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The sharing economy has changed the face of travel

December 17, 2015
ToursbyLocals.com led the way to butchers Rosita Cariani and Marco Biagetti at Macelleria Tagliavento in Bevagna, Italy.
Small-group walking tour in Lisbon with Viator.com

Small-group walking tour in Lisbon with Viator.com (Credit: Jerome Levine)

In a phenomenon dubbed the “sharing economy” or “peer-to-peer marketplace,” Americans are traveling in ways that were virtually unheard of a decade ago. They’re vacationing at the homes of strangers, driving (and being driven) around cities in other people’s cars and exploring destinations with the people who live there.

Elisa Dias of Congers, N.Y., has rented apartments with Airbnb for family vacations with her husband, 20-year-old daughter and 14-year-old son in Paris, Amsterdam and London. “We appreciated having a kitchen and living room where we could unwind and spend time together, she said. “While more expensive than one hotel room, it cost less than two.”

“We like to get a flavor of local life,” Dias added. In Amsterdam, the family shopped in a local market and used bikes to get around. “The owners generously shared information about their neighborhoods, especially restaurants and public transportation,” she said. On each trip, the family hired local guides from ToursbyLocals (www.toursbylocals.com), whom Dias described as “people who loved their cities.”

ToursbyLocals.com led the way to butchers Rosita Cariani and Marco Biagetti at Macelleria Tagliavento in Bevagna, Italy.

ToursbyLocals.com led the way to butchers Rosita Cariani and Marco Biagetti at Macelleria Tagliavento in Bevagna, Italy (Credit: Jerome Levine)

Launched in 2008, Airbnb (www.airbnb.com) is the largest player in the growing home-sharing niche: Anyone who hasn’t already used Airbnb or been a host probably knows someone who has. The company has matched more than 60 million guests and hosts in more than 34,000 cities or towns in over 190 countries.

In 2011, 1 in 10 U.S. travelers rented all or part of someone else’s private dwelling (a house, apartment or condo). That proportion rose to a staggering 1 in 4 by 2014, according to data from industry research firm Phocuswright.

“We’ve seen rapid growth not only in Airbnb but also in other home-rental businesses such as Booking.com (an online travel agency owned by Priceline) and Homeaway (www.homeaway.com),” said Douglas Quinby, vice president for research. “More and more travelers are considering rentals as an accommodations option planning their leisure trips.”

“Internet technology and the ubiquitousness of tablets and smartphones have been game changers,” said Jon Gray, chief revenue officer at Homeaway. “Someone who had a second home to rent in Destin, Fla., used to have to place an ad in the Atlanta newspaper,” he said. “Now it’s just as easy to rent it to someone from London.”

Visiting the British Museum in London on a walking seminar with Context Travel (Credit: Context Travel)

Visiting the British Museum in London on a walking seminar with Context Travel (Credit: Context Travel)

Quinby of Phocuswright sees these changes as indicators of just how mainstream private accommodations are becoming in the travel industry. “And while it may be the most high-profile example of the sharing economy, by no means is it alone,” he said. A nationwide consumer survey conducted jointly by the Travel Technology Association and the Internet Association reported that in 2015, nearly half of all Americans (46 percent) participated in one or more aspects of the sharing economy.

Other examples:

Services such as Uber (www.uber.com) and Lyft (www.lyft.com) are connecting passengers with drivers, posing challenges to a struggling taxi industry. FlightCar (www.flightcar.com), Turo (www.turo.com) and Getaround (www.getaround.com) are peer-to-peer services that enable travelers to rent cars from private owners. Via (www.ridewithvia.com) and Bandwagon (www.bandwagon.io) allow travelers (and commuters) to share rides in taxis and chauffeured vehicles.

Once travelers have reached their destinations (in addition to ToursbyLocals, the group used by Dias), a bevy of companies such as Context Travel (www.contexttravel.com), Viator (owned by TripAdvisor) (www.viator.com), Your Local Cousin (www.yourlocalcousin.com) and Vayable (www.vayable.com) have emerged to help tourists experience what truly makes a place unique.

“Tourists want to get off the cattle car,” said Paul Bennett of Philadelphia-based Context Travel, a company he co- founded with his wife 13 years ago. “They want to break down barriers between themselves and the places they’re visiting. Beyond seeing monuments, they want to share experiences with people who live there and learn about their customs and culture,” he said.

Last year Context booked 10,000 individuals or small groups (fewer than six people) for walking seminars in 37 large cities across the globe. The company matches travelers with expert “docents,” a carefully chosen network of local graduate students and scholars, including art historians, writers, architects and gastronomes.

The Gatehouse to Ayton Castle in Eyemouth, United Kingdom (Credit: Airbnb)

The Gatehouse to Ayton Castle in Eyemouth, United Kingdom (Credit: Airbnb)

Similarly, travelers who are food enthusiasts have embraced the concept of social dining. Online platforms like PurpleDinner (www.purpledinner.com), Meal Sharing (www.mealsharing.com), Bonappetour (www.bonappetour.com) and EatWith (www.eatwith.com) enable tourists to eat home-cooked meals (at a minimal cost per person) and simultaneously get an insider’s glimpse at the homes of their hosts.

“Homes” don’t always have to be houses or apartments. There are Airbnb-type businesses for boaters too. With boats sitting in marinas with only infrequent use, GetMyBoat (www.getmyboat.com) collected an inventory of more than 40,000 boats in 143 countries — from kayaks to 150-foot yachts — available for rent or charter.

Although early adopters were largely tech-savvy young people, the demographics of sharing have become more ecumenical. “Unlike other emerging technologies, the peer-to-peer economy is distributed across all ages,” said Steve Shur, president of the Travel Technology Association.

Users run the gamut from budget to luxury. Couchsurfing (www.couchsurfing.com) is a community of 12 million members who sleep on other people’s couches or in spare bedrooms at no charge. At the other end of the spectrum are affluent travelers who “share” multimillion-dollar homes without the risks and costs of solo ownership. They are buying into private vacation clubs like Exclusive Resorts (www.exclusiveresorts.com), Inspirato with American Express (www.inspirato.com) and Quintess (www.quintess.com).

Summerinitaly.com ranges up and down the economic scale from affordable to virtual palaces, some of the most breathtaking being along the Amalfi Coast.

Wealthy travelers also are purchasing fractional shares and usage of jets in hourly increments from NetJets (www.netjets.com), Flexjet (www.flexjet.com), Sentient Jet (www.sentient.com) and Wheels Up (www.wheelsup.com).

With air travel, it doesn’t stop there. Technology has fundamentally altered the possibilities of matching underutilized resources with demand. Data science company Boxever surveyed 500 travelers about the future of air travel and found 40 percent would consider on-demand, in-flight services from other passengers such as massages, manicures/pedicures and business training, if they were made available.

AcCape Cottage 200 steps from the Bay in East Sandwich, MA (Credit: Airbnb)

AcCape Cottage 200 steps from the Bay in East Sandwich, MA (Credit: Airbnb)

Many see the growth of the sharing economy as a win-win scenario for travelers as well as for those who own assets. It offers cost savings as well as improved access to a wider array of options. “The trend is not exclusively economic,” said Chip Conley, head of global hospitality and strategy at Airbnb. “It also appeals to our need for social belonging, allowing travelers to understand and make connections with people from all over the world.”

This seismic shift in the way we travel isn’t without naysayers. Critics contend it drives up housing costs, diminishes the character of neighborhoods and poses a competitive threat to existing segments of the travel industry (especially hotels and taxis). Also troubling, regulatory safeguards for consumers and liability issues haven’t been fully addressed. In addition, online review systems that allow owners and consumers to vet one another are helpful but imperfect.

Marina Krakovsky, author of The Middleman Economy (Palgrave Macmillan, 2015), points out that the term “sharing economy” itself may be a misnomer. “As soon as money enters the picture, you’re no longer sharing. You’re engaged in market transactions with a middleman making it all work — facilitating search, handling payment and instilling trust in both buyers and sellers,” she said.


[This article by Irene S. Levine was previously published online in the Chicago Tribune, and Florida Sun Sentinel on December 16, 2015, and appeared in the Sunday print edition of the Tribune on January 3, 2016. It was also syndicated in the Palm Beach Post, Seattle TimesStars and Stripes, Stripes OkinawaFremont Tribune (NE), GazetteXtra, RepublicanAmerican (CT), Fredericksburg.com (VA), Pocono Record (PA) and Government Technology.]

  • Reply
    Sand In My Suitcase
    December 17, 2015 at 11:31 am

    Excellent article! We weren’t aware of how much travelers are turning to “ordinary” locals for travel experiences. We like the idea of dining at a local person’s home – to taste true, local, home-cooked food, but also to gain invaluable insight about the local economy, political situation, etc. (That, as the credit card ads say, would be “priceless”) All of these sharing experiences should help us build connections with people in other countries and understand the world better :-).

    • Irene S. Levine
      Reply
      Irene S. Levine
      December 17, 2015 at 5:28 pm

      Some of the nicest experiences we’ve had while traveling is being able to forge connections with the people we meet!

  • Reply
    Debi Lander
    January 11, 2016 at 6:30 am

    Irene,
    An excellent and useful article.I am using Airbnb for many of my stays in Europe. Haven’t heard of some of these and will give them a try. Thanks!

    • Irene S. Levine
      Reply
      Irene S. Levine
      January 13, 2016 at 11:19 am

      These new businesses have really opened up new opportunities for travelers of all ages.

  • Reply
    jenny@atasteoftravel
    January 11, 2016 at 8:39 am

    A very interesting article Irene. I was unaware that this \’changing\’ way of travel is being called the sharing economy. I feel it is more natural progression from those that are wanting and have always wanted more from travel than group tours and ticking off major sites. The internet has definitely played its part making it easier for everyone to access now. I wonder what\’s next!

    • Irene S. Levine
      Reply
      Irene S. Levine
      January 13, 2016 at 11:22 am

      It’s also called “disruptive” because it does have ramifications for more conventional travel businesses.

  • Reply
    Kay Dougherty
    January 11, 2016 at 10:12 am

    Wow – this piece is full of excellent resources! I’m going to have to bookmark it because I think I’ll come back often. I haven’t used Airbnb or even Uber yet but am planning to try them both this year and the site for places in Italy will be getting a click from me as soon as I sign off here! Thanks for all of the useful information.

  • Reply
    Karen Warren
    January 11, 2016 at 11:29 am

    I’ve heard a lot about the “sharing economy” with respect to travellers, but my only experiences so far are using AirBNB and Uber a couple of times. AirBNB in particular was fantastic – much better accommodation in nicer places than ordinary hotel rooms, and I look forward to trying some more.

    • Irene S. Levine
      Reply
      Irene S. Levine
      January 13, 2016 at 11:29 am

      I’m actually trying my first Airbnb rental this spring. Looking forward to it! It seemed like an especially great option for traveling with friends.

  • Reply
    Donna Janke
    January 11, 2016 at 1:00 pm

    The Interent has certainly changed travel and travel planning. This article is a great list of resources. I’ve not used AirBNB yet, I have successfully used Homeaway. I think agree that the term “sharing economy” doesn’t always apply.

    • Irene S. Levine
      Reply
      Irene S. Levine
      January 13, 2016 at 11:32 am

      Absolutely right, Donna. There is usually a middleman taking a cut of the profit for their work.

  • Reply
    The GypsyNesters
    January 11, 2016 at 8:57 pm

    Great article, thanks! We have used Airbnb a few times and had good luck with it, also had a good experience with home exchange. Haven’t tried social dining yet, but it looks interesting too.

    • Irene S. Levine
      Reply
      Irene S. Levine
      January 13, 2016 at 11:36 am

      The thing that’s best about social dining is getting to know the host in-vivo!

  • Reply
    Suzanne Fluhr
    January 12, 2016 at 1:04 am

    Great article, Irene and congrats on having it syndicated. I’ll be furthering its reach by sharing it on my Boomeresque FB page. Our wandering Millennial son pretty much exclusively uses Air B’nB for accommodations and Uber for local transportation. When he owned a condo in South Beach, he more than paid for his plane ticket home for Thanksgiving one year by renting out his place on Air BnBfor the time he was gone.

    • Irene S. Levine
      Reply
      Irene S. Levine
      January 13, 2016 at 11:39 am

      Thanks for the share, Suzanne! Yes, the sharing economy probably started with millennials who are introducing it to our parents. Our son uses it often, too!

  • Reply
    Charles McCool
    January 13, 2016 at 12:23 pm

    I have done many VRBO, Airbnb, and apartment rentals, and they have all been superior to area hotels. More space and amenities, lower price.

  • Reply
    Vicki Winters
    January 15, 2016 at 8:24 pm

    All great things…..But Wait… What? 40 percent would consider on-demand, in-flight services from other passengers such as massages, manicures/pedicures and business training, if they were made available? Somehow I can’t picture the pedicure mess/smell happening in COACH….I’d like to have some Yoga classes on board as long as we’re fantasizing.

    • Irene S. Levine
      Reply
      Irene S. Levine
      January 17, 2016 at 10:51 am

      Of course, they would have to do those in the onboard spa:-)

  • Reply
    Carol Colborn
    January 17, 2016 at 11:48 am

    Excellent article on a key trend in travel although I cannot believe we haven’t used any of these!Except our timeshare ownerships which started it all, I guess. It allows for owning week(s) inventory of plush resorts all over the world. The concept has just been extended across all tiers of lodging!

    • Irene S. Levine
      Reply
      Irene S. Levine
      January 17, 2016 at 11:50 am

      It’s great that you’ve made such good use of your timeshares! That isn’t always the case.

  • Reply
    Janice Chung
    January 17, 2016 at 1:59 pm

    Well done on having the article published in so many places. Really comprehensive article with a lot of research behind it. Interesting how things have changed with websites like Expedia, Booking.com and even Tripadvisor where more and more listings are not just hotels but rather “apartments” and “vacation rentals”. And now, it’s meals, transportation…..hmmm…wonder what will be next.

    • Irene S. Levine
      Reply
      Irene S. Levine
      January 17, 2016 at 2:00 pm

      I agree that this seems like just the beginning. There are so many more start-ups in other dimensions of travel.

  • Reply
    Patti Morrow
    January 17, 2016 at 4:50 pm

    I love Uber and public dining. I haven’t really done much with vacation rentals, but I’m open to it. Couch surfing… not so much. 🙂

    • Irene S. Levine
      Reply
      Irene S. Levine
      January 17, 2016 at 5:36 pm

      Agree, a comfortable bed is important to boomer travelers!

  • Reply
    alison abbott
    January 18, 2016 at 9:09 am

    What a great overview of the sharing economy. It’s amazing to see the many changes taking place. I especially like the idea of social dining and have seen quite a few variations on the theme. It allows for such a great connection with locals and a much more experiential and authentic meal.

  • Reply
    Nathalie
    January 20, 2016 at 12:09 am

    Great article, I think it’ll be interesting to see the long term effects of a sharing economy.

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