“Shared Accommodation” Model in the 4.0 Industry Era: Airbnb Channel Application
22 April, 2022
Tourism is increasingly developing, the needs of modern tourists are not only sightseeing and relaxation but also experiencing culture and typical specialties besides having a deep understanding of indigenous people. Therefore, the form of sharing accommodation became popular, Airbnb emerged as the leader because of its worldwide coverage as well as the value of the service it brought to the hosts and users of this service. However, each national region has a specific culture and business institution that brings perceived service value to tourists in a specific way. This research paper aims to help stakeholders have a better understanding of the factors that affect tourists’ perceived value when using Airbnb services in the Vietnamese market. From this background, practical solutions with the goal of providing appropriate action solutions for homeowners, service users and policies for state management agencies for the management of services are provided regarding this accommodation-sharing channel.
The current “Airbnb” concept
Thanks to the development of the tourism industry and the accommodation needs of modern tourists, a new home-sharing platform was born, in which, Airbnb is the “pioneer” of this platform. Although the Airbnb model has reached quite evenly to countries around the world, it is still not completely popular in Vietnam. Therefore, it is important to understand the current status of the application of the Airbnb channel by hosts and travelers as well as the legal aspects of service management in order to propose solutions to help hosts, customers and country.
Unlike the foreign market, Vietnamese people often think simply of the shared accommodation model as a homestay business or short-term rental for tourism purposes. However, not all shared accommodation models are shared by guests, this is the case that where the owner buys an apartment, decorates and rents it out is still called ‘sharing’. Airbnb is a typical example of a sharing accommodation model with the original idea of providing a bed and breakfast for guests; this type of accommodation, despite having the basic functions of a place to stay, lacks the high-class services associated with a hotel or a family atmosphere like a homestay for international students living with a host family. In addition, customers of the sharing accommodation market span many different age and occupation segments. The current models of sharing accommodation are further promoted thanks to digital platforms listed as websites and smartphone apps.
This model of sharing accommodation is both beneficial to tenants and generates income for homeowners as well as contributes to the market economy development. Most of the hosts believe that the biggest motivation when joining this channel is “Airbnb stands out to help resolve conflicts between hosts and guests”, facilitating core transactions related to electronic payment issues and providing the ability to control the room rental timing.
The situation of shared accommodation model in Vietnam in the digital transformation period
When Airbnb first appeared in Vietnam in 2015, that Airbnb’s starting number of rooms was 1,000 did not absolutely attract customers with this system. However, in the 2016 – 2018 period, the fact that the list of rooms on Airbnb grew significantly with the number of nearly 100,000 apartments put into operation in Ho Chi Minh City. Hanoi (212%) and Da Nang (225%) are the destinations with the highest growth of apartments/rooms registered for rent via Airbnb channel with more than 18,000 hosts and 40,000 rooms (according to ‘Homesharing Vietnam Insights’ Report of Outbox Destination Management and Consulting Services Co., Ltd., 2019, pp. 5-15). In Vietnam, this type of Airbnb service has evolved differently from the original definition. Service providers (Hosts) can share an empty room or their entire house to earn a legal profit without being legally bound.
The accommodation service through the Airbnb channel has become a formidable competitor to other types of accommodation. A look at some statistics in Outbox Consulting’s ‘Homesharing Vietnam Insights’ report for the 2015 – 2019 period shows that the number of Airbnb rooms in Vietnam reached 40,804 – an increase of more than 40 times higher after only 4 years. Up to now, Vietnam has 18,230 landlords renting accommodation on this channel, of which, 69% of apartments/bedrooms for rent on Airbnb in Vietnam are multi-listing hosts and the remaining 31% are only one-apartment homeowners. The report states that Airbnb helps increase profits for homeowners.
The accommodation service through the Airbnb channel has become a formidable competitor to other types of accommodation. Source: collected picture
Some solutions towards digital transformation promotion through Airbnb accommodation service
In terms of the host:
In spite of the outstanding advantages listed as the price when renting a room with the Airbnb service, which tends to be up to 30% cheaper than that of a hotel room, Airbnb is facing various legal problems with taxes, the quality of registered apartments is not obvious whereas the category of rooms is increasing without strict management. Therefore, the solution for homeowners is that they are forced to do the following commitments: registering information with Airbnb, ensuring a response rate of booking requests within 24 hours, accepting customer booking requests as quickly as possible and avoiding cancelling a customer’s reservation. In order to improve the reviews of visitors, the host should provide full facilities or replace some equipment in the room listed as air conditioner, television, Wifi and so on; keeping room hygiene; responding and resolving guest issues promptly via text message or direct call. In addition to security and safety assurance by checking and listing properties before renting, facilitating payment via online applications listed as Mastercard, Visa or E-wallets for guests with domestic accounts (Vnpay, Zalopay); background-check to ensure that the tenant is verified by Airbnb; clear rental regulation establishment, etc. are essential things to perform. It is worth noting that the host must have a sense of good service attitude, enthusiasm, ability to communicate directly with foreign guests, especially English. If possible, the landlord can design diverse types of rooms with different prices for customers to choose. Long-term campaigns listed as advertising with SEO tools, discounts when guests stay for a long time or the follow-up room rent and so on are possible options. Last but not last, the host must monitor guests’ arrival and departure schedule through notification application on their personal phones for timely-support provision.
In terms of Airbnb:
The company can cooperate with reputable banks and promote discount codes regarding bank payment to help spread Airbnb reputation in Vietnam. In addition, advertising campaigns through channels (listed as Facebook, Instagram, Tik Tok), promoting good-looking design rooms and organizing after-sales programs should be widely applied. Airbnb should actively give the fees for laundry, cleaning, car rental and more to customers to choose in advance and ask the host to set the exact prices. Furthermore, Airbnb must bind the account information of both the customer and the landlord, including authentic identification documents, contact information and a certified business license from a local authority. In addition to the photos of the accommodation, Airbnb should ask the host to provide additional photos of the area around the accommodation so as to ensure security and reliability. Furthermore, Airbnb must ensure that the host has periodically repaired the equipment in the house, especially locks, lights, burglar alarms and so on to keep customers’ property safe. Finally, Airbnb can provide customers with emergency phone numbers of the local police, local People’s committee or even that of Airbnb headquarters in the area for customers to contact urgently.
For state management agencies:
In order for E-commerce activities to fully develop to their potential, the state must first have a state management agency in charge of the shared-stay model to soon adjust and complete the legal framework and promptly supplement the legal documents; review business conditions in the direction of simplifying administrative procedures, specifically amending regulations on E-commerce legislation. In addition, the Government needs to accelerate the construction of electronic data and information infrastructure, especially building an open data system, investing in the development of the Internet network and upgrading network security to ensure the safety of the Internet with the purpose of ensuring the benefits for users besides the specific tax income regulations in order to collect taxes from Airbnb business individuals properly and sufficiently.
Accommodation services through the Airbnb channel have a lot of potential to develop and promote digital transformation in the Vietnamese market. Therefore, both Airbnb and the Vietnamese state need to have measures and policies so as to apply this accommodation sharing model effectively and sustainably towards protecting the rights and creating conditions for the domestic users.
Please refer to the full article of “Shared Accommodation” Model in the 4.0 Industry Era: Airbnb Channel Application here
Author group: Dr. Trương Hồng Ngọc – Department of International business – Marketing; MSc. Nguyễn Thị Thu Thủy – UEH Department of Tourism.
This article is in series of spreading researches and applied knowledge from UEH “Research Contribution For All – Nghiên Cứu Vì Cộng Đồng” message, UEH would like to invite dear readers to look forwards to Newsletter ECONOMY NO. # 38 “DIGITAL TRANSFORMATION IN VIETNAMESE TOURISM”
News, photos: Author group, UEH Department of Marketing – Communication.