Tourism and the Sharing Economy: Policy & Potential of Sustainable Peer-to-Peer Accommodation Photo Credit: Unsplash - Manuel Moreno - Encuentro Guadalupe, El Porvenir, Mexico. © 2018 The World Bank Group Rights and Permissions 1818 H Street NW The material in this publication is copyrighted. Copying Washington, DC 20433 and/or transmitting portions or all of this work without Telephone: 202-473-1000 permission may be a violation of applicable law. The World Internet: www.worldbank.org Bank encourages dissemination of its work and will normally This volume is a product of the staff of the World Bank Group. grant permission to reproduce portions of the work promptly. The World Bank Group refers to the member institutions of For permission to photocopy or reprint any part of this the World Bank Group, include The World Bank (International work, please send a request with complete information to Bank for Reconstruction and Development), the International the Copyright Clearance Center Inc., 222 Rosewood Drive, Finance Corporation (IFC), and the Multilateral Investment Danvers, MA 01923, USA; telephone: 978-750-8400; Guarantee Agency (MIGA), which are separate and distinct fax: 978-750-4470; Internet: www.copyright.com legal entities, each organized under its respective Articles of Agreement. We encourage use of this publication for All other queries on rights and licenses, including educational and noncommercial purposes. subsidiary rights, should be addressed to the Office of the Publisher, The World Bank Group, 1818 H Street NW, The findings, interpretations, and conclusions expressed Washington, DC 20433, USA; fax: 202-522-2422; email: in this volume do not necessarily reflect the views of the pubrights@worldbank.org Directors or Executive Directors of the respective institutions of the World Bank Group or the governments they represent. This report was written by Martine Bakker and Louise The World Bank Group does not guarantee the accuracy of Twining-Ward, with contributions from Jose Ernesto the data included in this work. Cordova Lopez, Stefan Gössling, Wendy Li, Hermione Nevill, April Rinne, Talia Salem, Raha Shahidsaless, and Damien Shiels. The authors acknowledge the helpful contributions of World Bank Peer Reviewers and the World Bank Global Tourism Team. Send feedback to tourism@worldbankgroup.org Table of Contents EXECUTIVE SUMMARY 6 RECOMMENDATIONS FOR SUSTAINABLE Context 7 P2P ACCOMMODATION 42 Key Insights 8 Step 1: Conduct a Rapid Diagnostic Assessment 42 Glossary 11 Step 2: Establish Government Interventions and Standards 42 INTRODUCTION 12 Step 3: Offer Training, Digital Skills, Defining Peer-to-Peer (P2P) Economy 13 and Mobile Banking Support 43 Research Aims 13 Step 4: Implement Product Development, Methodology and Research Context 13 Marketing, and Monitoring 45 SIZE OF THE P2P ACCOMMODATION ECONOMY 14 THE KNOWLEDGE GAPS 46 Factors Driving the Growth of the P2P Accommodation Economy 15 CONCLUSION AND NEXT STEPS 47 COMPONENTS OF THE P2P APPENDIX: RAPID DIAGNOSTIC CHECKLISTS 48 ACCOMMODATION ECONOMY 16 The Platforms 16 SOURCES CITED 50 The Providers 19 The Guests 22 THE P2P ACCOMMODATION ECONOMY: OPPORTUNITIES AND CHALLENGES 24 Opportunities for the Destination 24 Challenges for the Destination 28 THE P2P ACCOMMODATION ECONOMY IN JAMAICA 33 Tourism in Jamaica 33 P2P Accommodation 34 Key Takeaways 40 Photo Credit: Unsplash - Rob Bye - Lanzarote, Spain. 4 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION LIST OF FIGURES Figure 1. Four Steps toward Sustainable P2P Accommodation 9 Figure 2. Growth of Airbnb Guest Arrivals in “Low-” and “Lower-Middle-Income” Countries, 2014–2017 15 Figure 3. The P2P Accommodation Ecosystem 16 Figure 4. TripAdvisor Rentals Listing Distribution, 2017 19 Figure 5. Homestay.com Bookings by Geographic Region of Provider, 2016 and 2018 20 Figure 6. Percentage of Airbnb Hosts Renting Their Primary Residence, 2015 22 Figure 7. Typical Tourism Value Chain 25 Figure 8. Number of Airbnb Listings in Jamaica, by Type, 2014–2017 34 Figure 9. Map of Jamaica 36 Figure 10. International Arrivals and Airbnb Guests in Jamaica, by Resort Area, 2017 36 Figure 11. Top Countries for International Arrivals and Airbnb Guests in Jamaica, by Market Share, 2017 37 Figure 12. Four Steps toward Sustainable P2P Accommodation 42 LIST OF TABLES Table 1. Main Digital Platforms for Accommodation Exchanges 17 Table 2. Homestay.com Revenue by Country of Listing, 2017 20 Table 3. Homestay.com Providers by Gender, 2017 21 Table 4. Homestay.com Distribution of Age of Providers, 2017 21 Table 5. Top 10 Opportunities and Challenges of P2P Accommodation from the Literature 24 Table 6. P2P Accommodation Listings for Main Platforms in Jamaica (April 2018) 34 Table 7. Opportunities and Challenges of P2P in Jamaica 40 5 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION Executive Summary Disruptive technologies are fundamentally changing the nature of our world. Developments in digital platforms, artificial intelligence, blockchain, robotics, driverless cars, and smart cities are disrupting the way the tourism sector operates from end to end—impacting the way destinations facilitate tourism, develop product, gather data, access markets, and attract visitors. This disruption has ripple effects across the tourism industry and affects low-income markets striving to leverage tourism for development impacts. Digital platforms have a particularly significant impact on the tourism sector. They provide both opportunities and challenges for World Bank Group client countries looking to harness tourism to help achieve the World Bank Group’s twin goals of ending extreme poverty and boosting shared prosperity. This report focuses on one disruptive force in the tourism industry: the emergence of peer-to-peer (P2P) accommodation. P2P accommodation occurs when individuals offer, in exchange for money, a room or an entire house for short-term accommodation. The rapid growth of this new product is shaking up the hotel industry and creating a new way to travel and interact with a destination and its community. The objectives of this report are to investigate the opportunities and challenges that P2P provides in developed and emerging destinations and to offer a set of recommendations to better use this new business model for sustainable and inclusive tourism. The report also sketches a research agenda for the near future. This report is written for destination managers, policymakers, and World Bank Group staff involved in the design and management of tourism operations. It is based on desk research, interviews with digital platform managers, and an in-depth study of the case of Jamaica. Photo Credit: Unsplash - H Fall - Fira, Thera, Greece. 6 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION Context Travel and tourism comprise one of the largest and during, and after a trip and can influence the choices that job-rich service industries in the world. There were 1.2 future consumers will make; the owners of the platforms billion international travelers in 2017, and it is estimated are also empowered by this new forum. New opportunities that there will be 1.8 billion travelers by 2030. Tourism have emerged for ordinary residents to participate in the accounts for nearly 10% of the global workforce, generates tourism value chain. What is broadly known today as the needed foreign exchange, and has a wide and inclusive value “sharing economy” has expanded accommodation options chain that includes farmers, craftspeople, and rural workers; and scaled up the age-old practice of staying in people’s it also provides comparative advantages for women seeking homes. Although homestays have existed for as long as employment. Accommodation is the largest subsector of people have traveled, technological innovations have the tourism industry; there are an estimated 115 million made it possible for individuals to offer rooms to a global beds in traditional commercial forms of accommodation,1 marketplace of consumers. This innovation has had a ripple which include everything from full-service, all-inclusive effect throughout the tourism and hospitality industry, resorts (which may be destinations in themselves) to shared challenging traditional tourism offerings and adding another rooms (which may be just a place to sleep). layer of intricacy to an already complex sector. The tourism industry is increasingly driven by In 2018, P2P accommodation makes up about 7% of technology. Indeed, online travel agencies (OTAs), such as accommodation globally, or roughly 8 million beds. Expedia, TripAdvisor, Ctrip (now Trip.com), and The Priceline The projected annual growth rate for global P2P Group (now Booking Holdings), have played a big role in accommodation is estimated at 31% between 2013 and shaping the current state of travel search and booking. 2025, six times the growth rate of traditional bed-and- The availability of digital tools that help travelers plan, book, breakfasts and hostels. This growth is not spread evenly: it and share their recommendations with others has also appears to be stabilizing in some more mature markets and created a new set of challenges for those responsible for accelerating in emerging markets. However, these numbers managing and marketing destinations. Power has shifted are regarded as overestimating the impact of the sector, to travelers and the platforms that own the data. Travelers given that occupancy rates are extremely low, with most can now share opinions with a global audience before, providers receiving fewer than 20 bookings per year. 7 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION Key Insights This report makes the following contributions to The key benefits of the P2P accommodation sector knowledge about P2P accommodation: for emerging economies are the expansion of tourism product, service, and sector offerings; improved access 1. It provides a comprehensive review of the pros and cons of P2P for destinations. to market; and opportunities for income generation. 2. It explores the pros and cons through a study The results from Jamaica show support for the idea that P2P in Jamaica and provides the country with some can help diversify tourism geographically, cater to festivals considerations for action. and events without new construction, attract new markets, 3. It recommends a four-step approach for destinations and broaden the product offering. There is evidence that to manage P2Ps. P2P accommodation is linked to increased domestic and Diaspora tourism. The study also revealed that a majority of A road map for future research and a set of three hosts are women, although it was not possible to tell how diagnostic checklists are also provided to help destination many bookings are made with women or how much women managers further build their understanding. earn compared to men. The research found that P2P was not The report shows there are both opportunities and as socio-economically inclusive as expected; despite having challenges for destinations when managing P2P. There a diversity of hosts, almost half of all hosts are not actively are strong lobbyists and advocates on both sides as the subject receiving bookings. Hosts in poor neighborhoods struggle has become a politicized issue. Whether the costs outweigh to get bookings, whereas those in wealthy neighborhoods the benefits will depend on the unique circumstances of the thrive—deepening the divide. destination and on how governments respond with policies, regulations, and so on. The diagnostic checklists in the Appendix are designed to assist with the assessment of these circumstances. Photo Credit: Unsplash - William Rouse - Phuket, Thailand. 8 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION Case studies from elsewhere in the world reveal some This report suggests four steps toward more of the development challenges of P2P, which include sustainable development and management of P2P regulation, competition, licensing, taxation, affordable accommodation. Each step is explored in some depth housing, noise, and security concerns. Not all these with considerations for destination managers. The aim is dimensions could be analyzed in depth in this report, to ensure that P2P is successful without compromising the but that work will be continued in the future. For the most quality of life of residents or putting visitors at risk. part, regulation has not kept up with the growth and changing dynamics of P2P accommodation. This makes it Each destination’s needs, vision, goals, and motivations more difficult for destination managers to plan, develop, for engaging in P2P may be quite different. In some, and manage capacity for the whole destination. Key concerns the goal may be diversification from sun and sea; in others, in Jamaica are loss of tax revenue, and real and/or perceived the goal may be supplemental income opportunities for risks to visitor safety, and destination reputation from inferior marginalized groups. New destinations without sufficient quality and low standards. Destination managers have hotels may want to actively promote P2P as a stopgap demonstrated a variety of responses to P2P, depending on solution. Cities suffering from overtourism and housing the stage of development of tourism and number of visitors. shortages may need stringent rules and regulations Some have issued sudden adverse policy changes, while to prevent the overuse of P2P for short-term stays. others are embroiled in legal battles with P2P platforms. Mature destinations may face fewer capacity and digital All could benefit from better information and transparency access hurdles than developing destinations, owing to on the scale, scope, and key issues. their higher education and infrastructure levels. The report Harnessing P2P for sustainable and inclusive tourism provides broad recommendations for destination managers involves careful management of policy challenges, to help ensure the sustainable development of P2P so that destinations can achieve their development vision accommodation.a while not jeopardizing the quality of life of destination communities. Figure 1. Four Steps toward Sustainable P2P Accommodation 01 02 03 04 Rapid Policy, Training, Product diagnostic planning, digital skills, development, assessment standards and mobile marketing and and taxation banking monitoring a This study was prepared by the World Bank Group and falls under the World Bank Group corporate agenda on disruptive technologies. Other complementary components of this work in tourism include a series of pilot studies on P2P accommodation and research on the impact of user-generated content (UGC). Wherever possible, independently verified data sources and peer-reviewed analysis have been used. Where industry information was used, this is clearly noted. Most of the data for the Jamaica case study were provided by Airbnb. This is acknowledged. Additional sources of data were provided by TripAdvisor Rentals, Booking.com, and Homestay.com; these contributions are also acknowledged. No digital platform providers were involved in the planning, preparation, writing, review, or production of this report. The views expressed are exclusively those of the authors and do not represent an official World Bank position on P2P accommodation. 9 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION Photo Credit: Homestay.com - Bali - Guest and Host, Jasmine and Made Rai. 10 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION Glossary These definitions were adapted from a variety of Monetized or commercial home sharing Short-term sources for the purposes of this report. They are not accommodation service that generates an economic benefit designed to be universal. beyond the recovery of costs of sharing and takes place frequently or systematically. Collaborative economy Information and communication technology (ICT)-based platforms that coordinate exchanges Non-monetized home sharing Short-term accommodation in the form of consumption, production, and learning. service that is provided by a host free of charge for the guest. Digital platform Online applications that allow participants On-demand economy A digital marketplace offering to interact with each other and that can facilitate immediate access to goods and services that are often transactions of assets, services, or both. delivered by contractors, freelancers, or independent workers. Digital matching firms Entities that provide online Online travel agency (OTA) An online company that allows platforms (or marketplaces) that enable the matching of customers to book various travel-related services, such as transportation and accommodation. service providers with customers. Overtourism The condition of destinations where locals, Gig economy A labor market characterized by the businesses, or visitors feel there are too many visitors and prevalence of short-term contracts or freelance work, as that the quality of life in the area or the quality of the tourist opposed to permanent jobs. experience has deteriorated unacceptably. Homestay tourism A travel experience during which Peer-to-peer (P2P) When two individuals interact to visitors pay to stay in private homes in order to interact with exchange goods and services directly with each other, a host or local family. without intermediation by a third party. Host A person or company who offers a room or an entire P2P accommodation economy People providing property for temporary stays. accommodation directly to consumers, using digital platforms. Host-present rental A rental where the host is present Primary residence The house or apartment where the during the stay of the guest; this implies that the rental is for owner or tenant usually lives: their main home. one or more rooms and not the entire home. P2P accommodation provider A person or company who Inclusion The process of improving the terms for individuals offers a room or an entire property for temporary stays. and groups to take part in society. Sharing economy Sharing of underutilized assets and Listing A property included on a P2P accommodation services, monetized or not, between private individuals, digital platform. Listings may consist of entire homes, using an online platform. apartments, private rooms, or shared spaces. Super-platforms Platforms that have a central position in Meta-platform Platforms that compare the offers of the accommodation market, acting as quasi-monopolies, other platforms. or without significant competition. 11 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION Introduction Digital platforms, part of the fourth revolution, other businesses. People who previously had no experience are disrupting the way the tourism sector is run in the tourism industry can now offer their spare rooms or from end to end—impacting the way destinations vacation house to a global audience. P2P accommodation facilitate tourism, develop product, gather data, access also can expand or collapse inventory efficiently. This may markets, and attract visitors. One prominent disruptor be particularly useful in the case of an event, crisis, or other is the digital platforms that facilitate peer-to-peer short-term accommodation need. Furthermore, digital accommodation. There are an estimated 8 million beds technology could vastly reduce the cost of collection, in peer-to-peer (P2P) accommodation. Although this storage, computation, and transmission of data about how is a still a small part of the global accommodation (7%) travelers behave.3 it is growing faster than traditional accommodation. P2P accommodation also presents challenges to The P2P accommodation economy is composed of people destination managers trying to plan, develop, and who provide accommodation directly to consumers using manage the quantity, reputation, quality, and safety of digital platforms. the whole destination. A growing number of destinations Digital technology platforms have made it easier for around the world are suffering from overtourism, an effect of people to share and monetize their underutilized assets. the increasing number of people who are traveling. Limiting The projected annual growth rate for the global peer- the number and location of accommodation permits to-peer accommodation economy is estimated at 31% is one way that destination managers have managed between 2013 and 2025, six times the growth rate of capacity within acceptable limits. In destinations where traditional bed-and-breakfasts (B&Bs) and hostels.2 Digital P2P accommodation is not registered, the rapid rise of P2P platforms make it simpler and cheaper for individuals to offer accommodation has left managers without this control accommodation and other services to a global marketplace mechanism and without a clear understanding of the size of consumers without setting up a website or needing to and distribution of the P2P accommodation sector within formalize their business. Before the Internet, offline peer-to- their destination. This affects their ability to plan for growth, peer home-sharing and room rentals existed for centuries. collect taxes, manage quality standards, and address B&Bs would promote their offering using road signage complaints of noise and pressure on local housing markets. and listings in local travel guides. Digital platforms now It has also given rise to concerns about visitor and host safety. offer both the marketplace and payment systems, making The perceived competition of P2P accommodation with it possible for individuals to offer rooms or entire homes the hotel market is a particular challenge, as many tourist as tourist accommodation directly to consumers without boards receive funding and other kinds of destination-level needing to build a website or collect payments directly. support from hotels. The availability of new accommodation options also makes Destination managers have demonstrated a variety of it easier for travelers to find more affordable, flexible, and responses to P2P accommodation, depending on the local accommodation options, which were previously off the stage of development of tourism. Some have welcomed radar of online travel agencies (OTAs), visitor information and encouraged it, others are in legal battles to ban P2P centers, and guidebooks, or did not exist at all. accommodation partially or completely, and many are The rapid growth of peer-to-peer accommodation undecided. Solutions are even more urgent now that P2P presents both opportunities and challenges for growth is accelerating in emerging markets where tourist destination managers. Destinations that were previously accommodation and the tourism sector in general is often held back by lack of accommodation options can now less regulated and prepared for the potential influx of expand. Day trips to villages can become overnight visits, additional tourists. New questions have arisen relating to providing more visitors for local restaurants, shops, and standards and safety, along with opportunities for increased 12 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION economic impact from tourism and greater inclusion of Research on P2P accommodation intends to address these women and disadvantaged communities. Information is main questions: critical in a time of such change and uncertainty so that wise • What are the size, scale, and growth rate of the P2P decisions can be made in the best interests of destination accommodation economy? communities. • How do consumers of the P2P accommodation economy differ from conventional tourists? Defining Peer-to-Peer Economy • What are the development opportunities emerging from the P2P accommodation economy? The sharing economy refers to individuals offering their • What are the good practices for addressing challenges— underutilized assets to others using digital platforms: including mechanisms such as standards, registration, “the peer-to-peer based activity of obtaining, giving or monitoring, data sharing, regulation, and taxation—that sharing the access to goods and services, coordinated can be applied to developing destinations? through community-based online services.”4 The sharing • What are the gaps in knowledge, and what should a economy is also referred to as the “collaborative economy”, future research agenda look like? the “gig economy”, or the “platform economy”, and includes many different sectors, ranging from selling art to providing Methodology and Research Context home maintenance services run by an increasing number of independent “gig workers”, or microentrepreneurs. This study is based on a mix of desk research, data analysis, case studies, field studies, and qualitative interviews The sharing economy is the original term for gig with platform representatives. As the first World Bank activities that centered on the sharing of underutilized research into this subsector, the research in exploratory, assets. Now, however, the offerings promoted on the aiming to formulate and identify problems for further analysis largest tourism digital platforms go far beyond sharing in the coming years. The objective is to raise awareness underutilized assets to include accommodation that is about the pros and cons of P2P accommodation and provide owned solely for short-term rental, sometimes from owners policymakers with some preliminary recommendations on who are businesses. The result is that the term “sharing the way forward. The only primary research undertaken were economy” has rather lost its meaning in this sector. interviews with P2P accommodation providers and a small- scale survey, both undertaken in Jamaica. This report focuses instead on the peer-to-peer (P2P) economy, which refers to temporary stays in entire homes, This study has therefore not sought to compare the direct economic impact of hotels versus P2P apartments, private rooms, or shared rooms. The home or accommodation. Instead, it examines P2P accommodation room may be the primary or secondary residence of the in the context of the World Bank’s twin goals: the elimination provider/owner, and he or she may be present or temporarily of extreme poverty and the boosting of shared prosperity. absent. When travelers rent a room in a host-present home it is referred to as a homestay. Some of the data used in this report have been provided directly by the following platforms: Airbnb, Booking.com, Homestay.com, and TripAdvisor Rentals, while other data Research Aims were retrieved from secondary reports. Data provided directly The World Bank Group is engaging in multisector from the platforms cannot be verified so they should be research on the development impact and potential of considered indicative. disruptive technologies and their business models; this None of these platforms that shared data participated includes testing their application to address development in the writing or reviewing of this report. Independent challenges and examining how to develop scale-up research has been included where possible, but this is a fast- modalities. Part of this approach focuses on developing and moving field with few available academic studies. Where sharing knowledge with client countries and technology unverified industry data has been included, it has been companies alike. identified as such. 13 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION Size of the P2P Accommodation Economy The P2P sector is growing and changing quickly the platform in the past 12 months, but it also showed and independently. Global data on the size of the P2P that the rate of growth has slowed from 7.9% in 2015 accommodation economy is limited. Two studies stand out. to 3.3% in 2017.7 Increased regulation and negative First, a 2017 independent study by Mastercard estimated press are reasons cited for the slower growth of supply. the total value of transactions on the P2P accommodation For example, the amount of P2P accommodation in Berlin, economy to be US$75 billion. The study forecasts the market Germany, and Santa Monica, California, dropped by 49% will almost double to US$139 billion by 2020.5 Second, work and 37% respectively after governments introduced stricter by the World Economic Forum predicts that by 2025, 17% regulations and fines.8 of the global hotel sector’s annual revenues, or US$8 billion, will be in short-term rentals (now 7%).6 Emerging markets are new growth centers for P2P accommodation. Data received from Airbnb showed After experiencing high growth rates over the last five that the number of guests in low-income and lower- years, growth in P2P accommodation now appears middle-income countriesb,c has increased by 1,160%, from to be slowing in mature markets. P2P accommodation 323,100 in 2014 to more than 4 million in 2017. Much of platforms were initially most popular in mature destinations this growth can be attributed to high growth in Indonesia, where digital access and travel frequency are the highest. From 2017 onward, however, P2P accommodation appears which received 940,000 Airbnb guests; the Philippines, to be stabilizing both from a demand and supply perspective. which received 980,000 Airbnb guests; and India, which A 2017 study of 4,000 U.S., U.K., French, and German adult received 480,000 Airbnb guests; all in 2018. In 2017, China consumers by financial services company Morgan Stanley received 3,290,000 Airbnb guests, which resulted in a 268% asked about consumers’ awareness of the digital platform year-on-year growth rate. Similar patterns are seen in data Airbnb; awareness had reached 80% in mature markets, provided by Homestay.com, which is seeing fast growth in which resulted in limited incremental growth of demand. revenue in Cuba, Japan, Iran, Brazil, the Republic of Korea, The survey showed that in 2017, 25% of travelers had used Argentina, South Africa, India, Mexico, Singapore, and China. b As defined by the World Bank Group, https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups c Middle East and North Africa: Djibouti, Egypt, Jordan, Morocco, Syria, Tunisia, West Bank and Gaza, Republic of Yemen. Sub-Saharan Africa: Angola, Benin, Burkina Faso, Burundi, Cabo Verde, Cameroon, Central African Republic, Chad, Comoros, Côte d’Ivoire, Democratic Republic of Congo, Eritrea, Ethiopia, the Gambia, Ghana, Guinea, Guinea-Bissau, Kenya, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Niger, Nigeria, Rwanda, São Tomé and Príncipe, Senegal, Sierra Leone, Somalia, South Sudan, Sudan, Swaziland, Tanzania, Togo, Uganda, Zambia, Zimbabwe. South Asia: Afghanistan, Nepal, Bangladesh, Bhutan, India, Pakistan, Sri Lanka. Europe and Central Asia: Armenia, Georgia, Kosovo, Kyrgyz Republic, Moldova, Tajikistan, Ukraine, Uzbekistan. East Asia and Pacific: Cambodia, Democratic People’s Republic of Korea, Indonesia, Kiribati, Lao People’s Democratic Republic, Timor-Leste, Solomon Islands, Federated States of Micronesia, Mongolia, Myanmar, Papua New Guinea, Philippines, Vanuatu, Vietnam. Latin America and the Caribbean: Bolivia, El Salvador, Guatemala, Haiti, Honduras, Nicaragua. 14 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION Figure 2. Growth of Airbnb Guest Arrivals in “Low-” and “Lower-Middle-Income” Countries, 2014–2017 2,500,000 2,360,000 2,000,000 1,500,000 1,000,000 642,800 500,000 394,400 314,800 163,000 197,800 0 Middle East & Sub-Saharan South Asia Europe and East Asia Latin America North Africa Africa Central Asia & Pacific & Caribbean 2014 2015 2016 2017 Source: Created by World Bank Group using data provided by Airbnb. Note: “Low-” and “Lower-Middle-Income” as defined by the World Bank Group. Factors Driving the Growth of the P2P 6. Guest and provider two-way reviews have helped increase the level of “stranger trust” required from Accommodation Economy both provider and guest. The online rating systems on 1. The number of people traveling is increasing annually. platforms have been referred to as “new forms of private Whereas travel was once a luxury, it is now regarded regulation” because they offer insights into service, as a necessity. More people are traveling for business, quality standards, and amenities.14 pleasure, education, health, sports, and family than ever 7. Growing interest in more authentic experiences before. In 2017, there were 1.2 billion international by travelers is driving the demand for nontraditional travelers, and it is estimated that there will be 1.8 billion accommodation and closer connections to host by 2030.9 This means more demand for accommodation, communities.15 transport, restaurants, and all the services that provide In addition to these trends, traditional accommodation for travelers’ needs. providers are entering the P2P accommodation market. 2. Low-cost airline carriers allow a much broader Hotel brands are starting to broaden their offerings in order socioeconomic group to travel. Low-cost carriers to maintain their market share, leading to increased vertical have enabled lower- and middle-income consumers, market integration. For example, in April 2018, Marriott larger families, and groups to travel. These travelers are International announced a six-month partnership with more diverse than ever before and may not be interested Hostmaker, a London-based rental management company. in standard hotel rooms. According to this provider, 200 homes in London are now 3. OTAs such as Expedia, Booking.com, and Trip.com available for guests under Marriott’s Tribute Portfolio brand.16 have helped consumers feel more confident in booking travel reservations online rather than using As this subsector has evolved, the difference between travel agents. OTAs represented 39% of the U.S. online P2P platforms and online travel agents, such as Expedia travel market in 2016.10 and Booking.com, is diminishing. What in the beginning 4. Mobile technologies and digital banking make were very different offerings, one from private individuals, the on-the-go reservations and mobile payments other from commercial operators, are becoming more similar. possible. Nearly 2.4 billion people were estimated to For example, the platform Airbnb lists hotel rooms, second be smartphone users in 2017.11 Mobile phone bookings homes, and formal bed-and-breakfasts (B&Bs) on its site and account for a quarter of all hotel bookings.12 allows boutique hotels and B&Bs to have real-time room 5. Digital technology has lowered the search, track, rates and availability linked to a hotel’s property management and verification costs of booking accommodations. system.17 Similarly, OTAs like TripAdvisor and Booking.com The lower search costs have made it easier to find niche are now offering apartment rentals and homestays.18 In April products and have facilitated discovery of relatively 2018, Booking.com announced that, out of its total of 27 unknown products. It has also meant that a platform million listings, 5 million are homes, apartments, homestays, can be more effective in promoting specific listings to and other unique lodgings. Now that the differences between target markets. The lower cost of verifying identity OTA and P2P platforms are becoming smaller, P2P hosts and reputation has supported transactions between should be identified by the accommodation type and not only strangers who do not have a public reputation.13 by the platform they use to access the market. 15 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION Components of the P2P Accommodation Economy The P2P accommodation economy is made up of three • Airbnb collects a 3% commission from providers and a parts: the digital platform, the accommodation provider, 6–12% service fee from guests. The guest must pay the and the guests. The platform provides the technology that entire amount (rental fee and transaction fee) up front; allows the guests to search for and find a provider in their the platform then pays the provider after the guests travel destination, to communicate with the provider, and, have arrived. in most cases, to book and pay for the stay. These digital • Homestay.com at the time of booking charges the guest matching firms are an online marketplace.19 They mediate a 15% transaction fee that goes to the company and between the consumer and the service provider and charge is also used to secure the booking. The guest pays the a usage fee to either provider or guest, or to both. rental fee directly to the provider before or upon arrival using cash, a bank transfer, or PayPal. The Platforms • HomeAway charges guests a service fee of 5–12%; the provider can choose between a pay-per-booking fee Digital accommodation platforms can be broadly (minimum of 8% per booking) or an annual subscription fee divided into three different models: that ranges between US$349 and US$499. Guests can pay 1. P2P accommodation. The provider charges a rental the providers directly or through the HomeAway system. fee and the guest either pays it directly to the provider • Booking.com charges a transaction fee of between (for example, Homestay.com) or the fee is channeled 12–17% to the providers only; the guests pay no fee. through the platform (for example, Airbnb). In addition, The guest pays the rental fee to the provider at check-in. the platform collects a transaction fee from either the A hold on the credit card at the time of booking is applied provider, the guest, or both. only if the provider has a cancellation policy. Figure 3. The P2P Accommodation Ecosystem Digital Platform Re com nt m Ac al is n s sio inu fe ssi co o e on iss m m ffe R pl Re od r m e r eq us ffe m l fe qu at ue O es co ta io stt n n s Re Sharing of asset Review Provider Guest 16 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION 2. Reciprocal accommodation exchanges. These are 3. Free accommodation. This is an offer of accommodation home swaps in which one party stays temporarily in with no charge or obligation to either party: Free the home of another, and vice versa. The exchange is accommodation exchanges refer to those in which one facilitated through a platform and there is no rental fee. party visits another without a rental fee or direct reciprocal The platforms charge a transaction fee to both users. interest. The main platforms, such as Couchsurfing This can be per transaction or a flat fee regardless of and WarmShowers, do not charge a transaction or usage; for example, the home-swapping company a membership fee. Free accommodation platforms HomeExchange charges US$150 for a 12-month combined may comprise 500,000 beds. period. The largest reciprocal platform GuestToGuest’s This report is focused on the first model: P2P transaction fee is 3.5% of the deposit. The deposit is held accommodation where the provider receives a rental fee in by the platform until after the exchange ends; it is set by exchange for providing accommodation. the providers of the properties. Table 1. Main Digital Platforms for Accommodation Exchanges Platform Founded Listings Geographical spread Guest stays P2P accommodation Booking.com 1996 5 million* 226 countries n/a Airbnb 2008 4.85 million 191 countries 200 million guests total HomeAway (owned by Expedia)** 2005 2 million 190 countries n/a TripAdvisor Rentals*** 2009 830,000 200 countries n/a Tujia 2011 300,000 China n/a 9flats.com 2011 250,000 140 countries n/a Homestay.com 2013 50,000 160 countries 750,000 room nights total OYO Rooms 2013 8,500 India 40 million room nights total Onefinestay (owned by AccorHotels) 2009 2,500 United States, Europe, n/a Australia Xiaozhu 2012 250,000 China n/a Reciprocal accommodation exchanges GuestToGuest 2011 280,000 197 countries n/a Love Home Swap (owned by Wyndham) 2009 100,000 140 countries n/a HomeExchange 1992 67,000 150 countries 135,000 home swaps (2016) (owned by GuestToGuest) Free accommodation exchanges Couchsurfing 2004 400,000 200,000 cities 4 million guests per year hosts Trustroots 2014 6,000 hosts n/a n/a WarmShowers 1993 61,000 hosts 161 countries n/a BeWelcome 2007 35,000 n/a n/a members Sources: Platform websites as of December 2017. * Booking.com has a total of 27 million listings, of which 5 million are classified as alternative or non-hotel accommodation. ** The HomeAway portfolio includes HomeAway.com, VRBO.com, and VacationRentals.com *** The TripAdvisor Rentals portfolio includes FlipKey, HolidayLettings, HouseTrip, Niumba, and Vacation Home Rentals. 17 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION The growth in the P2P accommodation economy 2 million accommodation listings. TripAdvisor Rentals has has brought with it market consolidation and the 830,000 listings worldwide; most of them are entire homes or emergence of super-platforms. While the emerging apartments. In comparison, Marriott International, which is platforms might at first foster more competition in the the world’s largest hotel company, provides 1.2 million guest tourism sector at large, to the benefit of final consumers, rooms.27 Reciprocal platform GuestToGuest offers 400,000 the presence of “network effects” may eventually result properties, including the inventory of HomeExchange, in a few platforms concentrating traffic for most users, which they acquired in 2017. The total number of beds in ultimately curtailing competition in the P2P segment. reciprocal forms of accommodation may be on the order As research by Kansai University in Japan shows, the more of 500,000. Couchsurfing remains the largest platform for users these platforms have, the better their algorithms free accommodation exchanges, with 400,000 hosts and become, and the better these platforms can monetize and 4 million surfers per year. WarmShowers and BeWelcome target their services.21 Artificial Intelligence, particularly also provide platforms that help users connect. All forms of machine-learning, has accelerated data-driven network free accommodation combined may comprise 500,000 beds. effects through enabling automatic analysis of big data.21 Most of the larger P2P accommodation platforms This information flow can then make it very difficult for any provide limited hands-on or phone assistance for new new entrant to compete against an incumbent with a large providers. Onboarding is generally done using an onboarding base of customers. Market power is therefore driven by module or widget, which guides new providers through the network effects, which are further deepened by the ability sign-up process and provides guidance on competitive price of super-platforms to leverage big data through machine setting. After completing the sign-up process, the listings learning. P2P accommodation platforms so far remain are in most cases published directly without review. There largely untouched by antitrust/competition policies, as is generally no assistance available to those without digital traditional approaches might not be best suited to address literacy. Smaller platforms, such as Homestay.com, check each the challenges posed by the new disruptive technologies. new listing to see if the proper photos have been uploaded, Moreover, in the wake of the European Commission’s if prices are in line with the location, and if the description is General Data Protection Regulation legislation,22 there is sufficiently detailed. Homestay.com representatives establish increasing discussion of who should have final ownership of a back-and-forth liaison with the host to get all the details the data that the digital platforms collect.23 correct, and only then will publish the listing. Areas of particular legal concern are data sharing, The level of support for providers therefore depends consumer protection, and legal jurisdiction. Legal on the platform. Support is generally structured around scholar Toshiaki Takigawa of Japan’s Kansai University scalability, and there is very limited onsite support. Most explains that the collection of big data itself is not illegal, platforms have online help centers where providers can find but excluding competitors through misuse of big data might tips and advice regarding how best to optimize their profile amount to violation of the competition law.24 The European and improve their hosting skills. These systems are set up Commission has raised concerns about consumer protection with the goal of limiting direct communication via email as well as fair and transparent pricing. For example, Airbnb’s or phone. Airbnb has set up a Community Center platform current pricing model has recently been found not to where hosts and guests can find answers to questions and comply with the European Commission’s Unfair Commercial can connect using discussion forums. TripAdvisor Rentals Practices Directive, the Unfair Contract Terms Directive, and offers a resource center where rental owners and property the Regulation on the jurisdiction in civil and commercial managers can find tips on managing a property. Airbnb and matters.25 If, for example, disabled riders complain about not Booking.com both have regional managers who can provide being able to access an Uber or an Airbnb, the companies support for specific situations. can respond that they are not taxis or hotels, they are just Despite these innovations, there are very few platforms.26 It is outside the scope of this report to explore opportunities for the hands-on training needed to this area in more detail, but further discussion can be found assist more vulnerable populations in accessing these in the articles referenced. platforms. Where training has occurred, the difficulty is in Market consolidation is also seen in emerging how to scale and sustain it. Nongovernmental organizations economies. For example, the budget hotel and on the ground have been one solution. Airbnb has been accommodation network OYO started in India and has involved in training hosts in India through SEWA (see box on expanded to China, Indonesia, Maylaysia, and Nepal. p. 21) and in South Africa through Open Africa (see box on Homesharing platforms Xiaozhu and vacation rental p. 44). In 2017, Booking.com and the Asia Foundation trained platform Tujia are both active in China. In addition, many family guesthouses and homestays located on The Loop in smaller platforms operate on a global, national, or regional Laos on the basics of online booking platforms and guest level. Airbnb now offers 4.85 million listings in 65,000 cities readiness. Further work is needed in this area to support and 191 countries. HomeAway, which includes VRBO, offers low-income groups in accessing digital platforms. 18 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION The Providers leading location of listings, followed by Europe. The bookings and revenue from Homestay.com, which lists only host- The United States and Europe appear to be the leading present accommodation, show a wider geographic spread. markets in terms of the number of providers of P2P accommodation. Data on the geographic spread of listings When Europe, the United States, and Canada are excluded, provided by TripAdvisor Rentals, which specializes in vacation Cuba, Japan, Iran, and Brazil are the countries that generate homes and apartments, shows that the United States is the the highest revenue in bookings for Homestay.com. Figure 4. TripAdvisor Rentals Listing Distribution, 2017 Region of Listing, 2017 Country of Listing, 2017 Europe (58%) United States (25%) North America (28%) Other (22%) Asia (5%) Italy (13%) Caribbean (3%) Spain (11%) South America (2%) France (9%) South Pacific (2%) Croatia (6%) Africa (2%) United Kingdom (5%) Central America (1%) Portugal (3%) Greece (2%) Mexico (2%) Australia (2%) Source: Created by the World Bank Group using data obtained from Trip Advisor Rentals. 19 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION Figure 5. Homestay.com Bookings by Geographic Region of Provider, 2016 and 2018 50 47 47 45 40 36 Percentage of total 35 33 30 25 20 15 13 9 10 6 6 5 1.4 0.9 0.5 0.4 0 North Europe Asia Australia South Africa America America 2016 2018 Source: Homestay.com Table 2. Homestay.com Revenue by Country of Listing, 2017 Ranked by absolute revenue Ranked by absolute revenue (excluding the United States, Canada, Europe, and Australia) 1. United Kingdom 1. Cuba 2. Ireland 2. Japan 3. Cuba 3. Iran 4. United States 4. Brazil 5. Canada 5. Republic of Korea 6. Australia 6. Argentina 7. Spain 7. South Africa 8. Japan 8. India 9. New Zealand 9. Mexico 10. France 10. Singapore 11. Italy 11. China Source: Homestay.com P2P accommodation providers appear to be listings. If they in fact have fewer listings or less profitable predominantly female, according to platform data. listings, it would be reasonable to assume that, despite their The Airbnb platform reports that women make up more predominance, women may still, on average, be earning than 55% of accommodation providers. This does not less than men as P2P providers. For Homestay.com, women necessarily mean, however, that women are earning more make up 64% of the providers; women outnumber men as than men on the platform. Airbnb reports that they have 1 million women providers, but there are 4.85 million providers on this platform in all world regions except Africa, listings. More data is needed to assess whether in fact where they represent 47% of all providers, and Asia, where women are as likely or less likely than men to have multiple they represent 37%. 20 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION Table 3. Homestay.com Providers by Gender, 2017 Ranked by absolute revenue Male Female Africa 53% 47% Asia 63% 37% Australia 24% 76% Europe 27% 73% North America 30% 70% South America 38% 62% Source: Homestay.com Providing Income Opportunities for Women Hosting attracts seniors. Homestay.com reports that 28% of all their providers are under 34 years old, 49% are India: The Self-Employed Women’s Association of India between 35 and 54 years old, and 23% are 55 years and (SEWA), an organization registered in 1972, represents older. Initially, Airbnb reported that most of their providers 2 million poor, self-employed women living mostly in rural were young people familiar with digital platforms, but now areas. According to SEWA, 94% of the female labor force the platform is reporting an increase in older providers.28 in India is in the informal sector. SEWA began partnering The platform reported that its fastest-growing demographic with Airbnb in 2016 to empower women to earn more is the 60-year-old or above group; this group now makes up through their homestay businesses. SEWA staff provided 13% of U.S. Airbnb hosts. In the African region, the average participant-paid training on hosting standards, digital age of the host is 43 years.29 literacy, and responsible hosting practices to 150 women hosts and also provides support on platform management. Table 4. Homestay.com Distribution of Age of Providers, 2017 They have developed and delivered training in intercultural understanding and safety. Still the most challenging factor, according to the Executive Director, is securing bookings. Age Percent of providers SEWA set a maximum of five hosts per village to avoid over- 18–24 6% capacity, and, in some situations, one woman manages 25–34 22% for others. As of November 2017, 50 guests have stayed 35–44 34% with SEWA hosts in Gujarat, where the first phase of the 45–54 25% project was located. The project has plans to expand into 55-64 17% northeast India. 65-74 5% Source: Sewa.org and interview with SEWA. 75+ 1% Source: Homestay.com 21 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION P2P platforms have expanded from single listings to The Guestsd super listings. When P2P platforms first launched, P2P Millennial guests dominate certain types of P2P accommodation providers mostly offered just one listing, accommodation. Sixty percent of all guests who book on usually a guest room in their primary residence when they Airbnb are between the ages of 18 and 35. In China, 83% of were traveling, or their vacation home. Now an increasing those booking on Airbnb are millennials.31 For Homestay.com, number of individuals or businesses are managing one or 52% of guests are age 18–35. However, the average age more properties that are available for short-term rental does vary by platform. A 2016 study by Pew Research Center year-round. These individuals and companies, known as noted that 42 is the median age across users of Airbnb, “super-listers”, manage the bookings and operations for HomeAway, VRBO, and similar services.32 A survey of 56,000 individuals who do not have the time or expertise to manage respondents across 30 markets by Booking.com compared the distribution of Millennials (1981–1996), Generation X their own listing. While this practice increases the potential (1965–1980), and Baby Boomers (1946–1964) who had employment impact of platforms, it is far from the original booked a home accommodation or not in the past 12 months. concept of “sharing” an underutilized asset. The results showed that the distribution of those who have P2P accommodation is expanding beyond offering booked home-type accommodations is significantly younger primary residences. Host-present accommodation was than those who have not. More data is needed to understand whether the higher adoption rate by millennials is due to the originally the bulk of the P2P offering. Now the percentage attractiveness of the P2P accommodation product for this of listings that are not considered primary residences vary by particular age group, or due to their overall higher usage of destination, but may be around 30% (see Figure 6).30 The high digital technology. It is also unclear whether the presence of proportion of primary residences in cities, such as Amsterdam P2P accommodations results in the expansion of this younger and New York City, can be linked to the strict rules that apply market or whether the existing market has simply shifted to short-term rentals that are not primary residences. from conventional to P2P. Figure 6. Percentage of Airbnb Hosts Renting their Primary Residence, 2015 100% 90% 80% Percentage of total 70% 60% 50% 40% 30% 20% 10% 0% Lisbon Rome Rio de Janeiro Japan Prague India Korea Cleveland Miami Barcelona Mexico City Oahu Berlin Washington, DC Australia Montreal Vancouver Austin Chicago Denver Los Angeles Amsterdam Boston New York City Copenhangen Source: Airbnb, Airbnb Citizen Data, 2015. d There are very few global independent studies of P2P guest characteristics. This is a new field and more research is needed to verify the considerations stated in this section. 22 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION Guests staying in P2P accommodation may travel in center, household conveniences, and the response time of the larger groups and stay longer. Financial services firm Airbnb host.37 The desire for authentic and local experiences Morgan Stanley’s survey of U.S. and European consumers was found to be an influential but not a deciding factor in found that travelers using P2P accommodation stay the case of P2P offerings.38 Results provided by Booking.com on average more nights in the destination than those based on a survey among their customers revealed that the in commercial accommodation.33 Research in Norway, largest difference between those who booked homes versus however, found the opposite.34 More research would be those who did not in terms of amenities is “self-catering needed to establish the drivers of these patterns, and facilities”. More price-conscious travelers may be attracted whether longer stays or shorter stays are confirmed in to self-catering accommodation because it can save them independent studies. money on restaurant meals. P2P guests seem to have higher than average P2P guests may spend more–or less. The consulting education and tend to travel more than the average. firm Deloitte estimated that the average Airbnb guests in An independent study of 754 U.S. travelers found that P2P Australia spent 1.6 times more per day than the average accommodation users earned a significantly higher income tourist. They found that 22% of their expenditure went and were more educated than non-P2P-user travelers.35 toward accommodation, while 27% was spent on food, 17% However, a 2017 study in Norway showed that Airbnb users on shopping, and 12% on leisure and entertainment. This reported a net income of €49,183 per year, whereas the spending, according to the research, directly contributes survey average was €58,942 per year.36 While higher income to the destination economy. The research did not indicate does not automatically lead to spending more per day or to the reason for the higher spending.39 Research in Norway a longer stay, it does lead to more trips. Further research is needed to help destinations understand their P2P market showed contrary results; hotel guests were found to spend and make more informed decisions. 40% more than P2P accommodation users.40 This suggests spending patterns are destination-specific and complex, Guests usually search for P2P accommodation by price. with multiple variables at play. Further research will be A survey of outbound travelers conducted in the United needed to identify possible patterns. States and Finland on the P2P accommodation economy suggested that lower accommodation prices expand Business travelers are a growing market. The digital respondents’ selection of destinations to visit (this was true platforms do not solely target leisure travelers. In 2017, for 67% of the respondents). Other motivators appear to be about 15% of all Airbnb bookings were for business purposes, number of beds, desire to self-cater, distance from the city and the company predicts that this will reach 30% by 2020.41 Women sharing dinner at a Community Homestay, Nepal. Photo Credit: CommunityHomestay.com - Nepal. 23 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION The P2P Accommodation Economy: Opportunities and Challenges The P2P accommodation economy is a source of Opportunities for the Destination income for people acting as providers, but it also has implications for providers’ neighbors, communities, Stimulates expansion of tourism product offerings policymakers, and other travel- and tourism-related 1. P2P accommodation can help to attract new businesses—all of which need to be understood by market segments and demographics to existing destination managers. Destination managers need and new destinations. Whenever accommodation information on the key opportunities and challenges that product offering changes, there is a potential arise from this type of accommodation. to create and capture new markets that are Based on the literature review and consultations looking for accommodation other than hotels. conducted during this research study, the main points For example, homes with a kitchen and multiple on either side of the debate are summarized in Table 5, bedrooms can attract families or other groups who might not be able to afford multiple hotel rooms, or followed by a summary of the current evidence base for might not use hotel services. Homestays can attract each point. This study is exploratory and therefore cannot travelers who are interested in authentic experiences. confirm or refute these statements; it simply raises the main The research in Jamaica, which is discussed more in the points and explores the existing evidence base. Areas for following section, showed a tendency of P2P to capture further research are explored at the end of the study. the domestic market. This area is particularly relevant to emerging destinations and should be researched further. Table 5. Top 10 Opportunities and Challenges of P2P Accommodation from the Literature Opportunities Challenges 1. Helps attract new markets and demographics to new 1. May be unregistered and unregulated. and existing destinations. 2. Influences the type and nature of visitor purchases 2. May not be following tax laws. and services. 3. Builds consumer trust to visit a destination in new ways 3. Can cause disturbances in a residential community. and try new products. 4. Lowers the barriers to entry for entrepreneurship. 4. May cause housing prices and rents to increase. 5. Supports homeowners and helps prevent displacement. 5. May put visitors at higher risk. 6. Enables the dispersion of tourists in a wider 6. May impact the job-intensive hotel sector. geographical area. 7. Increases access to market, which is particularly helpful 7. May benefit only a small minority. for community-based homestays. 8. Provides flexible inventory to meet the rise and fall of 8. Providers lack organization and representation. demand and assists in times of crisis. 9. Has a relatively small environmental footprint. 9. Contributes to the impact of “overtourism”. 10. Collects real-time data about visitors. 10. Internationally located P2P platforms divert income that would otherwise be earned locally. 24 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION 2. P2P accommodation influences the type and nature 3. P2P platforms can help build consumer trust to visit of visitor purchases and services. Figure 7 shows a destination in new ways and try new products. the typical tourism value chain that tourist spending In countries that lack international recognition as can impact. Research suggests that visitors who stay tourism destinations, global digital platforms with strong in P2P accommodation are more likely to rent a car to brands–such as Airbnb, Booking.com, and HomeAway– reach their accommodation than people who stay in an can reach markets and help brand a destination. all-inclusive hotel. Guests cooking for themselves are This may be particularly important in the case of more likely to frequent local stores and markets. Guests emerging markets where visitors may lack trust in who stay longer have more opportunities to take tours existing systems. The user reviews and other forms of and spread their spending to more areas. For example, user-generated content allow consumers to assess the Italian home-swappers on HomeExchange were found to be more active and to spend more time exploring, quality of the experience before they book. Emerging visiting museums, going on guided tours, or shopping destinations or those that are recovering from a crisis than other visitors.42 Understanding the P2P value chain can benefit from user-generated content (UGC), as is critically important and needs further destination- people tend to trust other people more than they trust specific research. official government reports or brands.43 Figure 7. Typical Tourism Value Chain Tourist Organization Excursions Transport Accommodation Shopping Entertainment of travel and activities Individual Excursion Cultural online booking Airlines Hotels and event Retail performances operators E.g. Expedia, TripAdvisor, Cruise lines B&Bs and Crafts Local guides Casinos hotel websites, lodges P2C rentals Car rental Short-term Restaurants Travel agent Music services rentals and bars Other Tour operator Other Theater transport Assets in tourist destinations (flora, fauna, environment, historical sites, communities) Source: Adapted from Inrate. 25 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION Supports local entrepreneurship to market for confirmed reservations. An assessment of 218 community-based tourism projects in Africa, most of 4. The P2P accommodation economy lowers the them located in rural areas, identified market access and barriers to entry for entrepreneurship. Formalization advertising as the two most frequently cited limitations and market access are frequently cited as barriers to to project sustainability.50 To fill this need, new startups inclusion. Digital platforms make it much easier for that digitally link P2P accommodation with guests have women, seniors, and people living in rural areas to appeared to solve this problem. Examples include Local participate in the global tourism value chain. For low- Alike in Thailand51 and Community Homestay Network income families, this additional income could make a in Nepal.52 significant difference. For example, according to an Airbnb publication, a typical Airbnb host in South Africa earns US$1,900 a year,44 which is 20% of the median annual salary in that country.45 Spotlight: Community Homestays in Nepal 5. P2P hosting supports homeowners and helps Nepal is home to a new social enterprise: Community prevent displacements. According to some observers, Homestay Network. An initiative of Nepalese tour and additional income may also make it possible for single trek operator Royal Mountain Travel, the organization offers parents, empty nesters, and older people to buy and homestays in 13 communities with a total of 180 families. maintain their residences, assist with repairs and home Community Homestay Network envisions empowering payments, and provide vital supplemental income.46 women in the rural communities of Nepal through tourism. However, many argue against this opportunity, Most women in Nepal are dependent on their husband’s concerned that homeowners may be displacing lower- salary for survival. Offering these women the opportunity income tenants in order to profit from short-term rentals. to host guests gives them economic independence. Women Both arguments may in fact hold, with supporters split operate more than 80% of the community homestays in between renters and owners. the network. Community Homestay Network has provided the entire infrastructure necessary for the women to Allows wider geographic dispersion of tourism host foreign guests, including mattresses and bathrooms. 6. P2P accommodation may enable the dispersion of Shiva Dhakal, managing director of Royal Mountain Travel tourists in a wider geographical area. Considerable and the founder of the Network, notes that “The long-term evidence suggests that P2P accommodation rentals goal of the organization is to become independent from can play a role in dispersing tourism accommodation the tour operators and channel all bookings directly to the over a wider geographic area. A New York University Network. We are listed on all the major platforms: Booking. study found that active Airbnb listings in New York City com, Airbnb, Expedia, and Homestay.com. However, it took were dispersed throughout 90% of the city, compared a long time to get reservations; but last month we received to the concentration of hotels within just 10% of census 20 reservations via Booking.com. We are working toward a tracts.47 Work in Iceland has also revealed the potential of future where potential guests will be able to communicate P2P accommodation to attract visitors to lesser-known and book directly with the hosts.” The communities received areas; it helped reduce the impact of overcrowding.48 a total of 3,904 guests in 2017, mostly originating from For example, even though the lesser-known city of Western Europe and North America. Currently, 92% of all Akureyri has only 13 hotels, it is now able to attract their bookings come from the travel trade: international visitors using P2P platforms. In rural areas of the United tour operators booking via Royal Mountain Travel. States, there are more P2P listings than hotel rooms The remaining 8% of bookings come via their website and (18.4% of active P2P listings versus 12.5% of hotel rooms P2P digital platforms. Community Homestay takes 15% of are in rural areas).49 This area is of particular interest for the fee as commission. The Community Homestay Network future research, given the importance of diversification then contacts the community, which selects the family that and shifting from places with overtourism to rural areas will host. The remainder of the fee is divided among the where income-generating opportunities are far fewer. host (80%) and the community (20%). The community fund is used to pay teachers’ salaries and to finance community 7. Digital platforms can increase access to market, improvements. which is particularly helpful for community-based homestays. A main challenge of community-based Source: Community Homestay Network, Nepal. tourism is finding, establishing, and sustaining access 26 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION Provides flexible inventory they are helping; they are responsible for matching and booking. This program is now expanding to include refugees 8. The P2P accommodation economy can provide and other displaced people through partnerships with flexible inventory to meet the rise and fall of demand nongovernmental organizations in France, Canada, Greece, and provides additional housing in crisis situations. Germany, Italy, Spain, and the United States. Hosts can P2P accommodation rentals typically have lower costs sign up for a special platform that approved international and higher operational flexibility than traditional hotels agencies can use to search for free temporary housing.58 and can more quickly increase supply in situations A similar initiative is the Room for Refugees network in the of higher demand.53 They can provide solutions for United Kingdom. This organization has more than 7,100 destinations hosting events that attract many visitors hosts registered in the United Kingdom and the United during a relatively short period of time. A World States and has provided more than 60,000 bed nights Economic Forum/Massachusetts Institute of Technology to refugees. study showed that during the 2016 Summer Olympic Games in Rio de Janeiro, 48,000 listings offered through P2P may be more environmentally sustainable Airbnb housed 85,000 visitors. These listings were the 9. The P2P model has a relatively small environmental equivalent of 257 additional hotels. P2P accommodation footprint in the destination. P2P accommodation rentals can also help alleviate the concerns surrounding rentals clearly provide an opportunity to use existing hotel overheads and occupancy rates after an event buildings instead of building new structures; they thereby ends, which can add a financial burden to the destination limit the built footprint and preserve historic buildings. if demand isn’t met.54 This strategy is especially effective in extremely sensitive natural areas or areas with a highly important cultural heritage. Independent research on environmental Large Events resource use is very limited, owing to the difficulty of During the 2016 Summer Olympic Games in Rio de identifying providers to survey. Based on their own Janeiro, Airbnb reported that their P2P providers earned survey of 8,000 providers, Airbnb stated that P2P guests more than US$30 million in income during the games. in Europe use 78% less energy, consume 48% less water, and produce up to 28% less waste compared with hotel A survey showed that 20% of Brazilians and 25% of foreign guests.59 Further research is needed to investigate this tourists opted to stay in short-term P2P accommodation subject in more detail, including emissions from travel, rather than in traditional accommodations.55 Airbnb also which may be higher for Airbnb because of the higher partnered with the government of Gangwon province in the likelihood of visitors using private vehicle transport to Republic of Korea to scale up listings in preparation for the 2018 reach their destination.60 Winter Olympics in Pyeongchang. According to the company, an estimated 9,000 guests stayed in P2P rentals during 10. P2P platforms collect real-time data and intelligence the games. Reservations averaged US$170 per night, about visitors. One of the benefits of digital platforms 70% cheaper than the price of a hotel room during that for destinations is their ability to collect data and glean period of time (US$460).56 insights on travelers in real time. Digital platforms can see, at an aggregate level, what travelers are searching for, what destinations they are considering, what kinds of accommodations and activities they are selecting, P2P platforms have also been able to connect hosts with their levels of spending, devices used for bookings, people who are temporarily homeless because of natural booking windows, whom they are traveling with, and or other types of crisis.57 In 2017, Airbnb launched the so on. However, this information is a benefit only if it platform Open Homes, where people can indicate that they is shared. If it is not shared, it can become the source of are willing to open their house to refugees or evacuees. The dispute about uncompetitive practices by the platform platform is free of commission and the hosts do not get paid. (see section The Platforms). Most of the providers are in the United States and Europe. In 2017, the platform had 6,000 listings; more than half of these listings were offered by people who were not previous P2P providers. Authorized nonprofits and relief agencies can use the platform to search for temporary housing for those 27 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION Challenges for the Destination Sri Lanka’s Emerging Accommodation Sector The rapid growth of P2P accommodation and other Tourism in Sri Lanka has surged from fewer than disruptive tourism innovations has also created half a million arrivals in 2008 to 2 million in 2016. destination challenges. Many of the challenges in the P2P The government now aims to achieve 5 million arrivals accommodation economy are related to the management by 2020. This tourism boom is met by two categories of of this segment of the economy and the actual or perceived accommodation: hotels and supplementary establishments, negative impact on quality of living for residents in the which include guesthouses, homestays, bungalows, and surrounding community. The most pressing concerns for other accommodation, many of which are now available destinations are the need for regulation (including a range online through Booking.com and Airbnb. The Sri Lanka of issues, from taxation to quality and safety assurance), Tourism Development Authority (SLTDA) estimates the impact of the segment on traditional accommodation that 25% of tourists opt to stay in homestays or similar providers, and the need to support wider inclusion by accommodations, making it an important part of the product. removing barriers to access. However, the SLTDA is also aware that many supplemental accommodations are not registered, are not inspected for Adaptation and enforcement of regulation hygiene, and are not paying the typical 28–32% tax levied on 1. P2P accommodation is often unregistered and registered accommodations. The government of Sri Lanka is unregulated. The growth and the quickly changing now examining ways to regulate and collect revenues from dynamics of P2P accommodation are often badly the informal sharing economy without constraining it, as it matched with existing destination regulations for plays an important role in generating income for residents.64 accommodation. Some regulations do not include the P2P sector at all; some are not applicable to the P2P sector; and others that do apply are not actively or effectively 3. P2P accommodation can cause disturbances in a enforced. The regulatory situation is complicated by residential community. Research from Melbourne, the fact that, in some countries, laws and legislation for Australia, showed that short-term renters in apartment accommodation are determined at the national level, complexes are three times more likely to be the subject whereas in others, state or municipal regulation may be of complaints about behavior than long-term residents.65 needed. Even when appropriate regulations are in place Entire residential properties that are rented out are to address the concerns of the municipality, these are more likely to cause issues that affect the neighbors difficult and often costly to enforce. Listings on digital than when a private room is rented out.66 Zoning laws platforms normally conceal full names and addresses, and land-use strategies may also be compromised which makes identifying and building cases against by P2P accommodation if residential neighborhoods violators costly and time-consuming. It is also difficult to become more transient zones and disrupt the sense of distinguish between private and commercial providers: community. City planning officials in many locations are the listings do not differentiate between private assets struggling to keep up, since not all zoning laws provide and conventional business providers.61 Furthermore, sufficient guidance on the legality of P2P accommodation most platforms do not share specific host information with city officials, because that would violate privacy rental activities. regulation agreements.62 Changes are beginning on this Housing prices and community front in New York City,63 and other cities may follow. 2. P2P accommodations may not be following tax laws. 4. P2P rentals may cause housing prices and rents Tax rules in many destinations are specifically designed to increase. A key complaint in large cities that are for hotels and other businesses offering accommodation already experiencing a shortage of affordable housing services. In addition, many P2P accommodation rental is that short-term rentals are pushing up housing costs providers are new to the sector and may be unaware and restricting the availability of apartments to rent or of the different tourism-related taxes. This results lease. This drives lower-income residents farther from in a financial loss for the destination, because when the city and worsens already tight housing markets. P2P accommodation increases the total number of Studies in the United States and Canada suggest that visitors, the destination needs to spend more on visitor the presence of Airbnb rentals raises housing prices infrastructure and services to maintain the destination. and lowers availability.67 A 2018 McGill University study For example, San Francisco officials estimate that lack commissioned by a hotel trade association of New York of regulation around P2P accommodation resulted in City estimated that between 7,000 and 13,500 units of losses of US$35 million in tourist tax in 2014. housing were removed from the city’s long-term rental 28 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION market to be rented out on Airbnb. This was estimated Homestay Standards in Thailand to increase the median long-term rent by 1.4% (or In 2005, the Ministry of Tourism and Sports in Thailand US$380).68 New York City has now banned short-term developed its first set of homestay standards. rentals of under 30 days in buildings where the host is They cover accommodation, food, safety, hospitality, not present.69 In Barcelona’s popular Historic District, tour programs, natural resources, culture, the creation of rents have increased by 23% in the last three years. value for community products (souvenirs), and homestay Similar concerns about the impact on affordable management. To qualify, homestay owners must: housing are the subject of new research in Cape • Sleep under the same roof as their guests Town, South Africa. Short-term rentals to tourists in • Have a maximum of four homestay rooms and 20 guests the city’s center are reportedly up to five times more at one time profitable than long-term rentals to residents, so • Register with the Department of Tourism property owners are making the shift.70 City regulators • Use the homestay as a supplemental, not primary, source are responding by banning certain forms of home sharing, of income and local governments have tightened regulations. • Receive payment from guests in exchange for services In 2018, the city of Palma on the island of Mallorca became the first Spanish town to ban short-term Certification is granted to communities (with a minimum rentals. Under the new rules, only owners of detached of four participating homes) for a period of two years and townhouses will be able to rent to tourists.71 New is advertised through an official “Home Stay Standard regulations as of June 2018 in Japan include registration Thailand” sign.74 requirements, the keeping of a guest registry, and a rental cap of 180 days a year.72 Each destination is different, and a variety of economic factors affect the P2P can reduce full-time employment opportunities cost of living and housing rentals. Further independent 6. P2P accommodation may impact the job-intensive research could be conducted to verify the impact of P2P hotel sector. Research on the degree to which accommodations on housing rents. digital platforms in general, and P2P accommodation specifically, impact hotel sector employment is P2P can affect the reputation of the destination inconclusive. However, most studies agree that mid- 5. P2P accommodation may put visitors at higher risk. range to low-end hotels that rely more heavily on price- Most P2P accommodation is unregistered and unlicensed, conscious leisure travelers are more likely to be affected. and therefore not inspected. This may put visitors at risk Independent research in Spain found that tourists and affect the reputation of the destination, especially in staying in hotels create more employment opportunities markets where building codes are not well enforced.73 in the destination than those staying in private homes; In situations where registration exists, it may not be P2P travelers created 9.8 jobs per 100 beds, whereas appropriate to P2P-style accommodation, increasing the traditional accommodation created 53.3 jobs per likelihood that providers will stay under the radar as long 100 beds.75 A study in Bali showed that large hotels as they can. Although there is no evidence that fires or employed two people per room, while homestay-type accidents are more likely in P2P rentals than residential accommodations employed less than half an employee homes, the risks facing guests who may not be familiar per room.76 The World Economic Forum estimates that with a building and its exits and fire extinguishers are the decrease in demand for hotels could reduce long- always higher. These risks are exacerbated when hosts term global job growth in the hotel industry from 4.3% are not adequately insured. Personal homeowner or to 3.0%, equivalent to about 1 million fewer jobs globally renter’s insurance policies generally exclude most to 2025.77 This shift, like others (for example, hotels to or all liability arising out of the use of the insured’s cruises, resorts to ecolodges), is largely controlled by property for commercial purposes. The platforms the market. Further research in this area is needed to are not the actual providers of accommodation, so identify the new skills needed for P2P success. they have no obligation to take out insurance for the stay. Some platforms, such as Airbnb and HomeAway, offer insurance to hosts. However, if accidents happen in uninsured accommodation, they may negatively impact the reputation of the destination and could result in legal disputes. 29 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION P2P Accommodation in Cuba While the Internet usage rate in Cuba is 40%, experts suggest that the proportion of people who can access the global Internet (and not solely the government-controlled Intranet) may be as low as 5%. Computers are prohibitively expensive for most Cubans, as is the cost of Internet and mobile service. Lack of Internet access and the prevalence of a cash economy presented challenges to Airbnb’s entry to Cuba in 2015. Cuba had a thriving existing network of 20,000 casas particulares (private bed-and-breakfasts) whose owners often used middlemen (co-hosts) with Internet access to market to potential guests. Airbnb tapped into those small businesses, and they now help handle Airbnb profiles, requests, and bookings. Other hosts adapt by using Cuba’s growing number of Wi-Fi hotspots. To handle payments in a country where many people do not have a bank account, Airbnb works with a Miami-based company, VaCuba, that issues and hand-delivers cash payments to hosts.78 This solution has come across hiccups, with some hosts saying that their payments are often late or incomplete. Cuba has become one of Airbnb’s fastest growing markets, with more than 22,000 rooms listed on the site since 2017.79 Photo Credit: Homestay.com - Cuba. 30 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION 7. P2P accommodation may benefit only the minority Limited accountability who are digitally skilled and have an asset to share. 8. Providers lack organization and representation. P2P is often referred to as an opportunity for inclusion. Stakeholders in the P2P accommodation sector are In all but the most popular destinations, however, the more difficult to identify than those in traditional income from P2P accommodation rentals is low because accommodation sectors, such as hotels, and in most of infrequent bookings and the fact that most hosts can destinations they are not organized. The platform have only a few renters at a time. A typical Airbnb listing Airbnb has started to address this situation through in 2017 was booked just 10 nights a year in Sri Lanka, the establishment of “hostclubs”. These are effectively 11 nights in India, 16 nights in Kenya, and 20 nights associations of P2P providers, who can meet and in Jamaica.80 This income, while a good supplement, discuss shared issues and concerns. Such organizations is unlikely to help very poor people. There is no guaranteed can make it easier for destinations to provide training income and no access to employer-based benefits, and services to this otherwise rather hidden group of such as health insurance and training.81 Consequently, destination stakeholders. the perceived impact may be far larger than the actual impact, and there is a risk that expectations for the sector Overtourism and for individuals may not be realized. Furthermore, 9. P2P accommodation rentals have been criticized to be able to participate in the P2P accommodation for contributing to overtourism. The phenomenon of economy, people need a spare bedroom, a second overtourism—that is, the overcrowding of a destination property, or the ability to vacate their primary residence by tourists—has become a politicized issue in developed from time to time to make room for guests. They also cities like Amsterdam, Venice, and Barcelona. Residents need to be situated in a desirable location, have the in Amsterdam and Barcelona have argued that short- necessary digital infrastructure in place, have access term rentals add to tourist congestion. In a new move to to digital financial services, and have digital skills and address these concerns in Amsterdam, the Dutch capital, literacy.82 In many destinations in emerging economies, officials announced a ban on P2P short-term rentals in these foundational elements are not in place. busy areas.85 In Barcelona, zoning laws in the historic This can make it challenging for potential providers of center prohibit new hotel construction. An excess of P2P accommodation to be successful, especially since demand has led to the conversion of residential areas the main P2P platforms do not provide significant into transient tourist zones despite the zoning law.86 support for providers with limited digital and hosting skills The resultant overcrowding may reduce the appeal of a destination, particularly in higher-spending market (see the earlier discussion under the section The Platforms). segments.87 It is unclear whether the demand is driven by Further research is needed to identify how and where the availability of P2P rentals or whether P2P rentals are economic benefits accrue directly and indirectly from the demand-driven, but either way, allowing uncontrolled P2P sector. growth of P2P accommodations in already crowded areas exacerbates existing congestion. P2P Depends on Digital Access While more than half of the world’s population uses the Internet, less than 15% of households in the least developed countries have Internet access, according to estimates from the International Telecommunication Union. The availability of mobile phones capable of accessing the Internet also lags: 97% of people living in developed countries have access to an active mobile-broadband subscription compared to 84% in developing countries.83 Another important consideration is the digital gender gap: in two-thirds of countries worldwide, Internet usage rates are higher for men than for women.84 Access to finance is also more challenging for women in most countries. 31 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION Barcelona Few cities are as vocal about overtourism as Barcelona. Residents have been voicing their frustration about tourism’s growth and impacts, such as congestion, pollution, rising rents, and declining quality of life. Much of it is related to the large numbers of cruise visitors, but some is also due to the presence of Airbnb, HomeAway, and other sharing- economy platforms. Between 2013 and 2016, the number of Airbnb hosts in Barcelona quadrupled from 4,000 to 16,000. Barcelona’s city council is attempting to control this sector. Since 2011, tourist rentals must register with the city, pay a fee, provide rental insurance, meet certain safety standards, and pay taxes. The council suspended new tourist housing licenses in 2014. The following year, the city fined Airbnb and HomeAway €600,000 each for advertising 6,000 unlicensed apartments.88 Up to 7,000 unlicensed rentals still operate. City inspectors seek out illegal, unlicensed rentals, and owners can face fines of up to €60,000.89 International P2P platforms divert income that 10. would otherwise be earned locally. In the past, travelers would book directly with providers, but nowadays they rely on the available listings that a few large players control, meaning that digital platforms are taking some of the revenue that used to go directly to the owner. OTAs and tour packages sold in the source market pose a similar problem. Given the number of providers who are using the platforms, it appears that the increased market access is worth the marginal loss in revenue. Photo Credit: Unsplash - Kinga Cichewicz - Barcelona, Spain. Chile’s P2P Accommodation Economy The government estimates that the majority of rentals are unregistered and part of the informal economy and The government of Chile initially welcomed the arrival thus unfairly competing with hotels and registered tourist of digital platforms as being useful for Chileans and did rentals. “It has opened a huge window into something that not move quickly to regulate them. Helen Kouyoumdjian, chief of the Development and Investment Division in the we in the government haven’t seen before: many informal Undersecretary of Tourism in the Ministry of Economy, listings that were probably already being offered, but now Development, and Tourism, expects the public sector to being used through these platforms,” said Ms Kouyoumdjian. become more active in the digital economy as it increasingly For example, of the 3,268 active Airbnb listings in Santiago, becomes a priority. only 508 (16%) are registered. The government is trying to encourage formalization with tax breaks and other In recent years, issues with P2P accommodations have incentives. emerged alongside the need to formulate new, targeted legislation. In Chile, hosts who rent out furnished lodgings— A separate issue is that Chilean law does not require digital both for and not for tourism—are required to pay taxes on platforms to pay taxes. A new law is being developed to their rental income. Those who rent out entire apartments regulate these different platforms so that Chile can benefit to tourists on Booking.com or Airbnb are required to register from the digital economy. “The government [wants to] with the national tourism board and show compliance with support the market; we just want them to follow the rules,” health and sanitation regulations, as well as paying taxes. said Ms Kouyoumdjian. Source: Interview with Helen Kouyoumdjian, Ministry of Economy, Development, and Tourism of Chile, May 2018. 32 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION The P2P Accommodation Economy in Jamaica To validate and deepen understanding of some of the The government of Jamaica has set the goal of opportunities and challenges of P2P, the research team diversifying the country’s tourism model to spread the conducted a rapid assessment of P2P accommodation in benefits of tourism away from the coast, provide more Jamaica. The scope of the study did not allow for conclusive entrepreneurship opportunities, and deepen economic economic analysis of the sector, but it has enabled a deeper linkages. The government has laid out a master plan for understanding of its opportunities and challenges and offers tourism development and a National Community Tourism some potential solutions. Policy and Strategy, which call attention to the potential of community-based tourism for diversifying tourism impacts. Tourism in Jamaica P2P accommodation is one way to create a more inclusive tourism model. The Ministry of Tourism In 2016, 25 million international travelers visited the and its agencies are now actively promoting the P2P Caribbean and spent US$30 billion, making it the most accommodation economy in Jamaica as a model for product tourism-reliant region in the world.90 Jamaica is the largest diversification. The sector still represents only a small share English-speaking country in the Caribbean, the third-largest of total accommodation, but hosts are starting to organize. island in the region after Cuba and Hispaniola, and home to In April 2018, the first Airbnb Host Club in the Caribbean 2.9 million people. was launched: the Jamaica Home Sharing Association. Tourism is one of Jamaica’s most important economic The analysis in the following section is based upon sectors and is dominated by all-inclusive resorts offering interviews with key government and private sector a sun, sea, and sand experience. The country has a hotel stakeholders in Jamaica, interviews and focus groups with inventory of 23,000 rooms; nearly 70% of these are in hotels P2P accommodation providers, a survey conducted by the with more than 200 rooms. Jamaica Home Sharing Association in May 2018, data from the Jamaica Tourist Board and the Ministry of Tourism, and data obtained from Airbnb,e Homestay.com, and TripAdvisor Rentals. Jamaica at a Glance • GDP grew by 0.5% in 2017, down from 1.4% in 2016 • GNI per capita (2016) was US$4,630 Jamaica’s Vision for Community Tourism • Overall unemployment rate in 2017 was 10.4%; youth (age 20–24) unemployment rate was 25.4% “[A]n invigorated tourism sector in communities that enriches community quality of life through social, cultural, • 17.6% of population lives under the national poverty economic and environmental benefits, exemplifies line (2010) sustainable livelihoods, and strengthens Jamaica’s national Source: World Bank Country data. policy values and interests.” e The data provided by Airbnb to the World Bank team was considered a suitable proxy for the overall P2P accommodation economy in Jamaica, as it includes more than half of all P2P listings. Airbnb provided data to the World Bank for this market, but played no part in the analysis of the data. 33 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION P2P Accommodation The listings in Table 6 provide an indication of the size of P2P accommodation in Jamaica. Providers indicated that many of them list their property/properties across multiple platforms. Table 6. P2P Accommodation Listings for Main Platforms in Jamaica (April 2018) Homes Condominium/apartments B&Bs Private room/ Shared Total homestays rooms Airbnb 3,811 n/a 1,969 101 5,881 TripAdvisor Rentals 1,501 722 n/a 110 n/a 2,333 HomeAway 902 29 14 Booking.com 537 454 88 45 n/a 1,124 Sources: P2P Platforms. Note: TripAdvisor Rentals is owned by Expedia and includes the brands FlipKey, Holiday Lettings, Niumba, HouseTrip, and Vacation Home Rentals. HomeAway also includes the brands VRBO and Vacationrentals.com Figure 8. Number of Airbnb Listings in Jamaica, by Type, 2014–2017 Key Findings for P2P Accommodation in Jamaica 1. P2P accommodation represents a small share of the 7,000 5,881 overall tourism market. 101 6,000 2. Almost half of all listings have never been booked, and 4,382 average occupancy levels are low. Number of listings 5,000 1,969 59 3. P2P accommodation shows geographic distribution 4,000 patterns that are different from hotels and resorts. 2,638 1,337 4. A wider range of source markets use P2P than other 3,000 29 forms of accommodation. 2,000 1,082 781 5. P2P accommodation is particularly attractive for 3,811 13 2,986 returning Jamaicans and the domestic market. 1,000 6. High-performing providers tend to be educated 394 1,828 0 675 professionals. 2014 2015 2016 2017 7. The majority of hosts are women. 8. P2P income varies, but provides a significant boost to Entire home Private rooms Shared rooms the provider’s income and to service providers. 9. Security and rising rents are the main concerns for Source: Airbnb data, World Bank Group analysis. residents living close to P2P rentals. 10. Licensing and taxation are the critical issues for Note: Entire home: Guests have the whole place to themselves. policymakers. This usually includes a bedroom, a bathroom, and a kitchen. Private rooms: Guests have their own private room for sleeping. 11. P2P accommodation in Jamaica is commercializing from Other areas could be shared. Shared rooms: Guests sleep in a homesharing to rentals. bedroom or a common area that could be shared with others. 34 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION The following is an overview of the main findings of the 3. P2P accommodation shows geographic distribution P2P accommodation research in Jamaica. patterns that are different from hotels and resorts. Montego Bay is the main tourist destination for 1. P2P accommodation represents a very small share international arrivals, followed by the other resort areas of the overall tourism market. In 2017, there were just of Ocho Rios and Negril. The three areas combined over 2.4 million international tourist arrivals to Jamaica. received 77% of the total number of international In the same year, 59,522 guests used Airbnb, just 2.5% arrivals in 2017 and have 80% of hotel room inventory. of all international arrivals to Jamaica. When domestic The capital, Kingston, received only 9.8% of all arrivals tourists are excluded from the total number of guests, in 2017. In contrast, 27.2% of all Airbnb guests stayed Airbnb guests represented just 2.4% of all international in Kingston in 2017. Interviews with providers suggest arrivals in 2017, though the actual percentage may the reasons for this difference are that Kingston is the be slightly lower, because some guests make multiple airport hub for more adventurous travelers, reggae bookings when staying in Jamaica. The other 97.6% music aficionados, returning Jamaicans, and business stay in hotels, private homes, and apartments booked travelers who constitute a growing market for P2P via other distribution channels, or with friends or accommodation. P2P accommodation in Kingston is also family. According to the Jamaica Tourist Board, particularly in demand during Carnival and during sports the estimated total gross foreign exchange earnings from and music events; the city has relatively fewer available tourism were US$2,724 million in 2017. In comparison, hotel rooms than the resort areas. However, the total revenue from Airbnb bookings was US$9.4 million, listings on the TripAdvisor Rentals platform are mostly 0.345% of gross foreign exchange earnings. Even if all traditional vacation villas located in the main resort areas. P2P accommodation were included, it is unlikely that Their top locations for listings follow the same pattern earnings from P2P would exceed 1% of foreign exchange as destinations for the overall international arrivals. earnings from tourism. This suggests that P2P at its current Of all their bookings in 2017, 43% were for rentals in scale is not a significant threat to the viability of the existing the Ocho Rios resort area. Homestay.com, which offers hotel and resort sector. only private rooms, also has relatively more activity in 2. Almost half of all listings have never been booked, the capital: 17% of all listings are in Kingston. These data and average occupancy levels are low. Although the may imply that the homestay (host-present) type of number of listings has grown quickly since 2014 and P2P accommodation provides more geographic spread now represents almost 20% of all rooms in Jamaica, than typical vacation rentals. This suggests that P2P could many have never been booked. Only 55% of the active be an effective tool to assist the government’s strategy of listings (the properties listed on the platform) have been diversification, but only in the case of homesharing, less so in booked at least once since listed. The average listing the case of commercial rentals. (listings that had at least one booking during the study period) was 20 booked nights per year. This number has remained relatively stable over the last three years. Entire homes achieved the highest number of booked nights: 25 nights in 2017. When looking at entire homes that are available year-round, 25 nights would be equivalent to an occupancy rate of 6.8%. For private and shared rooms, the number of booked nights in 2017 was just 13 nights. In contrast, the overall occupancy rate for licensed hotel rooms in the country in 2017 was 64.9%. Interviews with providers suggest part of the reason for low utilization of available P2P accommodation includes guests' safety concerns. This problem is not unique to Jamaica. P2P accommodation providers living in less desirable neighborhoods indicated they received none or very few bookings, a pattern that has been aggravated by the recent spike in homicides and violent crime in the country.91 This suggests that the P2P model is not a solution for all disadvantaged areas because certain basic conditions are still needed. 35 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION Figure 9. Map of Jamaica Montego Bay Ocho Rios Negril Kingston Source: Portable Atlas. Figure 10. International Arrivals and Airbnb Guests in Jamaica, by Resort Area, 2017 40 35.4 35 27 27.7 30 Percentage of total 25 23.2 23.7 18.8 20 15 8.8 9.8 10 6.5 6.9 6.6 5,3 5 1 0 Montego Ocho Rios Negril Port Antonio Kingston & Southcoast Other Bay St. Andrew International arrivals Airbnb Sources: Jamaica Tourist Board and Airbnb. Note: Montego Bay includes St. James, Trelawny and 25% of Hanover; Ocho Rios includes St. Ann and St. Mary; Negril includes 75% of Hanover and 75% of Westmoreland; Kingston includes Kingston & St. Andrew and St. Catherine; Southcoast includes Clarendon, Manchester & St. Elizabeth and 25% of Westmoreland; Port Antonio includes Portland and St. Thomas. 4. A wider range of source markets uses P2P than other higher percentage of European visitors than hotels forms of accommodation. The wider the market base are. Almost 23% of P2P guests are based in Europe, of a destination, the more resilient it is to shocks. P2P compared to just 14% of hotel guests. Interviews with providers are less reliant on the U.S. market than hotels providers revealed that German and French visitors tend are. North America represents 81% of all international to be more interested in the local culture and are looking arrivals, but only 63.2% of P2P guests are from North for opportunities for host-guest interaction. This suggests America. P2P providers, in contrast, are receiving a that P2P can help improve market spread and resilience. 36 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION Figure 11. Top Countries for International Arrivals and Airbnb Guests in Jamaica, by Market Share, 2017 International arrivals Airbnb guests United States (64.2%) United States (54.4%) Canada (17.2%) Other (16.1%) United Kingdom (9.3%) Canada (8.8%) Other (7.2%) United KIngdom (6.7%) Germany (1.3%) Jamaica (5.9%) Italy (0.6%) Germany (5.8%) France (0.3%) France (2.3%) Sources: Jamaica Tourist Board. Sources: Airbnb. 5. P2P accommodation is particularly attractive for 6. High-performing providers tend to be educated returning Jamaicans and the domestic market. professionals. Interviews with providers in Kingston and Overseas Jamaicans, who traditionally stayed with site visits indicated that those providers with the highest their relatives, now represent 50% of the P2P market in occupancy levels are professionals with well-maintained Kingston. Providers explained that the ease of booking properties in more desirable neighborhoods. They are P2P accommodation, combined with the desire to often introduced to the concept of P2P accommodation rent entire apartments instead of hotel rooms, drives through family overseas or their own travel experiences. this choice. Overseas Jamaicans tend to stay a week Another important host segment is composed of empty or longer and travel in groups. The domestic market is nesters who are retired and use the extra space in their also actively using Airbnb in Jamaica. Domestic tourists home to earn additional income; they also enjoy the (resident Jamaicans) represent 5.9% of all the platform’s interaction with guests. This category is more likely to run guests in the country. According to provider interviews, a small bed-and-breakfast, renting out rooms in their own while domestic visitors used to just stay with family and home or in an adjacent apartment or house. The average friends, now many of them use P2P accommodation age of an Airbnb host in Jamaica was 46 years in 2017, when visiting for events, business travel, and leisure. a slight increase from 2014. The share of younger hosts, This suggests that P2P may help create new and monetize under 30, declined from 16.7% in 2014 to 12.7% in 2017. existing market opportunities. This suggests that P2P may not be benefiting the poorest people. 37 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION 7. The majority of hosts are women. In 2017, women Quotes from P2P accommodation providers represented 53.1% of all Airbnb hosts in Jamaica. “Accommodation rentals have turned the real estate market Globally, women make up 55% of the platform’s hosts.92 on its back due to the US$ earning potential, discouraging Women represent 73% of Homestay.com hosts. In the long-term rentals earnings, while displacing renters who can’t cases where the homeowners are a couple or family, initially afford to own a home.” the woman often acts as the official host. According to providers, this is usually a strategic choice, as guests are “Jamaicans coming home told me it is cheaper for them to thought to feel more comfortable booking and staying rent a place than to stay with family, as that would cost with a woman host. The extent to which women are them more. Their family expects them to pay for everything: used as a “front” for an otherwise male-controlled sector groceries, going out, and more. They are also used to is an area for future research. From the data received, amenities such as air conditioning.” it is also unclear what percentage of actual bookings “I am worried that saturation of the market will drive the are captured by women hosts. It is clear that P2P benefits rates down.” women, but it is not clear how P2P revenue and listing type differs between men and women. “It is not the international guests that make me feel unsafe— it is when they bring local friends into my home.” 8. P2P income varies but provides a boost to the “There have been situations where I had to call a friend to get provider’s income and to service providers. In 2017, a local man out of my house that a female international guest the average Jamaican Airbnb host earned US$2,409. had brought home. She had no clue what type of person The gross national income (GNI) per capita in 2016 was he was.” US$4,630;93 the hourly national minimum wage in Jamaica is JMD$155 (US$1.25), so this is not an insignificant amount.94 This average is for hosts who had at least one booking on this platform during 2017. The average income 9. Security and rising rents are the main concerns for is likely to be higher than this, however, since most hosts residents living close to P2P rentals. Many Jamaicans receive bookings via multiple platforms. Some providers are concerned for their personal safety and opt to live in made additional income by providing transportation gated communities or apartments with secured entrances. services. Hosting cannot, however, be considered full-time When asked about personal safety, some hosts did indicate employment because most providers receive only 20 or concerns. Most providers use the review system to check fewer bookings every year. While it could not be validated the rating of the guests before accepting a booking, due to lack of specific data, observations indicate that a and some notify guests in advance that they will check relatively small group of providers receives significant passports or drivers’ licenses at check-in. Security is also income from their (multiple) listings, while the remainder a concern for neighbors, because security codes and keys of providers earn significantly less. P2P accommodation for gates are shared with non-residents—either guests or may, however, provide full-time work for service providers. service providers—who will get access to the secured area. A survey in Jamaica showed that 90% of providers hire An additional concern for residents is the increase in rents others for cleaning and other caretaker work. Those and the decrease in the number of long-term rentals due providers with two or more listings tend to employ a full- to P2P use. Providers indicated that short-term rentals time housekeeper. More research is needed to fully understand provide them with significantly higher earnings than they the employment value chain from P2P. would receive from long-term tenants. The downside of this is that fewer long-term rentals are affordable. Careful regulation of P2P is needed, and guidelines should be developed for security. Licensing and taxation are the critical issues for 10. policymakers. Airbnb providers have a low reported compliance rate with Jamaica’s tourism licensing and taxation rules. To offer any type of tourism accommodation in Jamaica, as per the Jamaica Tourist Board Act of 1955, a property must have a Tourist Board license issued by the Tourism Product Development Company (TPDCo), and the provider must pay the Guest 38 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION Accommodation Room Tax return (GART). The GART rates are charged per occupied room night based on the number of rooms in the property. Properties that have between 1–50 rooms are currently charged at a rate of US$1.00 per night. This means the 59,544 Airbnb guests in 2017 staying an average of 4.5 days could contribute US$133,974 if all taxes were reported (based on double occupancy). The licensing issues stem from the problem that the rules are too complex and not well suited to the P2P model. To receive a license to operate, providers must meet 11 requirements, which can take up to two years to be able to fulfill. These include a certified application form, tax registration number, proof of ownership, food handler's permit, public health tourism establishment certificate, fire certificate, public liability insurance, proof of registration of business name, a security approval letter from Jamaica constabulary forces, a character reference from a justice of the peace, minister of religion, or a superintendent of police, and a TPDCo assessment recommendation. If destinations want to have P2P providers registered and paying guest taxes, they need to make the process easy and suited to the scale of operations. P2P accommodation in Jamaica is commercializing 11. from homesharing to rentals. Of all Airbnb listings in Jamaica, 71% are for entire homes or apartments, and stakeholders indicated that the fair majority of these are non-primary residences and not host-present rentals. Anecdotal evidence indicated that many of the private rooms are also not in host-present rentals; providers rent out separate rooms within an entire home if there is no demand for the entire listing. The number of host providers with several listings has increased slightly in the last four years. In 2014, 80.6% of all Airbnb providers had only one listing, while in 2017 this number had decreased to 77.6%. The resort areas of Montego Bay and Negril have a higher average number of listings per provider than other parts of the country. Short- term rental management companies often manage the booking process and maintenance on behalf of the owners in exchange for a flat fee or commission. In Kingston, a number of providers explained that they have reinvested or will be reinvesting part of their earnings into purchasing additional properties for P2P rental. The lack of hotel rooms in Kingston has even resulted in the construction of several apartment complexes that are purpose-built for P2P accommodation. These are very similar to vacation rentals, but are only rented over P2P sharing platforms. Over time, the P2P market evolves from single to multiple listers; regulation needs to be agile and reviewed frequently. Photo Credit: Unsplash - Caleb Semeri - Hamilton Island, Australia. 39 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION Key Takeaways While the case study of Jamaica is small in scale, it has helped validate some of the opportunities and challenges of P2P accommodation raised in the research. While most of the opportunities were validated in Jamaica, some of the challenges were not. In Table 7, those statements that were supported in Jamaica are green; those that were not supported are red. Orange indicates there is not enough evidence to decide. Owing to the exploratory nature of the research, these results are indicative only and would benefit from further analysis. Table 7. Opportunities and Challenges of P2P in Jamaica Opportunities Challenges 1. Helps attract new markets and demographics to new 1. May be unregistered and unregulated. and existing destinations. 2. Influences the type and nature of visitor purchases and 2. May not be following tax laws. services. 3. Can build consumer trust to visit a destination in new 3. Can cause disturbances in a residential community. ways and try new products. 4. Lowers the barriers to entry for entrepreneurship. 4. May cause housing prices and rents to increase. 5. Supports homeowners and helps prevent displacement. 5. May put visitors at higher risk. 6. Enables the dispersion of tourists in a wider 6. May impact the job-intensive hotel sector. geographical area. 7. Increases access to market, which is particularly helpful 7. May benefit a small minority. for community-based homestays. 8. Provides flexible inventory to meet the rise and fall of 8. Providers lack organization and representation. demand and assists in times of crisis. 9. Has a relatively small environmental footprint. 9. Contributes to the impact of “overtourism”, which reduces the visitor experience, making it hard to control capacity. 10. Collects real-time data about visitors. 10. The P2P platforms, if they are internationally located, divert income that would otherwise accrue to the destination. The main takeaways of this analysis in Jamaica are • P2P accommodation may also be able to help as follows: Jamaica diversify its tourism market. Homestays allow Jamaica to diversify from its traditional sun, sea, • P2P accommodation may be able to help the and sand product that caters mostly to North Americans. government of Jamaica to reach its goal of Home stays attract a more diverse geographic source diversifying the tourism product in Jamaica. market that is interested in a community-based Digital platforms have resulted in an expansion of P2P tourism experience. Small bed-and-breakfasts and accommodation offerings in Kingston and other non- individuals offering rooms in their primary residence resort areas. This inventory of mostly private apartments are also benefiting from the increased access to new has been shown to be an appealing alternative for visiting markets that these platforms provide. Digital platforms overseas Jamaicans and other markets that are attracted have enabled the accommodation inventory to expand by the self-catering facilities and competitive pricing quickly for events and festivals when existing inventory these lodgings can offer. Further efforts may be needed to cannot handle the surge in demand. Incorporating a P2P promote this sector in rural areas. local experience brand in the Jamaica Tourist Board marketing efforts will help with diversification. 40 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION • The P2P accommodation economy can generate • P2P can be inclusive, but it does not happen without service jobs, since most providers employ people for support. The high demand for accommodation in cleaning and housekeeping jobs. However, these jobs are secured environments in Kingston is driving up the inconsistent, and their ability to address the problem of supply of P2P and even driving the development of high youth unemployment is limited. More opportunities new purpose-built rentals. This activity could result in may be available through the provision of tours and an oversupply and consequent fall in hotel occupancy. activities for P2P guests (via an experiences platform). This does not seem to have occurred so far. Updated and Training in tourism awareness, digital platforms, business, agile accommodation regulation is urgently needed to address and support for rural tours could be provided to expand the this area. opportunities for young people in the sector. • Better guidelines and protection are needed to • Regulation needs to adapt quickly to the change in address residents’ security concerns. The key issue accommodation offerings. The government of Jamaica for neighbors of P2P accommodation listings located is taking a positive stance toward P2P accommodation, in gated communities and apartment buildings is the but new licensing systems are urgently needed. The possibility of criminal gangs taking advantage of P2P process of licensing for home stays is cumbersome, accommodations to attain access to secure areas. requiring hosts to obtain forms from many different Alternative security measures may be needed to address institutions; most P2P providers opt not to obtain a this concern. license. This means that the government does not have The main questions moving forward are how to a clear overview of the size of the market and cannot improve the utilization of existing P2P accommodation, fully control the safety of visitors. If Jamaica wants to have how to actively market this product, how to regulate it P2P rentals registered they need to make the process easy and efficiently, and how to make it more inclusive. Further suited to the scale of operation. research is also needed to better understand the patterns • A fair taxation regime is needed to address the of P2P spending and how to optimize these in line with the concerns of the hotel sector. The main concern government’s goals for economic diversification. of the hotel sector is fair regulation and taxation. Representatives of the hotel sector indicate that the lack of enforcement of existing regulations and tax collection is preventing a level playing field for all types of accommodation providers. They are also concerned about the lack of quality control of the P2P offerings and the effect a possible incident could have on the reputation of Jamaica as a safe tourist destination. Improved, low-cost training and minimum standards codes are needed to assist P2P operators in upgrading their standards. • P2P accommodation changes over time from homestays to commercial rentals. While P2P mostly engages women in Jamaica, it is not socioeconomically inclusive, nor have the relative benefits to women been verified. Lack of an attractive property is the main barrier to access for marginalized groups. Guests prefer to stay in secured apartment buildings and gated communities, owing to safety concerns. Relatively few providers are very successful, while others have difficulty attracting guests. Providers receiving the most reservations are professionals with well-maintained properties in more desirable neighborhoods. Training and improved promotion and access to funds for upgrading might assist those with lower-standard P2P accommodations to join the successful group. 41 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION Recommendations for Sustainable P2P Accommodation P2P accommodation presents destination managers livelihoods. Mature destinations may face fewer capacity and with both opportunities and challenges. Eleven digital-access hurdles than developing destinations, which opportunities and challenges have been identified and, for could be vulnerable to adverse social impacts. The Jamaica the most part, validated, through the case study of Jamaica. study also showed that the P2P sector changes rapidly over time, evolving from single to multiple listers. Whether the Each destination’s needs, vision, and goals are quite outcome is a net positive for the destination depends on the different, however. Urban destinations suffering from particular situation and how it is managed over time. overtourism need more stringent rules and regulations than rural destinations that may be trying to use P2P as an The World Bank Group recommends taking four steps opportunity to diversify tourism product and support local toward sustainable P2P accommodation. Figure 12. Four Steps toward Sustainable P2P Accommodation 01 02 03 04 Offer training, Implement Establish Conduct a digital skills, product government rapid diagnostic and mobile development, interventions assessment banking support marketing, and and standards monitoring Step 1: Conduct a Rapid Diagnostic Once this information is collected, it is important to have open public communication about the results. Assessment Greater transparency will help to raise awareness and lead The first step in any policy dialogue should be to more transparent decision-making. an assessment of the scope and scale of P2P accommodation in the destination. The reluctance of Step 2: Establish Government the digital platforms to share their data means there is Interventions and Standards an overreliance on the research produced by the digital The level of public-sector intervention required in P2P platforms themselves. Destinations must develop their accommodation depends on the type of destination own information systems to ensure valid data on the P2P and the significance of the sector within the larger sector, rather than relying on hotel association advocacy or tourism economy. Government intervention is needed platform-produced research. The Appendix provides three if P2P accommodation contributes to overcrowding, sets of assessment questions to guide this diagnostic process: negatively affects the quality of life for residents, or if it is out two for policy and tax decisions and another for greater of line with destination management goals. Regulation and intervention are also needed to coordinate the demand and inclusion. The assessment can help policymakers and other supply of infrastructure and other public utilities. It is worth stakeholders to better understand and clarify their approach noting that the answer to this question will change over to the P2P accommodation sector in their destination. time, and only with valuable information can policymakers The list is not exhaustive, and should be adapted to the make good decisions. This section provides an overview of specific situation and the role that the P2P accommodation policies that are based on lessons learned from research in fulfills in the destination. destinations around the world. 42 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION Ensure properties are officially registered. Registration self-report each time their property is rented out, with a is a good entry point for improved management. Cities maximum cap of 60 days; the city has actively begun to seek are facing challenges with overcrowding: Amsterdam, out violators who exceed the number of days.96 About 2,500 Barcelona, Vancouver, and San Francisco are all leading the unique rentals had reported by the end of 2017, a quarter field in regulation, out of necessity. Most of these cities now of the total supply. Again, collaboration with platforms can require hosts who rent out their property through a digital help with enforcement. For Amsterdam, Airbnb has a tracker platform to register with local authorities. Accommodation on the site that removes the property from the site when that is not registered is considered unofficial and thereby the maximum is reached. The limit is 90 days in London and illegal. For example, all providers of holiday rentals in 120 days in Paris’ city center.97 Catalonia, Spain, are required to apply for a HUT number Review tourism and town planning and zoning (Habitatge d’ús turistic or Touristic Use License). ordinances applicable to P2P accommodation. Simplify and adapt tourism licensing to work for P2P. Municipalities may need to review or reconsider planning Simplified licensing processes in line with the type and and zoning ordinances for P2P accommodation offerings. scale of the provider will help improve compliance and Typical municipal zoning codes include guidance on how increase guest safety. The basic requirements should include a dwelling unit will be defined. This sets the stage for security, smoke alarms, fire extinguishers, and information regulating how it can be used as a short-term rental. on evacuation procedures. Insurance coverage can also be a Local planners need to ensure that zoning and residential requirement for obtaining a license. development regulations can distinguish between different Work with platforms to ensure support with regulation forms of short-term P2P accommodation listings and and taxation. Enforcing policies can prove difficult, as their potential impacts on neighborhoods and the housing has been experienced in San Francisco. One solution to is market.98 For example, cities and municipalities in California to enter into an agreement with the platform providers and Hawaii have started to design and approve ordinances to assist with the implementation of municipal rules. to allow homeowners to share their homes under specific This is not always easy and may require legal action to secure. circumstances in areas where it was previously prohibited.99 These agreements may relate to enforcement of rules and In Cape Town, zoning laws do not permit property owners regulations, tax collection, and data sharing. For example, in an apartment building to rent out their place, but owners Airbnb now collects a 5.5% tourist tax for Amsterdam and of a house can run a bed-and-breakfast without permission allows only registered properties in San Francisco to list. and can also apply for a permit to operate a guest house.100 Communicate P2P tax requirements clearly and work on tax updates where necessary. Traditional Step 3: Offer Training, Digital Skills, accommodation providers such as hotels are subject to and Mobile Banking Support different types of taxation: corporate tax, income tax, VAT, and tourist tax. Governments need to assess the size and the One of the main opportunities created by digital dynamics of the P2P accommodation sector to decide if it is platforms is providing access to market for both existing necessary to modify the existing tax structures according to providers as well as new entrants. But, despite the ease of the destination type and its aspirations. For example, U.S. tax use of new platforms, barriers to access remain. To participate authorities allow individuals to rent out their homes for up in the P2P accommodation economy, a host needs a desirable to 14 days without having to pay taxes. The United Kingdom accommodation for rental, digital access, an understanding provides “rent-a-room” relief of up to £7,500 for owners or of guests’ needs and wants, and, for most platforms, tenants who rent out furnished accommodations to a renter a bank account. Research in this area is still new and will in their home.95 These and other flexible approaches toward be informed by forthcoming World Bank pilot studies; some tax policies and enforcement mechanisms are still relatively suggestions follow. new in the context of the P2P accommodation economy Support the development of reliable and affordable and require further research. digital services. P2P accommodation providers must Consider setting a cap on the number of days P2P have access to digital infrastructure. This means access to accommodation may be rented in any one calendar reliable and affordable Internet service and the use of a year. This approach will reduce noise and annoyance computer or smartphone. In addition, they need the basic to neighbors and may be appropriate for overcrowded communication and digital literacy skills to access Internet destinations and destinations where short-term rentals service, as well as more specific skills, in particular knowing are driving out tenants. For example, in 2017, the city of how to successfully present and manage their listing on Amsterdam introduced a new rule that requires hosts to the platforms. This includes the ability to upload photos to 43 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION websites and an understanding of how to be responsive to Flexible Payment Solutions information requests from the platform and from potential The Irish company Homestay.com has arranged guests. Research and interviews have shown that few 1 million nights in homestays in 160 countries since platforms are providing the support needed to overcome their inception in 2013. The company allows only host- the digital divide. In some cases, nongovernmental present accommodation on their platform. The average organizations, such as SEWA in India and Open Africa, step length of stay is 12 nights, and a large portion of their guests in to fill this gap. In other cases, co-hosts (individuals with travel for educational reasons. The average price per person the digital skills to manage bookings for others) emerge or is US$31, and hosts earn an average of US$1,500 per year. are trained. In China, village terminals have been established The company also offers communities and small networks to assist with e-commerce to get over the digital gap.101 the opportunity to list on their portal, so that they can tap into the company’s customer base and share in the commissions. The guests pay a 15% booking fee to confirm a booking and Capacity Building in South Africa then pay the host directly in cash on arrival (some hosts ask guests to make a full or partial payment in advance of Airbnb partnered with Open Africa, the South Africa arrival by PayPal or bank transfer). The company does not College of Tourism, and the Cape Innovation and make any payments to the hosts. This way hosts are not Technology Initiative to start a pilot program in 2017. required to have a bank account or to pay for the cost of Launched in Khayelitsha Township, South Africa, the program international transfers. provides entrepreneurship, technology, and hospitality-skills training to 15 existing Airbnb hosts to help them grow their To mitigate the costs and risks of last-minute cancellations, homestay businesses. A potential approach that emerged the company recently partnered with Payoneer to offer a from the two-week program was cohosting, or the practice deposit payment option to protect against cancellations. They are slowly rolling this out across their platform. of having a tech-savvy person manage listings for hosts who When booking with a host who requires a deposit, the guest lack confidence in their digital skills. Another insight was pays a deposit of 25% of the price of the stay in advance, that tourism experiences, apart from just accommodation, at the time of booking. This 25% deposit will be transferred to may be needed to attract and sustain visitation. The added the host directly using Payoneer if the guest cancels less than benefit of the training program was that it provided an seven days in advance. This payment option will be offered opportunity for the women to get to know each other and in different countries in the coming months, depending on initiate a support system.102 the availability and transaction costs of Payoneer. Cuba is their number-three destination in terms of revenue, after the United Kingdom and Ireland. According to Suzanne Cox from Facilitate options for mobile banking and electronic Homestay.com, “We are conscious of the costs to receive and payments. In many developing and emerging markets, make international payments for developing communities. a significant portion of the population lacks access to Therefore, Homestay.com will continue to promote its ‘pay financial services (bank accounts, loans, and so forth), and/ on arrival’ policy for lots of destinations, ensuring continued or financial regulations and infrastructure prohibit online flexibility for both the host and guest traveling.” payments. It is therefore impractical, if not impossible, for Source: Homestay.com many people to participate in P2P platforms either as a host or guest. As P2P demand grows in emerging markets, financial institutions and other stakeholders are starting Encourage P2P providers to organize. In most to adapt to this reality by providing alternative options destinations, traditional accommodation providers, such for people without access to traditional financial services. as hotels, are represented through member associations. For example, Homestay.com, Airbnb, and HomeAway now P2P accommodation providers are mostly unorganized. all provide hosts with the option to receive their hosting One exception is Sharing Economy U.K. (SEUK), a trade fees using Payoneer, which gives people a debit card that body created in 2015 that advocates on behalf of the United allows users to deposit their funds at a local bank or cash Kingdom’s sharing economy. Its members hail from the it at an ATM.103 Some of the platforms also offer Western home-sharing, transportation, payment, freelance, and other Union and PayPal as payout options; in Cuba, an American sectors.105 In large, established cities such as New York and International Service (AIS) debit card is an option.104 These Berlin, the platform Airbnb directly represents the interests of types of innovation can have far wider implications: hosts when dealing with local authorities; the hosts are also they can assist microentrepreneurs in expanding many kinds organized in Host Clubs.106 In smaller destinations, the P2P of businesses. accommodation sector often lacks formal representation. 44 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION Step 4: Implement Product Market registered P2P accommodations as part of the destination offering. In destinations where very little Development, Marketing, tourism demand exists, listings on digital platforms need and Monitoring to be actively promoted. This can be done in partnership with the platforms and destination marketing organizations Once the regulations and capacity are in place, it is (DMOs). Poor neighborhoods and less well-known time to develop the product, actively promote it, and destinations particularly struggle to get bookings. Promotion carefully monitor the impacts. can increase the attractiveness of these destinations, boost Build the capacity of providers to offer quality products. their brand and image, and attract new markets. It can also incentivize registration. This is a relatively new area Besides access to a desirable property, preparing, presenting, and further work is needed to establish the best strategies and hosting a property requires an understanding by the for P2P hosts and the destination. This approach aims to hosts of the needs and wants of the target market. Capacity highlight P2P as a new and exciting product that enables building can help new hosts succeed while contributing visitors to stay longer, bring their families, and engage in to the development and management of the destination. local activities and experiences in the destination. Host capacity building may be needed to ensure that the Improve supporting infrastructure. P2P rentals can play P2P accommodation quality is consistent with the brand an important role in dispersing tourism accommodation and identity of the destination. Training hosts in safety and and can thereby help spread economic benefits over a wider security will help reduce risks for guests, increase awareness geographic area. In some destinations, especially rural ones, of the risks of gender-based violence, and improve this might require investing in transportation, road signage, guest satisfaction. and utilities infrastructure to ensure accessibility. Improve data collection and statistics on P2P. Expand opportunities for other products to be sourced Policy evaluation has proved challenging because of the through P2P. For people who do not have access to lack of information about where individual properties are a space that meets the requirements for hosting, but and how they are spreading and performing. Accurate have a talent or passion to share with tourists, there are measurement of the scale and impact of P2P is difficult, opportunities to market cooking classes, walking tours, because the platforms do not reveal specific names and and other products through several digital platforms. Some of them require little or no access to finance or an addresses.107 While some platforms have begun to share asset. Many digital platforms offer experiences, including some data, many do not share enough for useful analysis. Airbnb Experiences and Vayable, which are both active Improved systems are needed to assess the size and scope on a global level. Vayable offers experiences provided by of the sector. For example, the United Kingdom is developing local people who can sign up as independent tour guides. a framework to define sharing economy businesses and Other platforms specialize in a specific region or country, individuals and to collect and disseminate statistics on such as Tastemakers Africa, Keteka in South America, their activities.108 The Republic of Korea has also promised and Hivesters in Thailand. Enhancing inclusion in the to begin capturing the digital sharing economy (including P2P accommodation economy can involve working with unregistered Airbnb hosts) in its GDP, starting in 2019.109 residents to design and market appealing tourism products. 45 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION The Knowledge Gaps While the number of studies on the P2P accommodation economy is increasing gradually, more independent and objective research, particularly focused on emerging markets, is needed. The research presented here has been exploratory in nature and aims to identify and validate the main pros and cons for destinations while indicating areas for future research. There are some significant knowledge gaps for both destination policymakers and development specialists looking to harness the P2P model for greater economic inclusion. Future research and economic studies could be used to deepen understanding in the areas noted below. Road Map for Future Research 1. What are the employment impacts of P2P? Does P2P accommodation growth expand employment opportunities or reduce them? 2. Do P2P guests spend more or differently and how? What do P2P accommodation guests spend in the local destination economy, how long do they stay, and how does this compare with spending by other types of travelers? 3. Does P2P create new markets or diversify existing markets? Which demographic and geographic markets are attracted to what type of P2P accommodation? 4. How can P2P be encouraged in some locations and reduced in others? 5. Does P2P decrease hotel occupancy? Does P2P come at the expense of hotels? Who are the winners and losers? 6. How and when should P2P accommodation be marketed effectively as a destination product? 7. What are best practices for P2P licensing and registration? 8. What impact does P2P have on affordable housing and rental prices? 9. What are the characteristics of successful P2P providers? What skills are needed to be successful? 10. What innovations in the areas of digital access, training, and mobile finance are needed to facilitate greater inclusiveness? 11. Is P2P really an empowerment tool? How much do women earn from P2P in comparison with men? Photo Credit: Nepal Community Homestay. 46 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION Conclusion and Next Steps P2P accommodation is a fast-growing tourism Although each place is different, the Jamaica case product with implications for emerging economies. study helped deepen our understanding of the scale It presents many benefits for growing destinations, but of opportunities that P2P provides for destinations. it also poses some challenges to destination managers. The study explored some interesting areas for further Understanding the complex evolving landscape is crucial work. For example, the research found evidence that P2P to developing successful policies and ensuring that accommodation is linked to increased use of accommodation the full benefits of product expansion can be realized. by overseas Jamaicans visiting friends and relatives. This exploratory report examined current research It also showed potential for diversifying tourism from resort concerning the P2P accommodation sector, compared areas and broadening the market segments. The study also platform data, and was augmented with global insights revealed that, while P2P does support women hosts, it is from research in Jamaica and other countries. This report not always socioeconomically inclusive, and that almost has attempted to capture some of the lessons learned half of all hosts are not actively receiving bookings. Hosts in poor neighborhoods struggle to get bookings while those in from these challenges so that emerging destinations can wealthy neighborhoods thrive. sustainably manage P2P accommodation. Building the capacity of hosts to succeed, through Better information is crucial to better decision making. improved digital and business literacy, better The reluctance of the digital platforms to share their data management, engagement with customers, and makes it difficult to independently verify some of the improved marketing and promotion will also help drive information published. Destinations need to conduct their higher revenues at the destination. Sustained training own assessments of the P2P sector to inform policy and and support are a gap because few platforms can deliver on- planning decisions. To help this process, three diagnostic site training. Ensuring that payment options are available checklists have been developed. for hosts without online banking, leveraging P2P to expand More independent research is also needed to verify the digital financial inclusion for remote communities without impact of P2P on women and rural areas and to assess physical access to financial institutions, and providing its impact in the creation and diversification of markets. financing options to those looking to upgrade their rooms The “Road Map for Future Research” provided herein is a are other areas that could improve performance. good place to start. If regulatory challenges can be addressed, and P2P Case studies from around the world bridge the is directed toward areas without overtourism, P2P experience gap. For destinations that are working out accommodation may be a useful tool for emerging ways to facilitate and simplify business registration and tax destinations. Improving information sources, addressing codes, a collection of good practices could be very useful. the issues of regulation and taxation, helping low-income Where crowding is an issue, zoning policies may need hosts succeed, and promoting the product will help hosts, guests, and destinations maximize the potential of this new updating. Where growth and new accommodation are tourism product for inclusion while protecting the integrity needed, finding innovative ways to market and upgrade of communities and the safety and security of residents P2P accommodation may be a good path forward. Global and guests. case studies are offered throughout this report; the notes provide details of where to go for more information on each Please send comments and feedback to of these. tourism@worldbankgroup.org 47 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION Appendix: Rapid Diagnostic Checklists Destination Policy Diagnostic Regulation and Licensing • What is the current regulatory regime for P2P Definitions accommodation? Is it working? Is it enforced? • Do we have a consistent, easy-to-understand definition Why or why not? of “P2P accommodation”? If so, what is it? • Do we want to license P2P accommodations? If yes, how? • Do we have a consistent, easy-to-understand definition ₒ Do we have a suitable licensing system in place for of “community-led tourism”? If so, what is it? P2P accommodations? • What are the different types of P2P accommodation in ₒ Do we need to revise this? our destination? ₒ If not, what are the reasons and the implications? • Do we have a registration system for P2P Scope accommodation providers? ₒ Do we need to revise this registration system? • What is the current size and impact of the segment and • Do we want to levy tourism taxes on this segment? what is our plan for growth? Do we measure it? If yes, which taxes? • How are we collecting data on the size and the impact ₒ Do we have the system in place to collect the taxes? of the P2P accommodation economy? ₒ Do we want the platforms to collect the taxes for us? • What other data do we need for evidence-based • Do we have safety and health standards in place for P2P policymaking? Are we sharing this data? accommodation? If yes, are these working? ₒ Do we need to adjust current accommodation Stakeholder Mapping and Engagement standards? • Who needs to be involved in decision-making? Who are ₒ Are providers required to have insurance? the main stakeholders? ₒ Are we undertaking inspections? • Do we engage with P2P accommodation providers and • Are the current zoning laws and land use plans guests? If so, how? If not, why not? applicable to P2P accommodations? • How are our relationships with P2P accommodation ₒ Do we need to adjust the zoning plans? providers today? Friendly or strained? Why? ₒ Do the land use plans address P2P accommodations? ₒ How do the news and media report on P2P ₒ Do we need to address noise and parking issues? accommodation? • Who is responsible for enforcement? ₒ Who is at the table today? Who is missing? Why? ₒ Is the necessary dedicated team time committed to How will this be resolved? enforcement? ₒ Do we have the right expertise, including knowledge Tourism Strategy of how platforms work, APIs, and so on? • How does P2P accommodation fit into our national or ₒ Does the regulatory authority have the trust of regional tourism strategy? society? Why or why not? ₒ Does it match our vision for the destination? ₒ Do we need a grievance system for guests and How does it complement our current products? residents to voice complaints about violations or ₒ Which target markets are a good fit for this nuisances? segment? Do we market it proactively? If so, how? ₒ Do we have a budget for P2P engagement? If not, do we want one? (Why or why not?) Where will we get these resources? 48 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION Destination Taxation Diagnostic Entrepreneurship and Inclusion Diagnostic • What kinds of tourism taxes does our destination currently charge? Profile and Organization ₒ Arrival/tourist visa ₒ Per room • Which platforms are most prominent in our destination? ₒ Per bed ₒ Have we established a relationship with these ₒ Per day platforms? ₒ Other surcharges ₒ Who should represent the destination in this • Is P2P accommodation already included in the current relationship? taxation regime? (Y/N) • Are P2P providers currently organized? ₒ If yes, is its current inclusion sufficient? ₒ Is this functioning properly and can it be improved? ₒ If no, is there an easy way to integrate it [into current ₒ If not, what is the reason and what are the taxation regime]? implications? - Would we need to change a law? Inclusion - Would we need to create a new law(s)/rule(s)? ₒ How is P2P accommodation currently taxed? • Who are the current providers of P2P? ₒ Do we prefer to follow the tax regime for traditional • What are the gender and socioeconomic dimensions accommodation or do we wish to create something of P2P? new? Why or why not? • Do we have a diversity strategy (i.e., clear plans to ₒ What does our current tax regime say about who increase diversity within the tourism sector) today? can collect and pay these taxes? Why or why not? - Platforms • Which marginalized groups require support to enter the - Hosts market or to be more successful? - Other? • What are the main barriers to access for (potential) ₒ Are there other requirements to be authorized to pay providers? tax? Do those apply to P2P accommodation? • How can we address each of these? For example, registration, inspections, licensing. ₒ Access to a competitive type of P2P accommodation • Describe tax compliance for traditional accommodation ₒ Understanding market needs providers. ₒ Access to digital technology ₒ What percentage of compliance do we have among ₒ Access to finance traditional providers? ₒ Access to banking systems ₒ Is tax evasion a problem in our destination more generally? If so, how has it been handled? Marketing ₒ Are taxes paid online? Do we have an online portal • How can we promote P2P accommodation within our for the tax authority? overall destination marketing strategy? Why have we ₒ How is taxation enforced? not promoted it to date? ₒ Under local law, are P2P platforms legally authorized • What is current tax revenue used to cover? Are revenues sufficient? Why or why not? If not, what are our plans to remedy this? • Have we run analyses regarding revenue generation for P2P accommodation taxation? • Do we (or our team) have the expertise to create our own API (i.e., for tax revenue to be paid online)? 49 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION Sources Cited 1. Based on an extrapolation of 2005 data of 90 million 11. D. Murphy, “2.4 BN Smartphone Users in 2017, beds in all commercial accommodation. S. Gössling and Says Emarketer”, Mobile Marketing, April 28, 2017, http:// P. Peeters, “Assessing Tourism’s Global Environmental mobilemarketingmagazine.com/24bn-smartphone Impact, 1900–2050”, Journal of Sustainable Tourism 23(5) -users-in-2017-says-emarketer (2015): 639–659. 12. M. Sorrells, “What Travel Marketers Need to Know for 2. Mastercard, The Sharing Economy: Understanding the Digital Engagement”, PhocusWire, February 6, 2018, Opportunities for Growth, 2017, https://newsroom. https://www.phocuswire.com/Bing-Phocuswright mastercard.com/eu/files/2017/06/Mastercard_Sharing -digital-travel-marketing-study -Economy_v7.compressed2.pdf 13. Goldfarb and Tucker, Digital Economics, National Bureau 3. A. Goldfarb and C. Tucker, Digital Economics, National of Economic Research. Bureau of Economic Research Working Paper no. 23684, 14. O. Lobel, The Law of the Platform, San Diego Legal Studies 2017, http://www.nber.org/papers/w23684.pdf Paper no. 16-212, University of San Diego School of Law, 4. J. Hamari, M. Sjöklint, and A. Ukkonen, “The Sharing 2016, http://www.minnesotalawreview.org/wp Economy: Why People Participate in Collaborative -content/uploads/2016/11/Lobel.pdf Consumption”, Journal of The Association for Information 15. ITB Berlin, ITB World Travel Trends Report 2016/2017, Science and Technology 67(9) (2016): 2047–2059, 2017, https://www.itb-berlin.de/media/itb/itb_dl_all/ doi:10.2139/ssrn.2271971. itb_presse_all/World_Travel_Trends 5. Mastercard, The Sharing Economy. _Report_2016_2017.pdf 6. World Economic Forum (WEF), Digital Transformation 16. D. Ting, “Marriott Experiments with Home Sharing”, Skift, Initiative: Aviation, Travel and Tourism Industry, 2017, http:// April 23, 2018, https://skift.com/2018/04/23/marriott reports.weforum.org/digital-transformation/wp -experiments-with-homesharing/ -content/blogs.dir/94/mp/files/pages/files/wef-dti 17. K. May, “Airbnb Officially Opens Up Platform to Hotel -aviation-travel-and-tourism-white-paper.pdf Distribution”, Travel Weekly, February 7, 2018, http:// 7. Morgan Stanley, Surprising Airbnb Adoption Slowdown www.travelweekly.com/Travel-News/Hotel-News/ in US/EU, and What It Means for Hotels and OTAs, Airbnb-officially-opens-up-platform-to-hotel November 10, 2017, http://www.fullertreacymoney. -distribution com/system/data/files/PDFs/2017/November/16th/ Siteminder, Airbnb Is Now Live on SiteMinder’s Channel ARCOST20171023211633_73976052-b837-11e7 Manager, 2018, https://www.siteminder.com/channel -863e-cb02ae2926cb_DigitalPremium.pdf -manager/airbnb-hotels/ 8. S. Cao, “Airbnb Disrupts Traditional Housing Market— 18. Phocuswright, Airbnb to Focus on “End-to-End” Travel For the Better, Study Says”, Observer, November 22, Experiences, 2017, https://www.phocuswire.com/Airbnb 2017, http://observer.com/2017/11/airbnb-disrupts -end-to-end-travel-experiences -traditional-housing-market-for-the-better-study-says/ 19. R. J. Telles, “Digital Matching Firms: A New Definition in 9. United Nations World Tourism Organization (UNWTO), the ‘Sharing Economy’ Space”, ESA Issue Brief no. 01–16, UNWTO World Tourism Barometer, vol. March/April 2018, 2016, 1–27, https://www.esa.gov/sites/default/files/ http://cf.cdn.unwto.org/sites/all/files/pdf/unwto digital-matching-firms-new-definition-sharing _barom18_02_mar_apr_excerpt__0.pdf -economy-space.pdf 10. M. Rauch, “Hotel and Mobile Boost OTA Online 20. T. Takigawa, “Super Platforms, Big Data, and the Bookings”, Phocuswright, 2017, https://www. Competition Law: The Japanese Approach in Contrast phocuswright.com/Travel-Research/Research with the US and the EU”, ASCOLA Conference, New York -Updates/2017/Hotel-and-Mobile-Boost-OTA-Online University, June 21–23, 2018, http://www.law.nyu.edu/ -Bookings sites/default/files/upload_documents/Takigawa.pdf 50 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION 21. A. McAfee and E. Brynjolfsson, Machine, Platform, Crowd: 35. I. P. Tussyadiah, “An Exploratory Study on Drivers and Harnessing Our Digital Future (New York: Norton, 2017). Deterrents of Collaborative Consumption in Travel”, 22. The EU General Data Protection Regulation (GDPR), in Information and Communication Technologies in Tourism https://www.eugdpr.org/ 2015: Proceedings of the International Conference in Lugano, 23. M. Mazzucato, “Let’s Make Private Data into a Public Switzerland, February 3–6, 2015, edited by I. P. Tussyadiah Good”, MIT Technology Review, June 27, 2018, https:// and A. Inversini (Springer, 2015), 817–830. www.technologyreview.com/s/611489/lets-make 36. S. Gössling, personal interview, June 17, 2018. -private-data-into-a-public-good/amp/?__twitter_ 37. U. Gunter and I. Önder, “Determinants of Airbnb impression=true Demand in Vienna and Their Implications for the 24. Takigawa, “Super Platforms, Big Data, and the Traditional Accommodation Industry”, Tourism Economics Competition Law”. (2017), doi:1354816617731196. 25. “EU Consumer Rules: The European Commission and EU 38. D. Guttentag, S. Smith, L. Potwarka, and M. Havitz, Consumer Authorities Push Airbnb to Comply”, European “Why Tourists Choose Airbnb: A Motivation-Based Commission Press Release, July 16, 2018, http://europa. Segmentation Study”, Journal of Travel Research (2017), eu/rapid/press-release_IP-18-4453_en.htm doi.0047287517696980. See also Unfair Commercial Practices Directive, https:// I. P. Tussyadiah, “Factors of Satisfaction and Intention ec.europa.eu/info/law/law-topic/consumers/unfair to Use Peer-to-Peer Accommodation”, International -commercial-practices-law/unfair-commercial Journal of Hospitality Management 55 (2018): 70–80, -practices-directive_en doi:10.1016/j.ijhm.2016.03.005. 26. Mazzucato, “Let’s Make Private Data into a Public Good”. 39. Deloitte Access Economics, Economic effects of Airbnb 27. N. Trejos, “The Brands and Hotel Rooms of Marriott in Australia, 2017, https://www2.deloitte.com/au/en/ International, by the Numbers”, USA Today, January pages/economics/articles/economic-effects-airbnb-in 23, 2018, https://eu.usatoday.com/story/travel/ -australia.html roadwarriorvoices/2018/01/22/brands-and-hotel 40. S. Gössling, personal interview, June 17, 2018. -rooms-marriott-international-numbers/1053593001/ 41. A. Allaudeen, “Airbnb Sets Its Eyes on Working 28. Airbnb (2016), Senior Hosts in Europe, https://www. Millennials in Asia-Pac as Key Growth Drivers”, Business airbnbaction.com/wp-content/uploads/2016/09/ Insider Singapore, September 17, 2017, http://www. Airbnb_SeniorHostsEuropeReport_English_9-13-16.pdf businessinsider.sg/airbnb-working-millennials-asia-pac 29. Airbnb, Overview of the Airbnb Community in Africa, 2017, -key-growth-drivers/ https://www.airbnbcitizen.com/wp-content/uploads/ 42. F. Forno and R. Garibaldi, “Sharing Economy in Travel and sites/78/2017/10/Africa_Insight_Report.pdf Tourism: The Case of Home-Swapping in Italy”, Journal 30. Airbnb, “Overview of the Airbnb Community Across the of Quality Assurance in Hospitality & Tourism 16(2) (2015): Globe”, 2018, https://www.airbnbcitizen.com/data/ 202–220. 31. Airbnb, Airbnb and the Rise of Millennial Travel, November 43. CrowdRiff, The DMO’s Guide to Attracting More Travelers 2016, https://www.airbnbcitizen.com/wp-content/ with Instagram, 2017, https://cdn2.hubspot.net/ uploads/2016/08/MillennialReport.pdf hubfs/2719325/eBooks/SKIFT%20INSTAGRAM%20 32. Pew Research Center, “Shared: Home-Sharing EBOOK%20(v2).pdf Services”, in Shared, Collaborative and On-Demand: The 44. Airbnb, “Airbnb in South Africa”, 2018, https://www. New Digital Economy, 2016, http://www.pewinternet. airbnbcitizen.com/south-africa/ org/2016/05/19/shared-home-sharing-services/ 45. Organisation for Economic Co-operation and 33. Morgan Stanley, Surprising Airbnb Adoption Slowdown Development (OECD), “South Africa”, in OECD Better in US/EU, and What It Means for Hotels and OTAs, Life Index, 2018, http://www.oecdbetterlifeindex.org/ November 10, 2017, http://www.fullertreacymoney. countries/south-africa/ com/system/data/files/PDFs/2017/November/16th/ 46. D. Olick, “Homeowners Are Using Rental Income Earned ARCOST20171023211633_73976052-b837-11e7 Through Airbnb to Refinance Their Mortgages”, CNBC, -863e-cb02ae2926cb_DigitalPremium.pdf February 22, 2018, https://www.cnbc.com/2018/02/22/ 34. S. Gössling, personal communication, based on homeowners-are-using-airbnb-rental-income-to unpublished research, July 2018. -refinance-mortgages.html 51 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION 47. P. A. Coles, M. Egesdal, I. G. Ellen, X. Li, and A. 61. United Nations World Tourism Organization (UNWTO), Sundararajan, “Airbnb Usage Across New York City “New Platform Tourism Services (or the So-Called Neighborhoods: Geographic Patterns and Regulatory Sharing Economy)—Understand, Rethink and Adapt”, 2017. Implications”, forthcoming in Cambridge Handbook on the 62. R. Walker, “Airbnb Pits Neighbor Against Neighbor in Law of the Sharing Economy, October 12, 2017, http:// Tourist-Friendly New Orleans”, The New York Times, dx.doi.org/10.2139/ssrn.3048397 March 5, 2016, https://www.nytimes.com/2016/03/06/ 48. Ministry of Industries and Innovation, Road Map business/airbnb-pits-neighbor-against-neighbor-in for Tourism in Iceland, October 2015, https://www. -tourist-friendly-new-orleans.html stjornarradid.is/media/atvinnuvegaraduneyti-media/ 63. L. Ferré-Sadurni, “To Curb Illegal Airbnbs, New York media/Acrobat/Road-Map-for-Tourism-in-Iceland.pdf City Wants to Collect Data on Hosts”, New York Times, 49. Airbnb, Beyond Cities: How Airbnb Supports Rural America’s June 26, 2018, https://www.nytimes.com/2018/06/26/ nyregion/illegal-airbnb-new-york-city-bill.html Revitalization, 2017, https://www.airbnbcitizen.com/wp 64. Y. Ellepola, “Spiraling Growth of Accommodation -content/uploads/sites/8/2017/06/BeyondCities_Italy in the Informal Sector: Bane or Boon of Sri Lanka’s _EN.pdf Tourism?”, Talking Economics: Institute of Policy Studies of 50. A. Spenceley, “Local Impacts of Community-Based Sri Lanka (IPS), November 17, 2017, http://www.ips.lk/ Tourism in Southern Africa”, in Responsible Tourism: talkingeconomics/2017/11/17/spiraling-growth-of Critical Issues for Conservation and Development (2008): -accommodation-in-the-informal-sector-bane-or 159–187. -boon-of-sri-lankas-tourism/ “Need to Include Informal Sector to Boost SL’s Tourism— 51. See http://www.localalike.com PM”, Daily News, September 26, 2017, http://www. 52. See http://www.communityhomestay.com dailynews.lk/2017/09/26/business/129337/need 53. D. M. Salvioni. “Hotel Chains and the Sharing Economy in -include-informal-sector-boost-sl’s-tourism-pm Global Tourism”, Symphonya 1 (2016): 31–44. 65. G. Jericho, “The Dark Side of Uber: Why the Sharing 54. World Economic Forum (WEF), Understanding the Sharing Economy Needs Tougher Rules”, The Guardian, April Economy, 2016, http://www3.weforum.org/docs/WEF_ 18, 2016, https://www.theguardian.com/business/ Understanding_the_Sharing_Economy_report_2016.pdf grogonomics/2016/apr/18/uber-airbnb-sharing 55. Airbnb, Olympics Recap: Rio Hosts Champion Hospitality, -economy-tougher-rules-australia 66. N. Gurran, “Global Home-Sharing, Local Communities 2016, https://www.airbnbcitizen.com/olympics-recap and the Airbnb Debate: A Planning Research Agenda”, -rio-hosts-champion-hospitality/ Planning Theory & Practice (2017): 1–7. 56. Airbnb, Airbnb Hosts Set to Welcome Guests from Around the 67. K. Barron, E. Kung, and D. Proserpio, The Sharing Economy World for the Olympic Winter Games PyeongChang 2018, and Housing Affordability: Evidence from Airbnb, March 29, 2018, https://www.airbnbcitizen.com/airbnb-hosts-set 2018, https://ssrn.com/abstract=3006832 -to-welcome-guests-from-around-the-world-for-the 68. D. Wachsmuth, D. Chaney, D. Kerrigan, A. Shillolo, and -olympic-winter-games-pyeongchang2018/ R. Basalaev-Binder, The High Cost of Short-Term Rentals 57. D. Bevil, “Hurricane Irma: Airbnb Looks to Expand Free in New York City, McGill University, 2018, http://www. sharebetter.org/wp-content/uploads/2018/01/High Housing for Evacuees, Responders”, Orlando Sentinel, -Cost-Short-Term-Rentals.pdf September 14, 2017, http://www.orlandosentinel.com/ D. Wachsmuth, D. Kerrigan, D. Chaney, and A. Shillolo, weather/hurricane/os-bz-hurricane-irma-airbnb ShortTerm Cities: Airbnb’s Impact on the Canadian Housing -orlando-20170914-story.html Markets, McGill University, 2017, http://upgo.lab.mcgill. 58. Airbnb, Open Homes, 2018, https://www.airbnb.com/ ca/airbnb/ welcome/refugees 69. J. Dobbins, “How to Host on Airbnb Legally”, 59. Dechert, S. Homesharing with Airbnb: Greener than your The New York Times, April 7, 2017, https://www.nytimes. com/2017/04/07/realestate/how-to-host-on-airbnb usual hotel. Clean Technica. August 11, 2014, https:// -legally.html cleantechnica.com/2014/08/11/homesharing-airbnb 70. City of Cape Town, “City Launches Short-Term -greener-usual-hotel/ Rental Survey to find Balance of Shared Economy”, 60. J. M. Skjelvik, A. M. Erlandsen, and O. Haavardsholm, http://www.capetown.gov.za/Media-and-news/ Environmental Impacts and Potential of the Sharing Economy, City%E2%80%99s%20launches%20short-term%20 Nordic Council of Ministers, 2017, https://www.diva rental%20survey%20to%20find%20balance%20of%20 -portal.org/smash/get/diva2:1145502/FULLTEXT01.pdf shared%20economy 52 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION 71. R. Minder, “To Contain Tourism, One Spanish City Strikes J. Gutiérrez, J. C. García-Palomares, G. Romanillos, 86. a Ban, on Airbnb”, The New York Times, June 23, 2018, and M. H. Salas-Olmedo, “Airbnb in Tourist Cities: https://www.nytimes.com/2018/06/23/world/europe/ Comparing Spatial Patterns of Hotels and Peer-to-Peer tourism-spain-airbnb-ban.html Accommodation”, arXiv preprint, arXiv:1606.07138 (2016), 72. E. Johnston, “Airbnb Drops Nearly 80% of Its Private https://arxiv.org/ftp/arxiv/papers/1606/1606.07138.pdf Home Listings Ahead of New Peer-to-Peer Rental Law”, B. Faulkner, “Rejuvenating a Maturing Tourist 87. The Japan Times, June 6, 2018, https://www.japantimes. Destination: The Case of the Gold Coast”, Current Issues in co.jp/news/2018/06/06/business/airbnb-drops-nearly Tourism, 5(6) (2010), 472–520. -80-percent-private-home-listings-ahead-new-peer C. Buesa and P. Castan, “Barcelona declara la guerra a las 88. -peer-rental-law/ plataformas que anuncian pisos turísticos ilegales”, 73. K. Frenken and J. Schor, “Putting the Sharing Economy El Periódico, December 21, 2015, http://www.elperiodico. into Perspective”, Environmental Innovation and Societal Transitions 23 (2017): 3–10. com/es/barcelona/20151221/barcelona-multa-60000 74. N. Kontogeorgopoulos, A. Churyen, and V. Duangsaeng, -euros-airbnb-homeaway-por-anunciar-pisos “Homestay Tourism and the Commercialization of the -turisticos-ilegales-4768729 Rural Home in Thailand”, Asia Pacific Journal of Tourism Burgen, “Barcelona Cracks Down on Airbnb Rentals with 89. Research 20(1) (2015): 29–50. Illegal Apartment Squads”. 75. R. Fuentes and L. Navarrete, “Tourists in Hotels Versus UNWTO (2017). Tourism Highlights 2016. United Nations 90. Holiday Homes: Economic Impact and Characterization”, World Tourism Organization. Tourism Review International 20(4) (2016): 177–195. H. Morris, “Is It Safe to Visit Jamaica—And Which 91. 76. E. E. Rodenburg, “The Effects of Scale in Economic Caribbean Islands Have the Worst Crime Rates?”, Development: Tourism in Bali”. Annals of Tourism Research The Telegraph, Online, January 23, 2018, https://www. 7(2) (1980): 177–196. telegraph.co.uk/travel/destinations/caribbean/jamaica/ 77. World Economic Forum (WEF), Digital Transformation articles/is-jamaica-safe-to-visit-crime/ Initiative. Airbnb, Women Hosts Have Earned Nearly $20 Billion on 92. 78. S. Kessler, “No Internet, No Credit Cards, No Problem: Airbnb, March 5, 2018, https://press.atairbnb.com/ How Airbnb Launched in Cuba”, Fast Company, April 13, women-hosts-have-earned-nearly-20-billion-on 2015, https://www.fastcompany.com/3044895/no -airbnb/ -internet-no-credit-cards-no-problem-how-airbnb -launched-in-cuba World Bank, The World Bank Data: Jamaica, https://data. 93. 79. M. Zanona, “Airbnb’s Cuba Lobbying Blitz Pays Off”, worldbank.org/country/jamaica The Hill, October 11, 2017, http://thehill.com/ Jamaica Information Service, Minimum Wage Rates 94. homenews/administration/359703-airbnbs-cuba Effective March 1, March 1, 2016, http://jis.gov.jm/ -lobbying-blitz-pays-off minimum-wage-rates-effective-march-1/ 80. Airbnb, “Overview of the Airbnb Community Across 95. A. Aslam and A. Shah, “Taxation and the Peer-to-Peer the Globe”. Economy”, in S. Gupta, M. Keen, A. Shah, and G. Verdier 81. A. E. Young (2015), “How the Sharing Economy Is (Mis) (eds.), Digital Revolutions in Public Finance (Washington, shaping the Future”, Hospitality Net, September 2, 2015, D.C.: International Monetary Fund, 2017), https:// https://www.hospitalitynet.org/opinion/4071584.html www.imf.org/~/media/Files/Publications/WP/2017/ 82. The World Bank, DE4—Digital Economy for Africa. World wp17187.ash Bank Group, 2018. J. van Heerde, “In mijn ogen heeft Airbnb Amsterdam 96. 83. International Telecommunication Union, Global and enorm kwaad gedaan”, Trouw, December 28, 2017, Regional ICT Data, 2018, https://www.itu.int/en/ITU-D/ https://www.trouw.nl/samenleving/wethouder-airbnb Statistics/Pages/stat/default.aspx -schaadt-amsterdam~a81dd473/ 84. International Telecommunication Union, ICT Facts and J. T. Fox, “Global Cities Tighten Grip Around Airbnb 97. Figures 2017, https://www.itu.int/en/ITU-D/Statistics/ Documents/facts/ICTFactsFigures2017.pdf Sprawl”, Hotel Management, November 14, 2017, https:// 85. “Amsterdam to Ban Airbnb and Raise Tourist Tax, Tries www.hotelmanagement.net/legal/global-cities Curbing Disneyfication”, Travel and Tour World, May 17, -continue-to-tighten-grip-around-airbnb-sprawl 2018, http://www.travelandtourworld.com/news/ N. Gurran and P. Phibbs, “When Tourists Move In: How 98. article/amsterdam-to-ban-airbnb-and-raise-tourist Should Urban Planners Respond to Airbnb?”, Journal of the -tax-tries-curbing-disneyfication/ American Planning Association 83(1) (2017): 80–92. 53 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION 99. D. Stafford, “KC City Council Will Get Final Word on Airbnb Airbnb, How Do I Add a Payout Method?, 2018, https:// 104. Ordinance”, The Kansas City Star, August 15, 2017, http:// www.airbnb.co.in/help/article/54/how-do-i-edit-or www.kansascity.com/news/local/article167378607.html -change-my-payout-method 100. B. Wilkings, “Airbnb Is NOT Automatically Permitted in Sharing Economy, 2018, http://www.sharingeconomyuk. 105. Cape Town Apartments”, Home Times, September 20, com/ 2017, http://hometimes.co.za/2017/09/airbnb-is-not Airbnb, Home Sharing Clubs, 2018, https://community. 106. -automatically-permitted-in-cape-town-apartments/ withairbnb.com/t5/Home-Sharing-Clubs/ct-p/en_clubs 101. V. Couture, B. Faber, Y. Gu, and L. Liu (2018). E-commerce United Nations World Tourism Organization 107. Integration and Economic Development: Evidence (UNWTO), “New Platform Tourism Services (or the from China. Working Paper no. 24384 (National Bureau So-Called Sharing Economy)—Understand, Rethink of Economic Research, 2018), http://www.nber.org/ and Adapt”, 2017, https://www.e-unwto.org/doi/ papers/w24384.pdf abs/10.18111/9789284419081 102. Airbnbcitizen, Empowering People Through Home Sharing, Office for National Statistics, The Feasibility of 108. 2018, https://www.airbnbcitizen.com/empowering Measuring the Sharing Economy: November 2017 Progress -people-through-home-sharing/ Update, 2017, https://www.ons.gov.uk/economy/ How Airbnb Is Advancing Sustainable Tourism, November 29, 2017, https://www.airbnbcitizen.com/ economicoutputandproductivity/output/articles/ developmentroadmap/ thefeasibilityofmeasuringthesharingeconomy/ 103. S. Choudury, “Global Payments Firm Payoneer Reveals november2017progressupdate Triple-Digit Asia Volume Growth Every Year Since K. Yoon-mi, “Korea’s GDP to Include Digital Sharing 109. 2012”, CNBC, February 27, 2017, https://www.cnbc. Economy from 2019: BOK”, The Korea Herald, com/2017/02/27/payoneer-triple-digit-payment May 29, 2017, http://www.koreaherald.com/view. -volume-in-asia-since-2012.html php?ud=20170529000675 54 POLICY & POTENTIAL OF SUSTAINABLE P2P ACCOMMODATION © 2018 The World Bank Group