Answer to Question #150994 in Management for Anam

Question

What do believe whether, the changing regulatory environment was an opportunity for Airbnb to take advantage from? How did the Company react to it and what were the outcomes?

Answer 1

Airbnb and the Changing Regulatory Environment

Airbnb is a virtual site through which people can rent out their houses to travellers and tourists who would otherwise have been accommodated in hotels (Ferreri & Sanyal, 2018). Global issues surrounding housing markets have compelled policymakers to impose regulations around Airbnb. The current laws did not envisage an increase in technology-based short-term rental online sites like Airbnb. Historically, different cities around the world have put in place various regulatory requirements on short-term rentals. The regulatory measures have sought to protect consumers, ensure that the local community is not disrupted, and minimize the negative impact on the housing markets (Edelman & Geradin, 2015). Furthermore, more studies have sought to assess Airbnb's impact on the concept of home and the general transformation of a home.

Airbnb has approached the regulatory wars by effectively changing the debates on regulatory requirements in a way that the outcome has revolved around legality even though the company’s offers have always been illegal resulting in adverse outcomes. According to Crommelin et al. (2018), Airbnb has taken advantage of the existing regulatory requirements by basing its argument on the concept that it operates in free markets that are natural, efficacious, not affiliated to politics, family-oriented, and are technology-driven. Additionally, the company has taken advantage of these regulatory debates to position itself as an entity that is community-focused, sustainable, and well-governed, as well as focusing on transforming the meaning of “home” while economically empowering people. These regulatory requirements have resulted in the rapid expansion of the company through the creation of new markets that complement and compete with the traditional hospitality sector (Edelman & Geradin, 2015). Without clear regulations, the company has been successful by taking advantage of its robust business framework, distinctive and user-friendly online platform, and a relationship with authentic domestic travel agencies.

References

Crommelin, L., Troy, L., Martin, C., & Pettit, C. (2018). Is Airbnb a sharing economy superstar? Evidence from five global cities. Urban Policy and Research, 36(4), 429-444.

Edelman, B. G., & Geradin, D. (2015). Efficiencies and regulatory shortcuts: How should we regulate companies like Airbnb and Uber. Stan. Tech. L. Rev., 19, 293.

Ferreri, M., & Sanyal, R. (2018). Platform economies and urban planning: Airbnb and regulated deregulation in London. Urban Studies, 55(15), 3353-3368.