the so called "sharing economy"

"sharing, collaborative, peer to peer, access ... economy"... however, there is nothing to share and not possible to pay by apples! What a surprise!

I was surprised however, when I was reading the European Parliament briefing (Jan 2017), about Tourism and sharing economy: “a growing number of individuals are proposing to share temporarily with tourists what they own...”

Well, let's give an end to this word play. UNWTO has made it clear: it is about "private tourism services through digital platforms". This term includes the digital side / the platforms and the actual supply side the accommodation, or what HOTREC names as STPAR - Short Term Private Accommodation Rentals. But, as the so called sharing economy, beyond the accommodation also covers ground transportation, food and attractions, we rather need another descriptive acronym for this extra supply/additional offer. For the needs of this article - I suggest the term “indoff”, deriving from the “individual offer”.

Now, instead of debating about the impact and implications of "indoff" on tourism development, I would rather suggest to define their role or at least to put a framework for their role on tourism development.  Because, they do play a role, they must have a role!

The last 5 years, "indoff" do enjoy a fantastic growth rate at all of their KPIs. They have their own market share, their own fans (=loyal customers), their own associations. They are here to stay, they are here as part of the hospitality industry, as part of the travel and tourism sector.

"Indoff" seem to have taken the traditional hospitality sector out of its comfort zone. It will not be a big surprise, after some years, if the "indoff' will be mentioned/referred as one among the drivers for innovation in the travel and tourism industries.

There are many sets of pros and cons of "indoff" according to their advocates and critics.  Most of them agree that now the consumers are offered a wider range of services and more price levels. Also, more differentiation and somehow sophistication. On the other side, there are worries about safety standards, pressure on local house markets and unfair competition against the hotel industry.

While both sides target tourists, hotels have to pay various taxes, comply with labour laws, environmental / safety and other regulations, quality standards, need licenses and every second day they welcome an inspector from the local authorities.  Critics mostly focusing that in many cases "indoff" avoid to pay taxes, which is serious, very serious!

Now, let's put ourselves in the shoes of policy makers. Tourism policy makers.

Developing tourism means, among others, creating jobs. Many studies have shown that for 100 hotel beds, a minimum of 16 full time jobs are created. What is the respective number in "indoff" businesses?  Who are they? Do these people feel happy and safe in their jobs? What skills are needed?  Do we need to adjust/change our labour policies?  Shall we abandon tourism education on vocational level?

Developing tourism means attracting investment. Investment planning requires full control of supply size. What is the size of this extra supply? How is it distributed within the area of a tourist destination?  Can we make a decision on where to direct the investment, unless we know the size of this part of the industry? Unless we measure and manage supply? Registration therefore, it is a must!

Developing tourism means also efficient demand management: what is the "indoff ‘s" share of overnights? What are the profiles of their customers?

Concluding, I would suggest that a constructive discussion can start from the following points:

  • "indoff" is a crucial part of the travel and tourism industry,
  • "indoff" should be in favour of fair competition (pay taxes, respect environment / labour laws etc),
  • "indoff" need a clear definition for the role they have to play for the sustainable development of the tourism sector.

As UNWTO suggests, any discussion aiming to bring positive results needs good intakes of vitamin C: collaboration, cooperation, coordination!