The dis­rup­tive now be­comes the new nor­mal

Jamaica Gleaner - - HOSPITALITY JAMAICA - David Jes­sop Hos­pi­tal­ity Ja­maica Writer

THE PROB­LEM with dis­rup­tive tech­nol­ogy is not just that it dis­rupts what we have be­come com­fort­able with, but that it has un­pre­dictable con­se­quences that can go far beyond what was in­tended.

Take Airbnb, a sim­ple idea that is a form of match­mak­ing be­tween trav­ellers and in­di­vid­u­als with a spare room or rooms. It of­fers a vis­i­tor some­where that is cheaper than a ho­tel, while pro­vid­ing a gen­uine sense of place and ex­pe­ri­ence of the coun­try they are visit­ing. So suc­cess­ful has this sim­ple idea be­come that the com­pany, which only started in 2008, now has around two mil­lion list­ings glob­ally in 34,000 cities and 191 coun­tries.

Although still in pri­vate hands, an­a­lysts sug­gest that Airbnb is now worth around US$30 bil­lion, a fig­ure close to the com­bined listed val­u­a­tions of Hil­ton and Hy­att, the next most valu­able hos­pi­tal­ity com­pa­nies in the world, at roughly US$30.5 bil­lion.

Airbnb’s growth in the short­term va­ca­tion home-rental busi­ness in the Caribbean has been “ex­plo­sive” ac­cord­ing to the Caribbean Ho­tel and Tourism As­so­ci­a­tion. Ear­lier this year, it re­ported that the com­pany now has around 25,000 list­ings, with the most being in the Do­mini­can Repub­lic, Cuba, Puerto Rico, Guade­loupe, Ja­maica, Can­cun, Mar­tinique, and Bar­ba­dos.

NEW PROB­LEMS

It has, how­ever, cre­ated a po­lit­i­cal co­nun­drum in the Caribbean. While gov­ern­ments recog­nise that it is en­abling many cit­i­zens, as hosts, for ex­am­ple, to pay off their mort­gage or to be able to im­prove their stan­dard of liv­ing, it has raised new prob­lems for both politi­cians and the in­dus­try.

Typ­i­cally, Airbnb of­fer­ings do not pay taxes, are not reg­u­lated in the same way that ho­tels are, and do not par­tic­i­pate in joint mar­ket­ing pro­grammes. They also present fis­cal chal­lenges to gov­ern­ments, which ob­serve that by in­creas­ing vis­i­tor num­bers, they in­di­rectly place pres­sure on pub­lic fa­cil­i­ties that taxes pay for. In ad­di­tion, there is ev­i­dence that they are re­duc­ing ca­pac­ity on air­lines for high­er­spend­ing ho­tel vis­i­tors and sug­ges­tions in some lo­ca­tions that nearby prop­erty prices are being pushed up as in­vestors, as op­posed to own­ers, sense com­mer­cial op­por­tu­nity.

But whether tourism pro­fes­sion­als and gov­ern­ments like what is hap­pen­ing or not, Airbnb and its com­peti­tors, like bud­get air­lines, have ex­panded the Caribbean’s tourism of­fer­ing to in­creas­ing num­bers of con­sumers, es­pe­cially mil­len­ni­als, by mak­ing the Caribbean af­ford­able. More­over, ac­cord­ing to most stud­ies, Airbnb lo­cal vis­i­tor spend is sig­nif­i­cantly greater and has more im­pact than that of ho­tel or cruise vis­i­tors as they make pur­chases di­rectly into the do­mes­tic econ­omy.

In a re­sponse in­tended to em­brace the dis­rup­tive, Aruba has re­cently es­tab­lished the first part­ner­ship be­tween Airbnb and a Caribbean coun­try. On November 7, the com­pany and the Aruba Tourism Au­thor­ity signed an agreement that en­ables the Aruba Tourism Au­thor­ity and Airbnb to ad­dress a range of is­sues, in­clud­ing tax­a­tion, host ac­com­mo­da­tion stan­dards, and reg­u­la­tions to en­sure that they are in line with Aruba’s tourism pol­icy. “The goal is to re­main com­pet­i­tive and cre­ate bal­ance. A healthy mix of on-is­land ac­com­mo­da­tions is cru­cial to the suc­cess of Aruba,” a state­ment from Rosella Tjin Asjoe-Croes, the CEO of Aruba’s Tourism Au­thor­ity, said.

MORE OP­TIONS

For its part, Airbnb, which re­port­edly hosted 13,000 in­ter­na­tional guests in Aruba and saw its hosts there earn, on av­er­age, US$4,400 in 2015, said that the col­lab­o­ra­tion will give those visit­ing Aruba “more trav­el­ing op­tions while pro­mot­ing sus­tain­able tourism as part of the lo­cal econ­omy”.

Ja­maica is ex­pected to be the next coun­try to sign a sim­i­lar agreement fol­low­ing re­cent meet­ings be­tween Min­is­ter of Tourism Ed­mund Bartlett and Airbnb of­fi­cials in Kingston.

What these and other de­ci­sions being taken by cities and gov­ern­ments around the world in­di­cate, in some cases through leg­is­la­tion with­out Airbnb’s in­volve­ment, is that the dis­rup­tive, con­sumer de­mand, and eco­nomic need in the shape of those own­ing the host prop­er­ties is caus­ing tourism, a largely con­ser­va­tive and pro­tec­tion­ist in­dus­try, to have to em­brace the in­com­ers. In short, the dis­rup­tive is about to be­come the new nor­mal.

FILE

Min­is­ter of Tourism Ed­mund Bartlett (left) an­nounced on November 14 that the Min­istry of Tourism is set to sign an agreement with Airbnb to aug­ment and drive growth within the tourism in­dus­try. Here, Bartlett greets Shawn Sul­li­van, Airbnb’s ex­ec­u­tive with re­spon­si­bil­ity for pub­lic pol­icy – Latin Amer­ica and the Caribbean; and Car­los Muñoz, head of pub­lic pol­icy and gov­ern­ment af­fairs, Airbnb, dur­ing a cour­tesy call on the min­is­ter at his New Kingston of­fices on November 14, 2016, where they dis­cussed plans to forge the part­ner­ship. A mem­o­ran­dum of un­der­stand­ing will be drafted and signed at a later date.

David Jes­sop

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