The Future of Hotel Chains: Branded Marketplaces Driven by the Sharing Economy
Brendan Richard
University of Central Florida, Orlando, USA
Email Address: [email protected]
Shane Cleveland
The Walt Disney Company
Email Address: [email protected]
Recommended Citation
Richard, B., & Cleveland, S. (2016). The future of hotel chains: Branded marketplaces driven by
the sharing economy. Journal of Vacation Marketing, 22(3), 239-248.
The final publication is available at Sage via
http://journals.sagepub.com/doi/full/10.1177/1356766715623827
Branded Marketplaces Driven by the Sharing Economy 1
ABSTRACT
Over the past few years the sharing economy has grown tremendously, disrupting the traditional
tourism industry via the mass deployment of exponentially increasing capacity. In this new
economy, ownership and access are shared by individuals creating, broadcasting and exchanging
their own products and services. Rather than compete against the sharing economy, hotel chains
have the opportunity to oversee this communal sharing and leverage the strength of their brands
by extending them to peer-to-peer (P2P) rentals. This potential future of P2P rentals offers an
attractive option for guests looking for a unique stay free of the current uncertainty of the
informal economy in safety, legality and quality. This paper introduces propositions regarding
the future state of the P2P rental market, presents a scenario detailing branded marketplaces,
discusses the drivers of change, explores branding considerations and offers recommendations
for future research.
Keywords: Sharing Economy, crowdsourcing, brand strategy, hotel, scenario
Branded Marketplaces Driven by the Sharing Economy 2
1. Introduction
Have you participated in the sharing economy recently? If so, you are not alone. The
sharing economy is rapidly deploying social technologies that are radically disrupting how
people experience products and services. Empowered with the ability to create, broadcast and
exchange their own products and services via online marketplace platforms, consumers are
sharing nearly everything, including their homes (Airbnb), cars (Lyft), clothes (ThredUP) and
even their food (Shareyourmeal). The sharing economy is also swiftly gaining acceptance by
nearly every measure – recent surveys project that consumers are prepared to double their usage
of collaborative websites (Owyang, 2014). This anticipated demand has driven a flood in capital
funding - in just two years (2011-2013) over 200 collaborative start-up companies have
generated over US $2 billion in combined funding (Owyang, Tran & Silva, 2013). The
consumer peer-to-peer rental market alone is currently estimated to be worth $26 billion
(Economist, 2013). Airbnb, the largest marketplace platform, has over 140,000 people staying in
rooms every night with listings in over 34,000 cities across 192 countries (Friedman, 2013).
Currently valued at over $20 billion by the private venture market, Airbnb has a market
capitalization greater than that of established hotel chains including Starwood, Wyndham and
Accor (Ali, 2015; Olsen & Kemp, 2015). In spite of its growth, though, Airbnb has been
criticized for inconsistent quality, unsafe rentals, illegal rentals and avoidance of accommodation
taxes.
The rapid ascent of peer-to-peer (P2P) rental marketplaces represents a potential threat to
established firms as it cannibalizes purchases and drives down room rates. Should traditional
hotel chains be concerned? One study found that in one market for every 10% increase in
Airbnb listings, hotel room revenue fell by 0.37% (Zervas et al., 2014). In this increasingly
collaborative economy, how can hotel chains innovate and adapt to accommodate the changing
environment? It has been proposed that hotel chains have the opportunity to develop or purchase
their own branded marketplace platforms rather than compete directly with the sharing economy
(Owyang, 2013; Sigala, 2015). A branded marketplace platform would be backed by the hotel
chain’s brand, resources, knowledge and expertise. Peer to peer (P2P) rentals via this platform
would alleviate issues currently associated with the sharing economy, offering consumers a more
reliable, consistent and higher quality experience (through more stringent standards and training)
as well as access to amenities provided by the hotel chain.
While there is a revenue opportunity for hotel chains to incorporate the sharing economy
into their business models, this approach poses interesting brand marketing questions. Hotel
chains have the ability to extend their brand by developing their own “branded marketplace”
platform (“e.g., “Hiltonbnb”). Various considerations factor into a successful brand extension,
but “Shared” products and services represent a challenge for traditional hotel chains because the
firms would find it difficult to exercise as much control over their partners (i.e., thousands of
individual participants) as they currently exercise with their management firm and property
ownership partners. O’Neill and Mattila (2010) note the issues that impact consumer satisfaction
Branded Marketplaces Driven by the Sharing Economy 3
in the industry with the addition of a third party between the hotel chains and the consumer.
Thus, there are special considerations to leverage current brand equity and avoid negative
reciprocal effects on the parent brand. For example, can a branded marketplace maintain
sufficient quality to fully leverage and extend brand trust? Similarly, would a branded
marketplace dilute or reinforce the core brand personality?
Predicting the future requires both an assertion that forecasted events will happen and the
explicit detailing of the underlying mechanisms that will cause the event to occur. As such,
relative to other forms of future research, predictions are proposed to be more scientific and
precise in their assertions (Bergman, Karlsson & Axelsson, 2010). Tourism researchers have
used this framework to provide structure to their visions of the future (Mistilis, Buhalis &
Gretzel, 2014; Yeoman & Mars, 2012). This paper provides propositions, organized into a
quadrant matrix (Pearce, 2012), that are related to the gap in the peer-to-peer rental market and
the business stakeholders that have the potential to address that opportunity. A branded
marketplace scenario is then posited (Wack, 1985; Formica & Kothari, 2008) to assist in
envisioning a future in which hotel chains meet this unmet need, and to stimulate hoteliers to
adopt a long-term outside-in perspective,. Next, the underlying drivers that will enable the
scenario to occur are presented. Finally, branding considerations and recommendations for
future research are discussed.
2. P2P rentals in the lodging industry
Travelers who want to take part in the sharing economy have no shortage of choices
when it comes to marketplace platforms that connect individuals seeking to share their
accommodations. Looking for a vacation rental? Try HomeAway, Flipkep, Housetrip or
villas.com. Taking a business trip and need a room for a night? Try Airbnb, Homestay or
Wimdu. Need a place to stay without making a payment? Try couchsurfing. The growing
supply of marketplace platforms has been fueled by a strong demand for person to person (P2P)
rentals from consumers. It has been estimated that sharing revenues represent approximately 5%
of the U.S. accommodation transactions in 2014, with P2P bookings accounting for roughly 2%
of the market (15). P2P bookings are expected to grow to as much as 10% of the market by 2025
thanks to a glut of underutilized assets (spare rooms) in the market, a favorable perception of
price value (Olsen & Kemp, 2015), and travelers’ preferences for genuine local experiences
(MacCaneel, 1973).
Despite the advantages of growth, price and unique experiences, P2P rentals via
marketplace platforms have several weaknesses relative to their more traditional competitors. As
one of the largest P2P rental marketplaces, Airbnb has faced challenges that are indicative of
those within the industry as a whole. Airbnb has faced criticism for encouraging illegal rentals,
dodging accommodation taxes and offering unsafe rentals. Accused of fostering informal
tourism accommodations, Airbnb faces legal challenges for encouraging the illegal rental of
assets. The issue stems from ordinances enacted by cities seeking to prohibit or limit short-term
Branded Marketplaces Driven by the Sharing Economy 4
rentals, limit rentals to specific geographic areas or limit the frequency with which a residence
can be rented (Gottlieb, 2013). In addition to challenging illegal rentals, local governments are
also taking issue with landlords who are avoiding paying accommodation taxes on otherwise
legal P2P rentals.
Proposition 1: There exists a gap in the market for a differentiated product that goes above and
beyond traditional peer-to-peer rental offerings, driven by the consumer need for a safe, legal,
higher quality, consistent product.
The proposed gap in the market for differentiated peer-to-peer rental accommodations
can be met by several different stakeholders in the industry. Individual hosts seeing the long-
term value in offering a differentiated product can independently take steps to improve their
product (e.g. obtaining additional insurance, more frequent safety inspections, and higher quality
amenities). Individual hosts are closest to the product, although they are frequently limited in
their ability to differentiate their product by their lack of access to capital and hospitality
expertise. The marketplace platform itself (e.g. Airbnb) could instigate the development of
premium offerings by branding products (e.g. “Airbnb Premium”) that meet certain quality and
safety standards and possess a minimum threshold of amenities. Marketplace platforms have
access to capital that their peer-to-peer renters don’t, but they lack the expertise in hotel
operations possessed by hotel chains. Hotel chains have access to capital and have an
established expertise in hotel operations, but are the most disconnected from the actual product.
Proposition 2: The provider of the business solution to meet the gap in the market exists on a
spectrum, where distance from the product (low to high) and access to resources (e.g. capital and
expertise) (low to high) are the variables of interest.
Figure 1: Differentiated Offering Provider Matrix
Proximity to
ProductLow Medium High
Low Hotel Chain
MediumMarketplace
Platform
High Individual Renter
Access to Resources
(e.g. Capital & Expertise)
Branded Marketplaces Driven by the Sharing Economy 5
3. Scenario: A branded lodging marketplace
In the future a traveler seeking out a premium offering in the peer-to-peer (P2P) rental
market will be able to browse “Hiliottbnb,” a branded marketplace platform, operating as a brand
within its hotel chain’s portfolio. Built on top of a white label marketplace software (e.g.
NearMeCO, ShareTribe), “Hiliottbnb” offers travelers a marketplace of guest homes and rooms
for P2P rental. While the underlying platform has been developed by a third party, the layer
visible to the consumer is indistinguishable from the hotel chain’s other online offerings
(including basic branding elements as color scheme, brand voice, etc.) supporting “the transfer of
brand identity from the parent brand to these extensions, and therefore facilitate(s) their
acceptance” (Lei, et al., 2008: p. 277). Functionally, the marketplace platform operates in a
similar manner to its competitors (e.g. Airbnb, Homestay or Wimdu) since the hotel chain has
the ability to compete on product and service quality rather than marketplace platform features.
With the support of the brand, supply chain, resources, knowledge and expertise supplied
by the hotel chain, consumers utilizing “Hiliottbnb” for P2P rentals would experience several
product features unique to hotel chains, including a centralized reservation service and customer
service department; quality guarantees; a managed rating system; quarterly maintenance
inspections; branded products (e.g. bedspread, toiletries); local housekeeping services; and a
virtual concierge. Consumers are assured of a certain level of product quality and safety that is
set by “Hiliottbnb” as a prerequisite for participation in the marketplace. Hosts using
“Hiliottbnb” are incentivized to participate in their branded marketplace platform via services
that seek to alleviate pain points for hosts. A centralized host services center provides guidance
and oversight to the P2P rental process, ensuring that the legality and tax implications of rentals.
Host services provided by the hotel chain ensure proper record keeping correlated to local, state
and national laws. The maximum allowable number of rentals and tax records are provided to
the host to ensure that the marketplace and associated hosts are operating within legal
requirements.
The peer-to-peer rental offerings provided by “Hiliottbnb” represent a safe haven of
consistency, reliability and quality in an industry known for the variability of its offerings. The
platform’s differentiated product features “enlarge the pie” by attracting new consumers to the
market who would not have traveled otherwise. Host services offer support and incentives for
hosts to participate in the hotel chains’ marketplace platform. Finally, the elimination of illegal
rentals and tax evasion have ensured the long-term viability of the platform and continued
governmental support.
4. Drivers of Change
4.1 Driver One: Increasing supply
What factors will continue to propel rapid growth within the lodging and travel segment
of the sharing economy? The industry is particularly well suited to the sharing economy since
Branded Marketplaces Driven by the Sharing Economy 6
transactions represent only the temporary use of an asset without a transfer of ownership. In
addition, there are few assets more underutilized in the marketplace than spare rooms and homes.
P2P rentals within the sharing economy provide value when they are significantly underpriced or
have no substitution relative to commercial competition. For example, Airbnb provides travelers
with a cost-effective accommodation that can represent a more local personalized experience
relative to its commercial competitors (Olsen & Kemp, 2015).
4.2 Driver Two: Price value
The sharing economy benefits from the attractive theme of sharing, the agility derived
from its decentralized nature, unique personalized offerings and most importantly price value.
The ability of the sharing economy to compete on price is due to the lower capital costs of non-
commercial asset owners and the lack of management costs associated with a non-commercial
business (Olsen & Kemp, 2015). Delivering on price value is critical because price has been
shown to be a major factor in hotel purchase decisions (Chu & Choi, 2000; Lockyer, 2005a,
2005b). An analysis of Airbnb offerings versus competitors via kayak.com assessing room rates
across six cities (Chicago, Montreal, Rio de Janeiro, San Francisco, Sydney and Venice)
revealed that significant cost savings exist when assessing shared rooms versus one- to two-star
hotels and private rooms versus three-star hotels (Guttentag, 2013).
4.3 Driver Three: Genuine experiences
Beyond mere cost savings, some travelers prefer the experiential benefits of staying in a
residence that these new platforms provide: the opportunity to reside in a ‘non-touristy’ area, the
feeling of being in a home, the advice that owners can provide about local experiences, the
ability to share in local experiences with the owners and the access to practical residential
amenities (Guttentag, 2013). One Airbnb guest was offered the use of a local mobile phone
(Yglesias, 2012), another Airbnb guest was offered the opportunity to dine with his host and go
out drinking in the evening (Gross, 2009). These experiences tap into some travelers’ preference
to participate in genuine local experiences, and to share in life at is lived by local residents.
Travelers desire to “try to enter back regions of the places they visit because these regions are
associated with intimacy of relations and authenticity of experiences” (MacCannell, 1973: p.
589). The yearning for genuine local experiences and access to ‘back regions’ are
accommodation features that are inherent to P2P rentals and representan advantage over
traditional hotel chains.
4.4 Driver Four: Concern for safety
While price and experience are important to travelers and will influence their selection of
where they will stay, Chu & Choi (2000) found the security of the hotel is rated as the top
priority by leisure travelers who comprise the category most likely to be engaging in the sharing
economy. The safety perception made by the guest in the peer-to-peer rental market is even
more important than in the traditional hotel industry due to the nature of the product offered.
Branded Marketplaces Driven by the Sharing Economy 7
Each offering is unique with its own host and history, both of which will vary in their level of
transparency. In the peer-to-peer rental market safety incidents are typically beyond the control
of the marketplace platform (e.g. Airbnb). Any liability insurance offered by Airbnb is
secondary (hosts must make claims to their primary insurers first, many of which frown upon
sharing economy rental activities) and does not extend outside of the United States (Lieber,
2015).
4.5 Driver Five: Seeking out quality and consistency
Chu & Choi (2000) found the “room and front desk” factor to be one of the most of the
most important to guests, along with “service quality.” Guests expected staff to provide efficient
services, understand requests and be helpful. Guests expected the room to be clean, check-in/out
service to be efficient, and the reservation system to be reliable. The perceived quality of service
is also influential in guests’ repeat purchase behavior (Chow, Garretson, & Kurtz, 1995).
5. What are the branding considerations?
The implications of the shared economy and a branded marketplace approach directly
involve brand management theory and practice. A branded marketplace represents an attempt to
extend the hotel company’s brand equity beyond the core brand, a common tactic in the lodging
industry. However, a branded marketplace poses specific considerations for brand equity in the
form of brand trust and brand personality, both of which help drive loyalty to the brand. Trust
indicates the consumer’s ability to rely on the information about the brand, while personality
indicates the consumer’s emotional touch points with the brand (O’Neill & Mattila, 2010). Thus,
a key goal for hotel brand management is to extend trust without diluting the brand personality
(O’Neill & Mattila, 2010).
5.1 Brand extensions. The concept of a branded marketplace implies a vertical line extension of
an existing brand into the same product category but different market. The “fit,” or perceived
consistency, of the extension with the parent brand is a key factor in the performance of the
extension (Aaker & Keller, 1990; Loken & John, 1993). Additionally, brand extensions have the
feedback capability of diluting or reinforcing the parent brand’s equity. Lane and Jacobson
(1995) note the potential for negative impacts to brand equity from brand extensions that do not
fit well with the core brand or represent the brand poorly. This has different implications based
on whether it is a step-up or step-down extension from the core brand - specifically, a step-down
extension generally has lower perceived risk but also has reduced positive feedback from
consumers (Lei et al., 2008) a finding that could influence the approach of a branded
marketplace.
In the lodging industry, brand extensions have been a primary driver of growth as they
allow travelers to select different products based on their immediate needs and still attain
reliability in an oftentimes unfamiliar setting (O’Neill & Mattila, 2010). Thus, the industry has
been a central setting for empirical explorations of how brand knowledge is extended to different
Branded Marketplaces Driven by the Sharing Economy 8
markets. Cabral (2000) finds that a higher quality firm will be better able to extend brand equity
through a brand extension as well as to enjoy positive performance from the extension. Also,
research indicates that brand extensions benefit from reduced costs (Aaker & Keller, 1990) and
are connected with improved performance (Court et al., 1999), a phenomenon that is magnified
when strong brand equity commands consumers’ loyalty (Hem et al., 2003). Thus, brand
extensions are not just about the extension of information about a brand but also the extension of
a relationship with consumers (Fournier, 1998).
5.2 Brand Trust and Quality. As brand extensions involve the extension of a relationship, brand
trust is needed for a relational exchange and thus underpins brand loyalty (Morgan & Hunt,
1994). Brand trust reinforces brand knowledge, the various dimensions of information about a
brand that a consumer possesses (Keller, 2003). A credible brand that has built trust has “lower
perceived risk and information costs” (Erdem et al., 2006: p. 34), enabling the consumer to rely
on their brand knowledge and the commitments of the firm. Specifically, brand trust relates to
both a firm’s perceived capability to consistently deliver on its quality commitments as well as
the firm’s perceived intentions toward delivering on these commitments (Delgado-Ballester &
Munuera-Alemán, 2005). When these basic components of brand trust are present, the firm is
better able to leverage brand equity through a brand extension (Reast, 2005).
Brand trust has been particularly explored as it relates to a firm’s ability to ensure and
convey quality. Perceived quality has been shown to strengthen brand loyalty in the lodging
industry as consumers feel better able to trust the brand commitments (Wilkins et al., 2009).
Reast (2005) notes that this is because quality leads to increased consumer satisfaction in the
basic performance of the firm. This research reflects Scott and Walsham’s (2005) suggestion
that trustworthy action builds and reinforces a trustworthy reputation. Thus, quality underpins
the renewable nature of brand trust: if the quality of a service or product delivers on consumer
expectations created by previous brand experiences, then brand trust is reinforced. Conversely,
trust can be undermined by nonperformance. This is because a trustworthy reputation is both
scalable and vulnerable (Scott & Walsham, 2005). The scalability of this quality suggests that
brand extensions can expand brand trust, whereas the vulnerability dimension suggests that
extensions can cause impairment to the parent brand’s equity, specifically if they do not cohere
to the parent brand. This is reaffirmed by Balachander and Ghose (2003), who examined the
reciprocal impacts of brand extensions. Brand trust is therefore critical to a successful brand
extension and a branded marketplace approach.
5.3 Brand Personality and Dilution. Brand loyalty is not just driven from a trust in the brand’s
reliability – it is also driven from consumers’ emotional attachment to a brand personality (Malär
et al., 2011). Aaker (1997) parameterized brand personality with five dimensions that represent
human characteristics ascribed metaphorically to brands. This model builds on Biel’s conception
(1993) of brand personality as the emotional component of the brand image. In this way, the
various components of a brand personality can represent actual or desired traits to the consumer
Branded Marketplaces Driven by the Sharing Economy 9
(Malär et al., 2011) and lead to both a deeper emotional connection to the brand and to increased
brand loyalty (Murphy et al., 2007).
Brand personality is especially critical for differentiation in areas such as hotel branding
where functional product differentiation is difficult to build and sustain (Li et al., 2014). This
phenomenon has been seen in both the upscale (Lee & Back, 2010) and economy segments (Li et
al., 2014) of the industry. Diamantopoulos et al. (2005) indicates that extensions actually have
no adverse effects on the parent brand personality, regardless of the fit or other impacts on the
parent brand equity. However, personality also requires coherence - these personalities can face
dilution (Diamantopoulos et al., 2005) if various actions of the firm are inconsistent.
The dual challenge of leveraging both brand trust and personality also represents a dual
opportunity. Scott and Walsham (2005) note that openness and collaborative problem-solving
reinforce trust, so an extension of the brand relationship into the sharing economy could increase
brand trust by exhibiting those qualities. Additionally, initiatives such as service guarantees can
further reinforce trust in the brand and mitigate the risk of brand dilution that may come with
such a marketplace (Lei et al., 2008). As with trust, demonstrated quality measures also
reinforce brand personality and its positive impact on performance (Tran et al., 2013).
Nevertheless, if a branded marketplace is positioned as a poor fit with the core brand, it can
sacrifice the consumer’s trust or the positive impact of a strong brand personality.
In addition to the context of these strategic branding questions, the nature of consumer
relationships with a brand also evolve with the concept of a branded marketplace. By
transforming the consumer’s basic experiences with the brand (Chang & Chieng, 2006), every
facet of the brand-consumer relationship could be impacted. Specifically, branded marketplaces
may potentially overturn established norms of consumers’ relationships with brands as well as to
help shape new norms (Aggarwal, 2004). As these norms undergird how values such as quality
and personality are communicated to the consumer, consumer responses would be heavily
impacted.
6. Research questions
6.1 Platform considerations
To realize the opportunity of establishing branded marketplace platforms, consumer
research is needed to better understand consumer preference and potential purchasing behavior
for branded P2P rentals. Specifically, what premium will a branded rental command, and to
what extent will it cannibalize hotel chain’s existing lower tier offerings (e.g. Fairfield Inn by
Marriott, or Hilton Garden Inn)? Additionally, further research needs to explore what level of
product features and service quality will be expected by the consumer. Will amenities like
branded toiletries and bedspreads, money-back guarantees or housekeeping service be
sufficiently valued by consumers? Finally, the pricing structure will need to be explored to
determine what should be included in the base price, and what should be offered as an upcharge.
Branded Marketplaces Driven by the Sharing Economy 10
A variety of research methods will be required in order to fully explore the proposed
research questions regarding pricing, cannibalization, product features and service quality. A
pricing and product survey and conjoint analysis (Iyengar et al., 2008) in which different features
are offered at different price points will assist hotel chains in better understanding what
differentiated value is offered by branded P2P rentals as well as what features should be included
in the product offering. Hotel chains currently employ a hands-on methodology featuring mock
hotel rooms in which employees and consumers can experience product features firsthand
(Penner, Adams & Rutes, 2013). This methodology can be extended to include P2P rentals, via
mock-up house, apartment, and room rentals. Rather than placing test rooms at the corporate
headquarters or onsite at a property, these mock-up P2P rentals can be located in their natural
setting, a house or apartment purchased or rented by the hotel chain. Employees or consumers
can be offered the opportunity to stay in these mock-up P2P rentals. While consumers are
staying at these branded P2P rentals their perceptions and experiences can be accessed via a
variety of methodologies. Consumers can be asked to keep a journal; they can be provided with
a post-stay survey featuring measures including “SERVQUAL” (Parasuraman et al., 1988), they
can participate in a post-stay online focus group, and with their approval they could even be
observed during their stay.
6.2 Branding Considerations
To address the issues of branding in the context of a brand extension, consumer research
is needed to address the basic brand strength to determine if there would actually be benefits
from the extension. Specifically, is the target market familiar with the core brand, and what is
their level of trust and commitment to that brand? Additionally, further research needs to
explore the fit of a branded marketplace with the hotel chain brand: does the branded
marketplace cohere with the current brand positioning? Finally, research needs to address the
challenges of the extension: as a “step-down” extension, does the branded marketplace pose a
greater risk of diluting the brand, and does the extension have a complementary or opposing
personality to the core brand? More specific research questions relating to consumer-brand
relationships also arise from the paradigm. Specifically, does the risk of “misfit” (Beverland et
al., 2006) threaten the consumer’s positive responses to the brand? Also, is a branded
marketplace a step toward involving the consumer as an active participant rather than a passive
observer in the brand storytelling process (Woodside, 2010)?
The evaluation of these branding concerns can be studied using a variety of tools. The fit of
the current brand and the branded marketplace can be evaluated through a market study of the
extension’s positioning utilizing Aaker and Keller’s (1990) model of consumer reactions to
brand extensions. Similarly, Aaker’s (1997) 42-item brand personality model can be deployed
with focus groups and studies to explore the 5 dimensions of the model in relation to a branded
marketplace: sincerity, excitement, competence, sophistication, and ruggedness. Although the
scale has faced some criticism over its applicability (Austin et al., 2003) it has been utilized to
successfully explore brand personality over a variety of environments (Li et al., 2014; Lee &
Branded Marketplaces Driven by the Sharing Economy 11
Back, 2014; Diamantopoulos et al., 2005). Finally, a context-specific adaptation of Garbarino’s
(1999) measurements of brand trust could be leveraged to examine current and projected levels
of trust and commitment.
7. Conclusion
Given the rapid growth of the shared economy within the lodging industry in terms of
both available room nights and market valuation, traditional hotel chains would be wise to
consider strategies that avoid direct competition with online marketplace platforms. Rather than
risk cannibalization of existing brands or facing established competitors, offering a differentiated
product within the sharing economy represents an opportunity for traditional hotel chains to
significantly expand their market share. Since the sharing economy is comprised of
underutilized existing assets, hotel chains can bypass the lengthy process of partnering with
property ownership and the wait times required to build new properties. Instead additional
capacity can be turned on almost instantaneously. Hotel chains only need to ensure the safety
and quality of the product, and provide training and amenities to the host. While it can take
years to build a new hotel property, a P2P rental could be operational in months or even weeks.
The challenge hotel chains face is transferring their brand, knowledge and resources from their
current model to the more disruptive sharing economy model. While expertise in training and
customer service transcends product offerings, the ability to manage a disparate collection of P2P
rentals across a multitude of hosts will be an acquired skillset. Culturally hotel chains will have
to adopt flexible policies that allow for the inherent variety within the P2P rental market.
The scenario proposed in this article is limited to the implementation of an independent
standalone marketplace platform in which the hotel chain has the advantage of full control over
the product and the revenue, but also the risk inherent in going it alone. An alternative solution
to an independent platform is offering branded P2P rentals embedded within a currently existing
platform (e.g. Airbnb, Homestay or Wimdu). This alternative raises additional branding
considerations related to co-branding that would need to be explored further. For example, co-
branding adds an additional brand to the relationship between the core brand and the consumer,
which could negatively impact brand equity as it diluted the various connotations of the brand
with new connections (Keller, 2003). Conversely, some of those new connections could prove
more durable if they align with existing dimensions of the brand, providing positive
reinforcement to overall brand equity (Keller, 2003). In addition to branding considerations,
offering branded products via a third-party platform would disadvantage hotel chains’ ability to
control the product and protect revenues, similar to the rise of online travel agents (Starkov,
2003).
The explosive growth and inverted structures of the sharing economy has impacted many
industries, but few as much as the lodging industry. The basic marketing challenge for hotel
chains is how to apply critical brand elements, such as trust and personality, toward this
opportunity while still preserving and reinforcing core brand equity. This paper offers a way
Branded Marketplaces Driven by the Sharing Economy 12
forward for additional research on the marketing implications of the sharing economy on the
lodging industry as well as a scenario of a branded marketplace platform that would allow hotel
chains to extend their core brand equity and capitalize on the sharing economy.
ACKNOWLEDGEMENT
We would like to acknowledge Jeremiah Owyang, Founder—Crowd Companies, who provided
us with guidance on the topic and whose work in the field of the sharing economy inspired us to
write this article.
Branded Marketplaces Driven by the Sharing Economy 13
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