

2nd part

Demand Characteristics and Market Trends

Target customers include; Constrained budget, flexible travelers, adventurous travelers, and the seekers
of authenticity, exclusive and luxury. A major demand characteristic is the Localization and novelty value
of the platforms and offers that are significantly different from typical accommodations. A population of
travellers appreciates residential areas as this allows them to be taken closer to the real life of the
destination than being taken to commercial zones of a city.

The final key determinant of demand is relative cost; yet another factor that supports a significant scale
of demand. Airbnb has relatively cheap and affordable prices for accommodation than most types of
lodging and they offer shared space, private rooms and the whole flat/apartment. This variety makes a
difference in the kind of guests it reaches out to, be it the single travelers, the families or groups. Also,
providing more extended stays with appliances in rooms such as kitchens and workstations are aimed at
benefitting business travelers who need homes for rent for months at a cheaper price.

Airbnb has also been able to employ the emerging trend of experiential tourism into the growth of its
business. This trend is evident as tourists are moving away from the traditional method of mere visits to
sites of interest, to involvement in several activities that include;ahrungverweisen. This way, travelers
have the opportunity to participate in carefully designed social activities with local hosts, including, for
example, cooking classes, historical or adventure tours, which adds to the offering of the Airbnb
Experiences product.

Trends Affecting Demand by the Consumer

1. The Phenomenon of Sharing Economy

Peer to peer, more commonly referred to as sharing economy where individuals sell and buy services or
goods directly through the internet has altered consumption standards. Which is exactly what Airbnb
does: it relies on the technology to provide the guests with the convenience and trust. The benefits
include, need satisfaction, cost savings, convenience and the communal sharing of resources in the
sharing economy. Furthermore, the feature of reading and communicating with hosts improves the level
of trust and increases the level of disclosure among users.
2. Interest in the Original Tourism Experience

Tourism has shifted to experiential travel, with tourists no longer happy to be simply providing their
services for a night or two in a hotel. Airbnb meets this requirement by hosting accommodations in
people’s neighbourhoods and on top of that, engaging the clients with local cultures. This preference is
in line with the existing concept whereby travellers are more interested and willing to spend their
money on remarkable experiences rather than on the tangible items, and this go well with Airbnb
services.

3. Increased Digital Nomadism

The breakout of COVID-19 caused the unprecedented shift towards remote work, hence the boost in
digital nomadism. Flexibility is essential to digital nomads and they tend to look for solutions including
convenience balanced with cost, fast internet and a clear home office opportunity plus tourist
attractions near by. Long-term stays and properties adapted to the requirements of individuals who
work remotely are popular among this type of company, and Airbnb has chosen this market segment as
its target.

4. Technological Integration

The use of technology when it comes to travelling has been embraced by consumers, from choosing a
place to stay to choosing an experience. Intuitively designed workspace, mobile application as well as
the smooth payment options available for customers in Airbnb support the idea of advantage.

Demand patterns as the Direct Influence on Airbnb’s Supply Strategies

The pattern of the demand has changed with time as a factor that has affected Airbnb supply strategies.
In response to these changes, the platform has begun widening its service portfolio and signing up new
hosts.

1. Recruitment of New Hosts

In order to ensure that it always has a good number of listing available, Airbnb has to constantly source
for hosts more so in areas that have not been fully tapped. Through providing the tools and programs,
the platform helps hosts to make money and at the same time guarantees the high quality of offered
listings. Airbnb has recently created programs to target would-be hosts in rural and suburban areas in
light of increased demand for less populated areas during the current pandemic.

Most importantly, the platform also recruits hosting by running awareness campaigns and offering
financial enticements. For instance, new hosts are often provided bonuses or advertisement rates so
that they can take part in a challenge. This strategy is very useful for Airbnb to increase its market share
and meet the demand in new regions.

2. Expansion of Offerings
Finally, seeing the increasing need for reliable and standard housing, Airbnb launched its upgraded
segment called Airbnb Plus for selected homes that meet enhanced higher standards of both equipment
and architecture. This experience is to meet disposable tourists who want higher experiences, fixing a
concern that existed before about various quality issues concerning listings.

This has led to an increase in the number of travelers opting for digital nomadism forcing Airbnb to
encourage more “work from listing”. These listings include the access to fast internet connection,
comfortable office furniture and corporate rates for long term tenants. Furthermore, Airbnb has signed
contracts with firms to present a means of carrying out business remotely in order to promote itself as
being prepared to work flexibly with the globalization of nomadic professional workers.

3. Localized Experiences

To help travelers get real travel experiences, Airbnb now offers Tours and Activities with hosts who are
locals. This initiative targets a pertinent trend of travelers who want to experience culture and is an
extra line of 財 revenue for hosts. By adding onto experiences, Airbnb grows its service to better meet the
needs of consumers wishing to have a memorable journey.

4. Data-Driven Adaptation

Airbnb employs data analysis of trends to determine supply side demand and make the most out of it.
By the analysis of the booking data, the views of customers and the market results, the platform is
capable of predicting new tendencies and corrections in actions. For instance, Airbnb adapted well when
the pandemic hit by changing from short-term rentals in cities to extended stays in the countryside.

5. Sustainability Initiatives

Due to an increase in awareness, Airbnb has been able to make its’ hosts embrace the green culture. It
encourages various aspects regarding sustainability like the use of solar power, energy-efficient
appliances, recycling, which is likely to meet the increasing vibrant for responsible travel and.

Conclusion

Thus, the demand characteristics appear to be more flexible, authentic and personalised to fit Airbnb’s
services in the travel industry. Post COVID-19 consumer trends like the sharing economy, experience
economy and digital nomadism have shifted the tourism consumer behavior the world. In turn, Airbnb
was able to develop new supply capabilities that entail recruiting hosts, expanding the product portfolio,
and applying technology advancements to the new requirements. Such endeavours enhance Airbnb’s
ability to leverage on potential opportunities within the burgeoning markets at the same time adapt to
markets’ volatilities.

3rd

Community Level Effect of Airbnb

The social efforts made by Airbnb positively influence its targeted host communities in terms of
economical, social and environmental effects. Airbnb challenges residents, stakeholders and economy of
the locality and tourism, ecology and sustainability.

Economic Impacts

Positive Economic Impacts

1. Income for Hosts

Airbnb income opportunity for its hosts means that hosts can make an extra income from the property
which would otherwise be idle. This extra cash can be a lot especially to those in the B class income
earners or families in this case. To some extend, accommodating guests helps property owners to build
extra income to cover common living expenses, renovate or make other necessary improvements on the
house, or any other financial requirements.

In less discovered or peripheral locations Airbnb listings contribute to the local economy where
conventional tourism industry enablers may not exist. For example, in small towns, or some rural areas,
people get immediate economic returns by accommodating guests, and therefore generate business.

2. Boost to Local Businesses

Airbnb customers are known to make expenditures such as dining in restaurants, cafes, shops, etc.
making significant impacts on neighborhoods’ economy. Airbnb also does not leave tourists within the
hotels as the users interact with the surrounding economy, distributing its density across the citizens.

3. Job Creation

This depicts that Airbnb benefits job creation within other industries for instance property management
firms cleaning services among others. Also, its experiences segment creates revenue for the local guides
and other entrepreneurs involved in the provision of cultural or leisure services.

Negative Economic Impacts

1. Available credit: Affordable and Accessible Housing

The changing of people’s homes for business and staying-power into short-term lets has pushed up most
cities’ housing prices. The nature of Airbnb, as an Unsubscribe business model disallows long-term lease
and therefore makes housing even more scarce therefore displacing residents. For instance, in
Barcelona and New York Airbnb has been associated with high rental charges due to list of apartments
available for rent.

2. Economic Inequity

Airbnb benefits in economic terms are of unequal quantum for all. Those property owners or investors
with more cash or many properties to invest in have the possibility of earning from the platform while
those of low income status would pay the price of escalating costs of living.
Social Impacts

Positive Social Impacts

1. Cultural Exchange

Airbnb encourages cultural diversity through interplay of host and guests hence improving their social
cultural competency. The culture travelers and tourists pick interact with more when they are locating
their accommodation in residential areas, thus making their travel experiences much more genuine.

2. Renewal of Hidden Gems

On the same note, presence in less-traveled areas can bring new life into such community by
introducing customers, improve traffic and stimulate residents to invest in properties.

Negative Social Impacts

1. Community Disruption

Gorman et al point out that Airbnb services have negative effects because the company has expanded
its operations into residential areas. The increase in yearly tourists often compromises the cohesiveness
of the neighborhood since people meet unknown people and new societal standards.

2. Gentrification gives new life to once cold, dead inner-city neighborhoods, replacing riff-raff
populations with middle-class members in the process.

Airbnb has been one of the biggest culprits of gentrification, usually increasing tourism, and thereby
causing property value and rent to skyrocket. It typically displaces people of long standing in a
community, which changes the culture and character of neighborhoods. For instance, according to Enne
et al., Venice and Paris are two types of cities that have experienced drastic demographic changes
thanks to Airbnb.

3. Quality of Life Issues

To that end, residents in areas where people using Airbnb often complain of problems like noise,
crowding, and alterations to the neighborhood character. These problems can cause tension between
people living in the regions hosting them and the tourist themselves.

Environmental Impacts

Organizations have also adopted social responsible actions that lead to positive environmental effects.

1. Resource Efficiency

For this reason, Airbnb encourages resource conservations by avoiding construction of new facilities but
instead adapting and utilizing already existing homes. Such utilization of a resource may help decrease
the impact of tourism in the environment as compared to developing hotels.
2. [Adoption of various pro environmental measures].

Hynek & Hynek admit that certain Airbnb hosts use renewable energy sources and environmentally
friendly appliances when providing their properties. They aid in minimizing the effects that
accommodations have on our natural environment.

Economic Negative Environmental Impact

1. Overtourism and Urban Strain

The issue of Airbnb is mainly rooted in urban organizing, which caused the problem of overtourism
negatively impacting the local’s infrastructure and services. Problems such as overcrowded public
transport, sanitation, waste disposal and urban land-use are some of the impacts of development
resulting from overcrowded cities such as Amsterdam and Barcelona.

2. What corporate social responsibility issues apply to a business?

As we know, Airbnb is not an organization like hotels, and hosts who rent out their homes are not under
any environmental laws. Conceivably this may lead to high energy usage, wastage and the prevailing
environmental effects that are now apparent.

: Analysis on Social and Economic effects on Urban and Rural Locations

Urban Areas

In major cities, Airbnb offers an advantage in the development of the economy, yet the community has
negative impacts on the social environment. From the increased revenues and guest spending one could
see that the platform holds the potential of becoming a major source of income for residents of large
cities. But it also intensifies problems of inadequate supply of housing, increasing house prices and
rental, leading to social issues such as gentrification and overwhelming levels of overtourism causing
conflicts between locals and visitors. Such effects are undesirable, and therefore regulatory provisions in
cities like Berlin and New York seek to limit the number of entire home listings for short term stays, and
also seek to register these properties.

Rural Areas

One of it has been the positive impacts of Airbnb expansion into low-density and unpopular tourist
destinations. In such regions, the platform generates revenues that otherwise, tourists would not have
generated in those areas. This can result into development of infrastructures, employment
opportunities, and the cultural heritage of communities. But, as was demonstrated with the case
examples, boost in tourist traffic may cause natural resources carrying capacity to be exceeded and
negative impacts on indigenous populations and their cultures can emerge if proper measures of
sustainable tourism promotion are not taken.

Voice in Sustainability Discussion

This paper examines how the interaction between the sphere of sustainability and Airbnb’s
management creates some risks and exposure to various sustainability issues. On one side the platform
facilitates the optimal utilisation of resources, does not require heavy investment for infrastructural
development and fosters local economic development. Conversely, through negative impacts on the
overtourism, housing deficit, and environmental issues; there should be increased regulation, and
integration of sustainable standards.

This recognition means that Airbnb needs to consider sustainable growth to benefit both their business
and the interested community and the environment. Engaging with local authorities to put in place non-
discriminatory policies, encouraging sustainable hosting, and developing the community for the better
are the key measures toward making the platform??s impact on host communities positive.

4th

The three topics include Innovation, Adaptation, and Strategic Management.

Innovative culture and strategic nimbleness are some of the reasons that can convince anyone why
Airbnb can do well even in the turbulent tourism industry. Regarding challenges such as corporations
and the new demands from officials, the competition with other similar platforms, as well as the
development of consumers’ needs, Airbnb has used a number of effective practices and strategies for
competitive advantage and sustainability.

New Solutions for Problem Solving

1. Dealing with more Regulations

To manage the growing regulatory pressures, Airbnb has adopted proactive measures that align with
governmental and community expectations:

o Collaborative Policy Development: The company works with city governments to develop
reasonable hosting policies. For instance in the Netherlands and in the USA particularly in the city of San
Francisco the company has partnered with the authorities to regulate the number of days allowed to be
offered in short term lettings within a given period and also observe the legal measures on housing that
apply within a certain region.

o Automated Tax Collection: It is easy for Airbnb to meet the laws set by various jurisdictions by
being able to collect and remit tourist taxes for hosts. This initiative lowers tensions with authorities,
which always have an implicit demand on public revenues.