#gagtc15 from airbnb to uber – what you need to know about shared travel services alisha...

#GaGTC15#GaGTC15

From Airbnb to Uber – What You Need to Know about Shared Travel Services

Alisha Valentine, Strategic Marketing & Research Insights,

and Bridget Lidy, City of Savannah

The Case Against the Sharing Economy, Susie Cagle, The Nib, May 2014

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The Case Against the Sharing Economy, Susie Cagle, The Nib, May 2014

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The “Gig” Economy

The sharing economy (sometimes also referred to as the peer-to-peer or P2P economy, mesh,

collaborative economy, collaborative consumption) is a

socio-economic system built around the sharing of human and physical resources.

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Tipping Point

In 2013, just 45% of overnight travel trips were spent in a hotel, a tipping point in the

lodging industry.

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Hotels Call Them …

STORMS:Short Term Online

Rental Marketplaces

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A Changing Landscape

Old Model• Companies will deliver• I want security, and I’ll pay

for it• Comfort with brands• I buy from companies

whose policies I value

New Model• I trust crowd sourcing• I want unique and

affordable, and I’ll risk it.• Loyalty to “local”• I like people whose values I

value and who value me

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“We’re moving from a world organized around ownership to one organized around access to assets.”

– Lisa Gansky, Early Share Software Developer

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• Millennials will outspend their boomer parents in travel by the year 2017.

Source: Women’s Wear Daily and Berglass + Associates Study, 2013

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Studies show:

Know the Terminology

• “Neo-Sharers” (16%) – have used at least one “emergent” sharing service in the last year (including sites like Etsy)

• “Re-Sharers” (23%) – those who “buy and/or sell pre-owned goods” (sites such as eBay) but who have not graduated to neo-sharer status

• “Non-Sharers” (60%) – those yet to participate, but many of whom indicate wanting to try

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• 23% of U.S. population• 48% ages 18-34 – Millennials• 27% married• 62% homeowners• 49% incomes less than $50k• 35% of neo-sharers, however,

have incomes of greater than $100k – more than twice as likely as non-sharers

Source: Vision Critical’s Voice of Market Studies 2013-2014, 90,000 participants ages 18 and older

Who shares?

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• Boomers, empty-nested and down-sized from their jobs or wanting to supplement their retirement income are also turning to vacation home rentals as a means of income.

What about the Boomers?

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• 74% of Boomers and 72% of GenXers now use shared services, just slightly less than the 80% of Millennials.

Not just for Millennials

• Ride-sharing reasons differ by age, with some citing safety and cashless payment options as primary reasons for using services like Uber.

• 79 percent% like not having to pay their driver directly and feel safer since the app identifies the driver and handles payment.

Source: MMGY Portrait of the American Traveler, 2015

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• 47% Word of Mouth• 13% Social Networks • 16% Traditional Marketing

• Search – 16%• Media – 8%• Online Ads – 7%

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How discovered?

Tourism-Related Sharing Examples

TRANSPORTATION• Lyft• Uber• BlaBla Car• Hail• Sidecar• DriveNow• ParkAtMyHouse

LODGING• Airbnb• HomeAway• CouchSurfing• VRBO (Vacation Rentals by

Owners)• House Trip• CouchHomeSurfing

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Tourism-Related Sharing Examples

DINING• LeLoca (sells unused seats in restaurants with food discounts)• Cookening (eat with a local)• EatWith (eat like a local)• EatWithMe (shared food events)• Munchery (San Francisco food delivery by chefs)• Gobble (dinner kits)• Underground Restaurants (large urban areas)

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Tourism-Related Sharing Examples

TRAVEL – OTHER• Vayable (authentic tour experiences by locals)• Concur (travel operator-like services, expense monitoring)• Tours by Locals (private tour guides)• Roads Scholars (small group tours with intimate in-home

experiences, i.e., dinners with artists)

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Continually Evolving Marketplace• ZipCar, the world’s

largest car sharing network, started in 2000. Now, there are nearly 1 million members and 10,000 vehicles.

• Indianapolis is launching BlueIndy, partially subsidized by government funding. Positioned as an alternative for residents but an amenity for travelers. Charging/rental stations positioned in key tourist spots – airport, downtown, etc.

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Proponents Argue

• These “micro-jobs” are part of a “second economy,” providing additional money into the pipeline in an otherwise stagnant wage economy.

• More than half of money earned is defined as “new money,” or resources beyond paying the bills, re-fueling extra spending like travel.

• Shared economy lodging participants tend to spend more and stay longer than traditional visitors.

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Opponents Argue

• It’s highly unregulated and potentially unsafe.• It’s unfair to companies that spend money on licenses and

comply with governmental requirements such as inspections, fees and lodging taxes.

• For some markets, e.g., conventions, booking outside the block is unfair to its group organizers’ meeting minimums.

• Neighbors are starting to balk at strangers staying in their residential communities.

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Brian Chesky, Founder Airbnb

http://thecolbertreport.cc.com/guests/brian-chesky/ddvyto/brian-chesky

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Situation Analysis

• New York is fighting Airbnb to gain access to its host records, suspecting some are in violation of law, generating a huge point/counterpoint ad campaign

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• Airbnb states on its website to its hosts that it should check into local laws regarding lodging taxes and remit those, or ask their customers to remit those in person; in some cases, it has negotiated to collect and remit those on behalf of the host.

Practical Application

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Situation Analysis

• In San Francisco, owners are kicking out their regular tenants to run 100% transient lodging operations. Current law allows rentals of 90 days if owner not present. Proposition F slated for a November vote.

• More and more, “big business” is moving in on the “shared economy” under the subtext of individual owners, skirting local regulations, taxes and fees

• Portland authorized Airbnb rentals so long as lodging taxes are collected

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Situation Analysis

• Airbnb collecting for lodging taxes for 12 local U.S. municipalities.

• Collecting sales tax for the state of North Carolina.

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How many Airbnbs do you have?

Georgia Total – 3,100+

• Atlanta = 1,000+• Savannah = 518• Augusta = 233

(Average rate $423)

• Athens = 225• Columbus = 15

Competitors• Charleston = 816• Hilton Head = 572• Myrtle Beach = 370 • Jacksonville = 295• Birmingham = 66

Average rate: $132

<$65/night: 691$65 -$100: 949

$100-150/night: 624$150-$250: 468

>$250: 430

Bills to be heard January 2016 in SC legislature

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Airbnb to continue growth in cities

10%• HomeAway Model

introduced 2014• Favorable to large

property managers

3%• Airbnb host fee

attractive to single owners and smaller managers

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Already a significant part of demand

• Airbnb is 5.4% of lodging in NYC, up from 3.1% the previous year.

• For a small bureau, 5% could be $1.5 million in gross sales and $75,000 in lodging taxes.

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New

York

Cit

y R

oom

Nig

hts

–

Apri

l’1

3-1

4

30.9 million in hotels

1.8 million in Airbnb

#GaGTC15

Regulating Short-term Vacation Rentals

Bridget LidyTourism Management & Ambassadorship

City of Savannah

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Existing Lodging Accommodations

• Bed and Breakfast Guest Unit:– Rental of one bedroom in an owner-

occupied residence to travelers for less than 30 days

• Inns:– Shall contain not more than 15

bedrooms or suites; may serve meals; provided such services are limited to guests occupying rooms within the inn

• What about entire dwelling units?

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Local Concerns

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Quality of life

Neighborhood integrity

Fairness within the industry

Renter safety

Zoning regulations

Zoning Text Amendment

Amended zoning code to include short-term residential rentals: • Create and define the use:

– Entire residential dwelling unit is rented for lodging – Rental not more than 30 consecutive days– May or may not have an on-site manager– Includes all housing types – Does not include group living or other lodging use

• Established zoning districts where permitted and restrictions

• Maximum number of occupants • No change in the exterior appearance or

other visible evidence of rental

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New Regulation

• Establish certification process:– Application– Business Acceptance Approval– Code compliance verification– Exemplar agreement – Proof of ownership & insurance– Annual fee

• Define responsibilities of rental agent• Provide process to address violations • Obtain Business Tax Certificate &

remit hotel-motel tax

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56

(21%

)

128(49%)

77(30%

)

Property OwnersManagement Com-panies Independent agent

Ownership: 68% reside in Chatham County 32% reside outside Chatham County

Types of Management Jan 1-Apr 15, 2015

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1 bedroom

2 bedrooms

3 bedrooms

4 bedrooms

5 bedrooms

6 bedrooms

7 bedrooms

0

10

20

30

40

50

60

70

52

70

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12

2 1 3

# of Bedrooms per STVR1st Quarter 2015

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0 1 to 3 4+0

102030405060708090

88 86

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STVR Parking Spaces1st Quarter 2015

# of Parking Spaces per STVR

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STVRs Bed and Breakfast Guest Units

Inns0

10

20

30

40

50

60

70

80

59

22

15 4

1

105

1

74

31

3

ZONING ENFORCEMENT since May 2014

In ComplianceIn CourtActiveTotal

108 lodging accommodations cases with 82 in compliance

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HOW DO WE MEASURE THIS MARKET IMPACT?

Community Conversation

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Who here has included “shared economy” questions in market research?

• If yes, how?• If no, how do we do it?

QUESTION 1:

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Interest in Shared Economy

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Dec. 2014 Visit California Tracker 2014 Visit California ROI, Jan. 2015

TNC STORM0%

5%

10%

15%

20%

25%

30%

35%

40%

5% 5%

11% 11%

20% 21%

Likelihood to Use Shared Economy Resources

Very likely Somewhat likely Might or might not TNC STORM

6.0%

0.5%

Shared Economy Usage on 2014 California Trips

How do destination marketers manage the positioning and marketing of this new economy?

• Do we ignore?• Do we engage and promote?

QUESTION 2:

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Get ahead of a potential problem

• Bureau in Indiana considering a policy to begin collecting from 30+ shared home rentals, primarily Airbnb. Working with the county to utilize current statute and Dept. of Revenue reporting.

• Grew from 6 to 30+ in 3 months. Wanted to have policy in place before it got too big.

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30 properties

2 rooms each

Small,

limited

service

hotel

With OTAs and social media assuming the role of the destination marketer, and one more layer between product and promotions, what’s next?

QUESTION 3:

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THANK YOU!

ALISHA VALENTINEAVALENTINE@SMARINSIGHTS.COM

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