Influence of Emerging Peer To Peer Accommodation on Budget Hotels Competitiveness in Nairobi City County, Kenya

Abstract

There has been a rivalry between Airbnb and the hotel industry across the world, which has mostly been on media fronts. The competitive front in the hotel industry has changed after the emergence of P2P accommodation rentals and they have been criticized for providing unfair competition to the conventional businesses, reducing job security, avoid taxes and pose a threat to safety, health and disability compliance standards. The study examined the influence of emerging peer to peer accommodation on budget hotel competitiveness in Nairobi City County in Kenya. The specific objectives that guided the study were to identify the customer profile of P2P accommodation and Budget Hotel customers, establish the extent to which customer needs for P2P accommodation and Budget Hotels influence choice of accommodation in Nairobi County, determine the extent to which customer motivation for P2P accommodation and Budget hotels influence choice of accommodation hotels in Nairobi County, estimate the extent to which customer segmentation for P2P accommodation and Budget hotels influence choice of accommodation hotels in Nairobi County and to compare the choice of accommodation factors in Budget hotels and P2P accommodation in Nairobi county. The study was based on Michael Porter’s five forces framework for analyzing the industry’s competitive environment and Clayton Christensen’s theory of disruptive innovation. The research design that was adopted by this study was the cross-sectional survey design. The targeted population of the study consisted of all the users of Airbnb, all customers of budget hotels, the owners of Airbnb listed properties and the managers of budget hotels in Nairobi County. The data was analyzed using measures of central tendencies, correlation and content analysis and the chi-square test was applied on tests for significance. The study concluded that the majority of the customers in budget hotels were married and the majorities in Airbnb were not married since the married. Also, the study found that a minority of the customers in budget hotels was single and the majorities in Airbnb were single. Likewise, the study concluded there existed an association between customer needs and the choice of accommodation in both budget hotels and Airbnb. The study also concluded that there existed an association between customer motivations and choice of accommodation in both the budget hotels and Airbnb. Moreover, the study concluded there was an association between customer segmentation and choice of accommodation. The study recommended that Regulators of Hospitality and Tourism in Kenya ought to create a model to classify and evaluate the properties offered by P2P accommodation platforms, similar to star rating categories for hotels. The study also recommended that P2P accommodation needs to have a proper taxation scheme based on data obtained from Airbnb to make the industry healthy and promote open entrepreneurship. Further, the study recommended that Local communities should be involved in hotel activities to create authentic and unique experiences for guests.