Airbnb and the Experience Economy: the end of sharing?

On: May 2, 2018
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About Renate Brulleman


   

Video: Introducing Airbnb Trips, Airbnb

Airbnb Trips: the promise of an ‘easy’ and ‘magical’ stay booked alongside your Airbnb home. Launched in November 2017, Trips is Airbnb’s biggest and most significant development since its initiation eight years ago (Airbnb). The introduction of the new service highlights the way Airbnb can help travelers to get the richest and most fulfilling experience out of their trip, and places the home rental second. Airbnb Trips is all about “empowering people to share their interests, hobbies and passions” through its three main features, i.e. Experiences, Places and Homes (Airbnb). By means of new features like these, Airbnb and companies alike that were once seen as pioneers of the sharing economy are building towards a new economy that changes the existing organizational structures of monetization. Similar to Uber that encourages its clients to evaluate drivers in assuring the ‘best experiences’, Airbnb now centres on the importance of experiences by providing “unprecedented access to local passions and interests” through the launch of Trips (Airbnb). Accordingly, Airbnb has shifted its focus from the sharing economy to an experience economy, encouraging a new genre of market-driven experiences.

With the sharing economy receiving much attention over the last few years, there has been a lot of debate about the outcome of these popular technologies that “are rapidly disrupting how people experience products and services.” (Richard and Cleveland 239). While some believed in a positive, utopian future for the sharing businesses creating better living opportunities (Wang 2), critics would condemn them for not being about sharing at all, but about economic revenue and self-involvement (Schor 7). As it is not my aim to dispute the positive or negative consequences of these technologies, I will discuss how Airbnb introduces its new features as an effective means to create a collective trend of having ‘genuine’ or ‘authentic’ local travel experiences, that are in fact staged and bought by hundreds of other travelers on Airbnb.

According to Paulauskaite et al. travelers are now “demanding authentic, experientially oriented opportunities with more meaningful interactions with locals.” (619). The sharing economy was in part an answer to this new trend, described by Botsman as “an economic system based on sharing underused assets or services, for free or for a fee, directly from individuals” (2015, n.p.) Airbnb became part of this new economy by creating a peer-to-peer marketplace that turned into one of the biggest online travel communities in the world with millions of rentals every year (O’Regan and Choe 164). Having such a significant position in the market however, successful ‘sharing’ based companies such as Airbnb rapidly started competing on price. That is, Airbnb is originally known for providing shared homes yet it charges its guests per night like hotels. Practices as such indicated a move away from the initial idea of what the sharing economy was. Strategically using the notion of sharing, Airbnb claims it helps people in need of extra money by enabling to become hosts on the one hand, and provides the possibility for everyone to travel in opposition to a more expensive, traditional travel sector, on the other.

From sharing to access
According to Sarah Kessler (2015), “the real sharing economy is dead”. She argues the sharing economy is not truly about sharing anymore, but has developed into a form of sheer capitalism (Kessler). Therefore, the so-called ‘access economy’ became a more suitable term. In this new era of access, “businesses are increasingly mining new assets and resources” (Rifkin). These assets are now transformed into commodified experiences, whether that be experiences of eating, consumption or taking part in a local lifestyle (O’Regan and Choe 165). When everything is accessible, little is charged for the transaction of these experiences, and as a result it may encourage tourists to buy the commodities (O’Regan and Choe 165). By calling these experiences commodities, I refer to their illusory authentic nature. The experiences are planned, organized and staged through Airbnb as prepackaged activities, ready to be purchased by the next traveler as soon as the activity is over. Despite the idea of providing “handcrafted activities designed and led by local experts” ranging from Samurai Swordplay to driving classic cars in Malibu (Airbnb), Airbnb consciously constructs memories and value through immediate experience (Campos, Mendes, do Valle, and Scott; Howell, Pchelin, and Iyer).

As O’Regan and Choe point out,

“Access to private homes and luxury cars serve merely as props, while access to local guides, home-cooked meals and paid-for romantic dates with locals highlight how the intimate, social, and cultural spheres are being pulled into the commercial sphere.” (O’Regan and Choe 165).

The focus has shifted from sharing to making memories, created through experiences that are personal and individual, but also come with a price. Seeing ourselves increasingly as participants rather than consumers, we do not want to buy services or own products, but give meaning to our lives through life experiences such as travels (O’Regan and Choe). According to CEO Brian Chesky, Airbnb has always been about homes so far, but starting with the launch of Trips – that consists of Experiences, Places and Homes – it is now growing beyond that (Airbnb).

Through Airbnb’s Experiences, guests will supposedly find exceptional connections and ways into communities or places they normally would not get in touch with. In Places for example, you can find hidden gems within cities or neighborhoods recommended by cultural experts, neighborhood insiders and Airbnb hosts. And thanks to the Restaurant feature that was added to Places, guests are now able to “book tables at great local restaurants directly through the Airbnb app.” (Airbnb). This new feature intensifies the experience ideology even further. According to Airbnb, the pre-existing Homes section that offers private homes available for travelers worldwide, “will now be available to book alongside Experiences in available cities” (Airbnb), indicating that Experiences rather than home sharing, has become Airbnb’s primary focus.

The experience economy
Based on these late developments, Airbnb appears to be no longer part of a sharing or access economy, but rather of an ‘experience economy’. In this economy, services and goods are being outweighed by experiences that “emerged as the next step in […] the progression of economic value.” (Pine and Gilmore 97). That is, “an experience occurs when a company intentionally uses services as the stage, and goods as props, to engage individual customers in a way that creates a memorable event.” (Pine and Gilmore 98). In the case of Airbnb, the perfectly photographed homes and interiors serve as props while services such as the Insider’s Guidebook or the in-app restaurant booking create the stage that leave the guests with a ‘unique’ experience.

In order to secure a dominant position in the experience economy, Airbnb has well integrated five key design-principles identified by Pine and Gilmore to ensure a memorable experience. According to the authors, the first essential step in creating an experience is to give it a theme (102). Airbnb has done so by making their Trips function revolve around the all-encompassing theme of ‘living like a local’ as their alternative to mass tourism or common touristic places. As the theme “must drive all the design elements and staged events of the experience toward a unified story line that wholly captivates the customer” (Pine and Gilmore 103), Airbnb creates well defined themed campaigns such as ‘Don’t go there, Live there’ to create a unique, longer lasting memory.

Secondly, a company must “harmonize impressions with positive cues” (Pine and Gilmore 103). This is where the Airbnb interface comes in, making the Experience section the first thing you see on the website and replacing the position of the earlier Homes section on the landing page. These experiences are in turn provided with more detailed cues that give all the experience info to persuade guests into purchasing them, such as personal details about the host, the activity outline, practical guidelines, attractive pictures, and price or safety information. This is important for the third step, which is eliminating negative cues by removing “anything that diminishes, contradicts, or distracts from the theme” (Pine and Gilmore 103). Airbnb is very focused on providing the perfect experience for every guest, and uses clear service and information to do so.

As for the fourth step, Airbnb allows a mix in memorabilia (Pine and Gilmore 104). That is, if you are successful in staging a truly original or good experience, guests may spend money on additional products and services during or after the experience as well, that will serve as a memory for this special event. Finally, to create a memorable experience, the experience must engage all five senses: “the more senses an experience engages, the more effective and memorable it can be” (Pine and Gilmore 104). Considering that Airbnb’s main focus is on creating experiences that are as authentic as possible, it tries to stimulate the human senses in various ways, ranging from cooking classes or beautiful sightseeing excursions to attending local music shows.

By encompassing all of these experience principles, Airbnb has come to create a new genre of travel experiences enabled by the structure of a digital platform. Provided that the experiences are focused on authenticity and localness, but are nonetheless designed or carefully constructed, Airbnb Trips have a contradictory nature. Concentrated on revenue and available to all guests, Trips are an illusory of the actual unique experiences that Airbnb claims to provide. And if these once ‘unique’ experiences transform into everyday commodities, perhaps it will only be a matter of time before they are perceived as ‘normal’, or even touristic.

Being a pioneer means being innovative and listening to trends, and by doing so, Airbnb reshapes global economies. While this study highlighted a platform approach to scrutinize how Airbnb transforms the digital travel market by staging experiences, further research could utilize a user-centered perspective in trying to get a deeper understanding of the global experience economy.

 


References

Airbnb. “Airbnb Expands Beyond the Home with the Launch of Trips.” Airbnb Newsroom. 17
November 2016.
<https://press.atairbnb.com/airbnb-expands-beyond-the-home-with-the-launch-of-trips/>

Airbnb. “Airbnb Launches New Products to Inspire People to ‘Live There’.” Airbnb Newsroom. 16
April 2016.
<https://press.atairbnb.com/airbnb-launches-new-products-to-inspire-people-to-live-there/>

Botsman, Rachel. “Defining the sharing economy: What is collaborative consumption – And what
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Campos, Ana Cláudia, Júlio Mendes, Patrícia Oom do Valle and Noel Scott. “Co-creation of tourist
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Howell, Ryan, Paulina Pchelin and Ravi Iyer. “The preference for experiences over possessions:
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Paulauskaite et al. “Living like a local: Authentic tourism experiences and the sharing economy.”
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Pine, Joseph and James Gilmore. “Welcome to the Experience Economy.” Harvard Business Review
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O’Regan, Michael and Jaeyeon Choe. “Airbnb and cultural capitalism: enclosure and control within
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Richard, Brendan and Shane Cleveland. “The future of hotel chains: Branded marketplaces driven by
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Rifkin, Jeremy. The age of access: the new culture of hypercapitalism, where all of life is a paid-for
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Schor, Juliet. “Debating the Sharing Economy.” Journal of Self-Governance and Management
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Wang, Wei. “The differently associated sharing economy.” New Media & Society (2018): 1-18.

 

 

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