Airbnb, Technological Change and Disruption in Barbadian Tourism: A Theoretical Framework

Lorde, Troy and Joseph, Tennyson S D (2018): Airbnb, Technological Change and Disruption in Barbadian Tourism: A Theoretical Framework. Forthcoming in: Third World Quarterly

Abstract

This paper focuses on how Airbnb, an internet platform which has created the possibility for mass participation in the tourism market, is resulting in class conflict between new entrants and the ‘traditional’ tourism industry. Specifically, it studies how traditional tourism interests in Barbados have responded to Airbnb by seeking to restrict participation in the industry and presents this as a microcosm of broader class transitions and conflicts associated with new technologies. The paper utilises a Marxist theoretical perspective buttressed by Joseph Schumpeter’s theory of ‘creative destruction’ – places emphasis on the process of destroying productive systems to understand how specific industries expand and survive – and Clayton Christensen’s notion of ‘disruptive innovation’ – a process by which a disruptive product transforms a market – for studying how transformations in technology are impacting the tourism industry in Barbados. Its aim is to provide an account of how the process of disruption is unfolding in Barbados by highlighting the reactions of the main hotel lobby group to Airbnb, while also applying the ideas of Marx, Schumpeter and Christensen as useful theoretical lenses through which to examine the unfolding of the process of disruption of settled class and historical control of a dominant economic sector by new technologies.

• Item Type: MPRA Paper
• Language: English
• Keywords: Airbnb Marxist theory creative destruction disruptive innovation tourism industry class relations
• Subjects: B - History of Economic Thought, Methodology, and Heterodox Approaches > B5 - Current Heterodox Approaches > B51 - Socialist ; Marxian ; Sraffian; L - Industrial Organization > L8 - Industry Studies: Services > L83 - Sports ; Gambling ; Restaurants ; Recreation ; Tourism; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development; Z - Other Special Topics > Z1 - Cultural Economics ; Economic Sociology ; Economic Anthropology > Z13 - Economic Sociology ; Economic Anthropology ; Social and Economic Stratification

References

Airbnb. “About Us.” Airbnb. Accessed April 4, 2017. https://www.airbnb.com/about/about-us

Airbnb. “How Do Star Ratings Work?” Airbnb. Accessed April 4, 2017. https://www.airbnb.com/help/article/1257/how-do-star-ratings-work

Airbnb. “Superhost: Recognizing the Best in Quality.” Airbnb. Accessed April 4, 2017. https://www.airbnb.com/superhost

Baker, D. “Don’t Buy the ‘Sharing Economy’ Hype: Airbnb and Uber Are Facilitating Rip-offs.” The Guardian. May 27, 2014. https://www.theguardian.com/commentisfree/2014/may/27/airbnbuber-taxes-regulation

Barbados Entrepreneurship and Tourism Association (BETA). Interview with President of BETA. Interview by authors. Bridgetown, Barbados, October 27, 2018.

Barbados Hotel and Tourism Association (BHTA). “Our Mission, Vision, and Values.” BHTA. Accessed April 1, 2019. http://www.bhta.org/index/about-bhta/our-mission-vision-values.html

Barbados Today. “Airbnb Flying High in Barbados.” Barbados Today. February 8, 2017. https://www. barbadostoday.bb/2017/02/08/airbnb-flying-high-in-barbados Barbados Today. “Out of Control.” Barbados Today. February 6, 2017. https://barbadostoday.bb/2017/02/06/out-of-control-2

Beckles, H. Corporate Power in Barbados – The Mutual Affair: Economic Injustice in a Political Democracy. Bridgetown: Lighthouse Communications, 1989.

Benkler, Y. The Wealth of Networks: How Social Production Transforms Markets and Freedom. New Haven, CT: Yale University Press, 2006.

Botsman, R. “The Sharing Economy Lacks a Shared Definition.” Collaborative Consumption, 2013. Accessed April 2, 2017. http://www.collaborativeconsumption.com/2013/11/22/the-sharingeconomy-lacks-a-shared-definition

Botsman, R., and R. R. Rogers. What’s Mine is Yours: How Collaborative Consumption Is Changing the Way We Live. London: HarperCollins Business, 2011.

Bower, J. L., and C. M. Christensen. “Disruptive Technologies: Catching the Wave.” Harvard Business Review 73, no. 1 (1995): 43–53.

Christensen, C. M. The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Boston, MA: Harvard Business School Press, 1997.

Christensen, C. M. “The Ongoing Process of Building a Theory of Disruption.” Journal of Product Innovation Management 23, no. 1 (2006): 39–55. doi:10.1111/j.1540-5885.2005.00180.x.

Christensen, C. M., and M. E. Raynor. The Innovator’s Solution: Creating and Sustaining Successful Growth. Boston, MA: Harvard Business School Press, 2003.

Cockayne, D. “Sharing and Neo-Liberal Discourse: The Economic Function of Sharing in the Digital on-Demand Economy.” Geoforum 77 (2016): 73–82. doi:10.1016/j.geoforum.2016.10.005.

Cohen, M., and C. Zehngebot. “What’s Old Becomes New: Regulating the Sharing Economy.” Boston Bar Journal 58, no. 2 (2014): 2. Accessed April 1, 2019. https://bostonbarjournal.com/2014/04/01/whats-old-becomes-new-regulating-the-sharing-economy

Edelman, B. G., and D. Geradin. “Efficiencies and Regulatory Shortcuts: How Should We Regulate Companies like Airbnb and Uber?” Stanford Technology Law Review 19, no. 2 (2016): 293–328.

Frenken, K., and J. Schor. “Putting the Sharing Economy into Perspective.” Environmental Innovation and Societal Transitions 23 (2017): 3–10. doi:10.1016/j.eist.2017.01.003.

Government of Barbados. White Paper on the Development of Tourism in Barbados. Bridgetown: Strategic Solutions Inc./Dr. Kerry Hall, 2012.

Guttentag, D. “Airbnb: Disruptive Innovation and the Rise of an Informal Tourism Accommodation Sector.” Current Issues in Tourism 18, no. 12 (2015): 1192–1217. doi:10.1080/13683500.2013.827159.

Horton, J. J., and R. J. Zeckhauser. “Owning, Using and Renting: Some Simple Economics of the Sharing Economy.” Social Science Research Network (SSRN), February 10, 2016. https://ssrn.com/abstract=2730850

Jackman, M., and T. Lorde. “Examination of Economic Growth and Tourism in Barbados: Testing the Supply-Side Hypothesis.” Tourismos: An International Multidisciplinary Journal of Tourism 7, no. 2 (2012): 203–215.

Joseph, T. “Sandals Desperation.” Nation News. November 11, 2013. http://www.nationnews.com/ nationnews/news/14731/sandals-desperation

Karch, C. “The Growth of the Corporate Economy in Barbados: Class/Race Factors, 1890-1977.” In Contemporary Caribbean: A Sociological Reader, edited by S. Craig, 213–242. Maracas: College Press, 1981.

Kathan, W., K. Matzler, and V. Veider. “The Sharing Economy: Your Business Model’s Friend or Foe?” Business Horizons 59, no. 6 (2016): 663–672. doi:10.1016/j.bushor.2016.06.006.

Koopman, C., M. Mitchell, and A. Thierer. “The Sharing Economy and Consumer Protection Regulation: The Case for Policy Change.” Journal of Business, Entrepreneurship and the Law 8, no. 2 (2015): 529–545.

Lehrer, E., and A. Moylan. “Embracing the Peer-Production Economy.” National Affairs 56 (2014): 51–63.

Lorde, T., B. Francis, and L. Drakes. “Tourism Services Exports and Economic Growth in Barbados.” The International Trade Journal 25, no. 2 (2011): 205–232. doi:10.1080/08853908.2011.554788.

Lorde, T., J. Jacob, and Q. Weekes. “Price-Setting Behavior in the Tourism Sharing Economy: A Hedonic Price Analysis of Airbnb Listings in the Caribbean.” Tourism Management Perspectives 30 (2019):251–261. doi:10.1016/j.tmp.2019.03.006.

Lorde, T., S. Lowe, and B. Francis. “Do Tourism Receipts Contribute to Current account Deficit Sustainability in SITES: A Case Study of Barbados.” International Journal of Tourism Research 15, no. 6 (2013): 620–624. doi:10.1002/jtr.1907.

Loveridge, A. “Tourism Matters: Airbnb Giving Hotels a Run.” Nation News. April 1, 2014. Accessed January 22, 2017. http://www.nationnews.com/nationnews/news/7484/tourism-matters-airbnbgiving-hotels-run

Loveridge, A. “Tourism Matters: Take Stock of Rooms.” Nation News. January 1, 2015. Accessed January 22, 2017. http://www.nationnews.com/nationnews/news/61444/tourism-matters-stock

Mandle, J. “Barbados between Growth and Development.” Unpublished Paper Presented at The University of the West Indies, Cave Hill, March 2, 2016.

Mandle, J. “Achieving Structural Change in Barbados.” Unpublished Paper Presented at The University of the West Indies, Cave Hill, October 4, 2017.

Market Revolution. “Sharing Economy & Collaborative Consumption.” 2013. Accessed August 10, 2017. https://www.slideshare.net/MarketRevolution/shsu-sharing-economy-collaborativeconsumption

Marx, K. The Poverty of Philosophy (with an Introduction by Frederick Engels). New York: International Publishers, 1982.

Marx, K., and F. Engels. “4 Letters on Historical Materialism. In Marx & Engels: Basic Writings on Politics and Philosophy, edited by L. S. Feuer, 434–443. Glasgow: Fontana/Collins, 1969.

Nation News. “Hotels May Have to Close.” Nation News. November 15, 2013. http://www.nationnews. com/nationnews/news/38329/intimate-break-sandals

Nation News. “Intimate Group wants Break like Sandals’.” Nation News. November 22, 2013. http:// www.nationnews.com/nationnews/news/14831/-hotels-close

Nation News. “Sealy says Tourism for All.” Nation News. February 7, 2013. http://www.nationnews. com/nationnews/news/9908/sealy-tourism

Nation News. “Welcoming Tourists the Duty of All.” Nation News. December 11, 2014. http://www. nationnews.com/nationnews/news/60586/editorial-welcoming-tourists-duty

Oh, S., and J. Y. Moon. “Calling for a Shared Understanding of the ‘Sharing Economy’.” In Proceedings of the 18th Annual International Conference on Electronic Commerce: e-Commerce in Smart Connected World, Article No. 35. Association for Computing Machinery (ACM), New York, NY, 2016.

Ponte, E. B., E. Carvajal-Trujillo, and T. Escobar-Rodriguez. “Influence of Trust and Perceived Value on the Intention to Purchase Travel Online: Integrating the Effects of Assurance on Trust Antecedents.” Tourism Management 47 (2015): 286–302. doi:10.1016/j.tourman.2014.10.009.

Ranchordas, S. “Does Sharing Mean Caring? Regulating Innovation in the Sharing Economy.” Minnesota Journal of Law, Science and Technology 16, no. 1 (2015): 414–475.

Rauch, D., and D Schleicher. “Like Uber, But for Local Government Policy: The Future of Local Regulation of the ‘Sharing Economy’.” George Mason Law & Economics Working Paper No. 15-01, 2015. http://ssrn.com/abstract=2549919

Resnick, P., and R. Zeckhauser. “Trust Among Strangers in Internet Transactions: Empirical Analysis of eBay’s Reputation System.” In The Economics of the Internet and E-Commerce (Advances in Applied Microeconomics), edited by M. R. Baye, Vol. 11, 127–157. Bingley, UK: Emerald Group Publishing, 2002.

Russell, H. “Wild Coot: The Sandals Folly.” Nation News. September 12, 2016. http://www.nationnews. com/nationnews/news/85400/wild-coot-sandals-folly

Schumpeter, J. Capitalism, Socialism and Democracy. New York: Harper & Row, 1942. Third Edition Reprinted by New York: Harper Perennial Modern Classics, 2008. Page references are to the 2008 edition.

Tussyadiah, I. P., and J. Pesonen. “Impacts of Peer-to-Peer Accommodation Use on Travel Patterns.” Journal of Travel Research 55, no. 8 (2016): 1022–1029.

Wan, Y., and N. Makoto. “The Reliability of Online Review Helpfulness.” Journal of Electronic Commerce Research 15, no. 3 (2014): 179–189.