THE CASE OF AIRBNB IN VIENNA Master Thesis

166 Pages·2016·3.14 MB·English

by  Thomas Schüssler

THE IMPACT OF THE SHARING ECONOMY
ON A CITY: THE CASE OF AIRBNB IN VIENNA

Master Thesis

submitted at the
IMC Fachhochschule Krems
(University of Applied Sciences)

Master-Programme

„Tourism and Leisure Management“

by
Elisabeth SAILER

for the award of the academic degree

Master of Arts in Business (MA)

Thesis Coach: Christian Maurer, Mag.

Submitted on: 22.04.2016
Statutory Declaration

“I declare in lieu of an oath that I have written this master thesis myself and
that I have not used any sources or resources other than stated for its
preparation. I further declare that I have clearly indicated all direct and indirect
quotations. This master thesis has not been submitted elsewhere for
examination purposes.”

Date: 22 04 2016 Elisabeth SAILER

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Abstract English
The sharing economy has been growing exponentially since 2008 which – if not
regulated – leads to friction with competitors and local authorities. This thesis sets
out to estimate the impact of the sharing economy’s accommodation sector on a
city by using Airbnb in Vienna as an example. It should be clarified which effects
Airbnb has on hotels and on the city’s economy. Furthermore, the characteristics
of the apartment guest, the motivations for choosing an apartment and the most
important criteria an apartment should meet from a guest’s point of view are identi-
fied.
To address the research problem, the literature is reviewed and a quantitative re-
search design is applied. An online survey among Viennese guests is conducted
to gather the necessary data. In addition, five experts in the field of shared ac-
commodation in Vienna are interviewed.
The results indicate that Airbnb guests stay longer in the destination and are more
likely to spend money on groceries than hotel guests. International travellers book
Airbnb more frequently than domestic tourists. The main motivator to book an
Airbnb apartment is price (more affordable) but other motivators like social factors
and the availability of amenities like kitchen and living room also play a role. The
thesis concludes with recommendations for the stakeholders.

Keywords: Sharing Economy, Airbnb, Vienna, Accommodation

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Abstract German
Die Sharing Economy ist seit 2008 exponentiell gewachsen. Das führt – wenn es
keine klaren Regelungen gibt – zu Konflikten mit Wettbewerbern und Behörden.
Ziel dieser Arbeit ist es, die Auswirkungen des Unterkunftssektors der Sharing
Economy auf die betroffene Stadt, am Beispiel von Airbnb in Wien, zu schätzen.
Es soll herausgefunden werden, welchen Effekt Airbnb auf Hotels und die lokale
Wirtschaft hat. Außerdem werden die Charakteristika des Apartment-Gastes, die
Motivation, ein Apartment zu buchen und die wichtigsten Kriterien, die ein Apart-
ment aus Sicht des Gastes haben sollte, beleuchtet.
Zur Beantwortung der Fragestellung wurde einerseits themenspezifische Literatur
aufgearbeitet und andererseits ein quantitativer Forschungszugang gewählt. Eine
Online-Umfrage unter Wien-Gästen wurde durchgeführt um die nötigen Daten zu
sammeln. Zusätzlich wurden Experteninterviews mit fünf Fachleuten auf dem Ge-
biet Sharing (bei Unterkünften) in Wien geführt.
Es zeigte sich, dass Airbnb-Gäste länger bleiben und eher gewillt sind mehr Geld
für Lebensmittel auszugeben als Hotelgäste. Internationale Gäste buchen Airbnb
öfter als Inlandsreisende. Der Hauptmotivator um eine Airbnb-Unterkunft zu bu-
chen ist der Preis (Airbnb-Unterkünfte sind billiger), aber andere Motivatoren wie
soziale Faktoren und das Vorhandensein von Küche und Wohnzimmer spielen
ebenfalls eine Rolle. Die Arbeit wird abgerundet durch Empfehlungen für die Sta-
keholder.
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Table of Contents
Statutory Declaration ............................................................................................. II
Abstract English .................................................................................................... III
Abstract German .................................................................................................. IV
Table of Contents ................................................................................................. V
List of Illustrations .............................................................................................. VIII
List of Tables ....................................................................................................... IX
List of Abbreviations .............................................................................................. X

1 Introduction .................................................................................................. 1
1.1 Importance of the Topic and Practical Application ..................................... 1
1.2 Initial Situation and Research Problem ...................................................... 2
1.3 Goals ......................................................................................................... 4
1.4 Research Questions and Method .............................................................. 4
1.5 Structure of the Thesis .............................................................................. 5
2 Explanation of the Major Concepts Used ..................................................... 6
2.1 The Sharing Economy ............................................................................... 6
2.1.1 Defining the Sharing Economy ................................................................ 6
2.1.2 Drivers of the Sharing Economy.............................................................. 8
2.1.3 Business Models in the Sharing Economy ............................................ 12
2.1.4 Motivations to Participate in the Sharing Economy ............................... 12
2.2 Private Accommodation........................................................................... 15
2.3 Airbnb ...................................................................................................... 15
2.3.1 Company History .................................................................................. 16
2.3.2 The Business Model ............................................................................. 17
2.4 The Holiday Decision-Making Process .................................................... 18
3 Similarities and Differences between Hotel and Airbnb Accommodation .... 22
3.1 Legal Regulations and Safety .................................................................. 22
3.1.1 Income Tax and Value Added Tax ........................................................ 24
3.1.2 Tourist Taxes and Destination Management Fees ................................ 25
3.1.3 Compulsory Registration ....................................................................... 25
3.1.4 Insurance .............................................................................................. 26
3.2 Service .................................................................................................... 26
3.3 Price ........................................................................................................ 27
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3.4 Booking Process and Cancellation Policies ............................................. 28
4 Vienna as a Tourist Destination ................................................................. 30
4.1 Accommodation Structure ....................................................................... 30
4.2 Tourist Structure ...................................................................................... 31
4.3 Tourism Strategy ..................................................................................... 32
4.4 The Role of Airbnb in Vienna ................................................................... 33
5 Possible Opportunities and Threats for the Stakeholders in Vienna ........... 36
5.1 Airbnb Guests ......................................................................................... 36
5.1.1 Opportunities ........................................................................................ 36
5.1.2 Threats ................................................................................................. 37
5.2 Airbnb Hosts ............................................................................................ 38
5.2.1 Opportunities ........................................................................................ 38
5.2.2 Threats ................................................................................................. 39
5.3 Hotels and Other Accommodation Providers ........................................... 39
5.3.1 Opportunities ........................................................................................ 39
5.3.2 Threats ................................................................................................. 40
5.4 The City of Vienna ................................................................................... 41
5.4.1 Opportunities ........................................................................................ 41
5.4.2 Threats ................................................................................................. 43
5.5 Overview ................................................................................................. 44
6 Methodology .............................................................................................. 45
6.1 Research Questions ................................................................................ 45
6.2 Model and Hypotheses ............................................................................ 45
6.3 Secondary Research ............................................................................... 47
6.4 Qualitative Research ............................................................................... 47
6.5 Quantitative Research ............................................................................. 48
6.5.1 Purpose ................................................................................................ 48
6.5.2 Population ............................................................................................. 48
6.5.3 Sample ................................................................................................. 48
6.5.4 Research Instrument: Questionnaire ..................................................... 49
6.5.5 Pretesting ............................................................................................. 52
6.5.6 Data Collection ..................................................................................... 52
6.5.7 Data Analysis ........................................................................................ 53
7 Results and Discussion of Findings ........................................................... 54
7.1 Composition of the Sample ..................................................................... 54
7.2 Effects on Existing Hotels ........................................................................ 55
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7.2.1 Consideration of Competitors ................................................................ 55
7.2.2 Airbnb Loyalty and Recommendation Rate ........................................... 56
7.2.3 Chosen Accommodation Type .............................................................. 56
7.3 Effects of Airbnb Accommodation on the City’s Economy........................ 62
7.3.1 Length of Stay ....................................................................................... 62
7.3.2 Attitude on Expenses ............................................................................ 64
7.3.3 Holiday Expenses ................................................................................. 66
7.4 Characteristics of the Airbnb Apartment Guest ........................................ 74
7.5 Motivation to Book an Airbnb Apartment ................................................. 75
7.6 Important Criteria for Choosing an Airbnb Home ..................................... 78
8 Conclusions and Recommendations .......................................................... 81
9 Limitations and Outlook for Further Research ............................................ 89
List of References ................................................................................................ 91
Appendix ............................................................................................................ 100

VII
List of Illustrations
Figure 1: Airbnb Company History ....................................................................... 16
Figure 2: General Decision-Making Process ........................................................ 18
Figure 3: Airbnb Search ....................................................................................... 28
Figure 4: Map of Airbnb Listings in Vienna in 2015 .............................................. 34
Figure 5: Planned Actions in Vienna .................................................................... 35
Figure 6: Model of Influencing Factors ................................................................. 46
Figure 7: Questionnaire Structure ........................................................................ 50
Figure 8: Consideration of other Accommodation Providers................................. 55
Figure 9: Previous Airbnb Usage (Including the Trip to Vienna) ........................... 56
Figure 10: Accommodation Choice and Age ........................................................ 57
Figure 11: Accommodation Choice and Income ................................................... 58
Figure 12: Accommodation Choice and Occupation ............................................ 59
Figure 13: Accommodation Choice and Trip Purpose .......................................... 60
Figure 14: Accommodation Type and Length of Stay ........................................... 62
Figure 15: Tourists’ Origin and Length of Stay ..................................................... 63
Figure 16: Travel Company and Length of Stay ................................................... 63
Figure 17: Statements to Test Attitude on Expenses ........................................... 64
Figure 18: Motivation to Book an Airbnb Apartment ............................................. 76
Figure 19: Reasons for Booking Airbnb................................................................ 76
Figure 19: Reasons for Booking Airbnb................................................................ 77
Figure 20: Reasons for not Booking Airbnb .......................................................... 77
Figure 21: Criteria for Choosing an Airbnb Home ................................................. 78
Figure 22: Criteria for Choosing an Apartment and Age ....................................... 79
Figure 23: Criteria for Choosing an Apartment and Nationality ............................. 80

VIII
List of Tables
Table 1: Types of Guest Room Rental ................................................................. 23
Table 2: Rooms and Beds in Viennese Hotels in October 2015 ........................... 30
Table 3: Arrivals, Bednights and Length of Stay in Different Accommodation ...... 31
Table 4: Possible Opportunities and Threats of Airbnb in Vienna ......................... 44
Table 5: Distribution of Respondents ................................................................... 53
Table 6: Attitude on Expenses and Accommodation Type ................................... 65
Table 7: Airbnb's Effects on a City’s Economy ..................................................... 66
Table 8: Expenses for Different Holiday Components per Accommodation Type . 67
Table 9: Total Holiday Expenses per Accommodation Type ................................ 68
Table 10: Accommodation Expenses ................................................................... 68
Table 11: Accommodation Expenses in different Accommodation Types............. 70
Table 12: Correlation Between Age and Daily Expenses ..................................... 71
Table 13: Occupation and Holiday Expenses per Day ......................................... 71
Table 14: Private Room vs. Whole Apartment ...................................................... 75
Table 15: Price as a Motivator to Book Airbnb ..................................................... 76

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List of Abbreviations
ADR ...................................................................................... Average Daily Rate
B2C ................................................................................. Business to Consumer
BA ............................................................................................... Bachelor of Arts
Bakk. Phil. .................................................................. Baccalaureus philosophiae
C2C ............................................................................... Consumer to Consumer
CD ................................................................................................. Compact Disk
e.g. ............................................................................. exempli gratia (for example)
FH .................................................... Fachhochschule (University of Applied Sciences)
GPS ............................................................................ Global Positioning System
ICT ..................................................Information and Communication Technology
ID ..................................................................................................... Identification
i.e. .....................................................................................................id est (that is)
MA ............................................. Magistratsabteilung (municipal authority department)
Mag............................................................................................ Magister (Master)
max. ..................................................................................................... maximum
min. ....................................................................................................... minimum
n ..................................................................................... number of respondents
N ....................................... number of responses (for multiple-answer questions)
ÖHV .................... Österreichische Hoteliervereinigung (Austrian Hotelier Association)
RevPAR ................................................................. Revenue per Available Room
SD ......................................................................................... Standard Deviation
SPSS ................................................ Statistical Package for the Social Sciences
TSA ............................................................................. Tourism Satellite Account
UK .............................................................................................. United Kingdom
URL ............................................................................ Uniform Resource Locator
US ............................................................................. United States (of America)
vs. ............................................................................................................. versus
WAVV ........ Wiener Apartmentvermieter Vereinigung (Viennese Apartment Host Ass.)
Wi-Fi .......................................................................................... Wireless Fidelity
WIFO ............... Wirtschaftsforschungsinstitut (Austrian Institute of Economic Research)
WWW ....................................................................................... World Wide Web

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