Airbnb, which is a part of the sharing economy, has major impacts on the tourism industry. These impacts are both positive and negative. They are positive since the number of bednights at a destination may increase due to the Airbnb options. Increasing competition is also expected to result, overall, in lower prices for guests in the accommodation industry. On the other hand, they can be negative due to many Airbnb accommodations neither being registered nor paying taxes, whereas hotels have to do both. Thus, if there are no legal requirements regarding the Airbnb accommodations at the destination, this can result in unfair competition for the whole accommodation industry; especially for hotels. The reality is that Airbnb listings are already spread around the world, are very popular among young travelers in particular, and as such are negatively influencing the demand for hotels and, in turn, their revenue. The same trends are evident in Vienna, one of the top 10 European tourist cities in terms of bednights.
In more detail, the potential threats of Airbnb to the hospitality industry can be analyzed in three ways: (1) Economic threats: include the increasing standardization and transparency of products and services, which lead to greater competition and lower profit margins; (2) Environmental threats: include crowding, congestion, waiting time, emissions, and pollution, which deter visitors from cities; and (3) Social threats: include the relationship between tourists (tourism industry) and citizens (community). Furthermore, previous research recently investigated the motivations for consumers to book Airbnb accommodations. However, the proposed study takes an alternative approach and looks at the problem from the suppliers’ perspective. By doing so, it aims to help the hospitality industry in Vienna by identifying the key determinants of Airbnb demand and by quantifying their respective contributions in terms of demand elasticities. From these results, management recommendations for the hospitality industry can be derived.
Moreover, another level of analysis will be added to the current study with the purpose of investigating the competitive standing of Vienna among the best performing European cities in terms of the Airbnb offers. This will be done by conducting an efficiency analysis. The sample will include all major European cities that are competitors of Vienna as a tourist destination. The results will include the overview of efficient and inefficient cities, benchmarking partners, as well as virtual benchmarks in order to account for the heterogeneity among the cities. The major outcome of this analysis lies not only in identifying the best practice cities, but also in pointing toward the areas for improvement and the actual benchmarking partners for the inefficient ones. And in doing so, giving Vienna a chance to properly utilize its respective inputs and consequently become (even) more competitive within the Airbnb offer.