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Introduction
The tourism lodging sector has been dramatically impacted by the rise of sharing economy platforms like Airbnb that have rapidly attracted significant market share (Richard and Cleveland, 2016). Founded in 2008, Airbnb promotes itself as a complementary lodging segment that expands the tourism lodging market without directly competing with traditional hotels for the same guests (Gurran and Phibbs, 2017). However, several studies have highlighted the current and potential future negative impacts of Airbnb on hotel revenues (Benítez-Aurioles, 2019; Dogru et al., 2019; Guttentag and Smith, 2017; Zervas et al., 2017). In particular, smaller and independent hotels tend to perceive a greater threat from competitors like Airbnb operating in the informal economy (Williams and Horodnic, 2017). Moreover, less expensive hotels are especially vulnerable to Airbnb because they generally cater to leisure (vs business) travelers (Li and Srinivasan, 2019), just like Airbnb does, plus Airbnb hosts have much lower operating costs and therefore can offer lodging at very competitive rates that appeal to budget travelers (Guttentag, 2015; Richard and Cleveland, 2016; Zervas et al., 2017; Lu and Tabari, 2019). Despite the fairly direct competition that Airbnb seemingly poses for budget and midrange hotels, little is known about how budget and midrange hotel managers perceive Airbnb or how they have responded to the emergence of Airbnb with the development of appropriate competitive strategies.
Accordingly, the current study involved interviewing 19 budget and midrange hotel managers in Istanbul, Turkey, about how they viewed Airbnb and how they have responded to Airbnb’s rise. Istanbul is a maturing destination that hosts more than ten million international tourists each year. The city has roughly 169,600 beds for tourism lodging, and it is estimated that Airbnb represents over 16 per cent of Istanbul’s room supply (AirDNA, 2019; Istanbul Provincial Directorate of Culture and Tourism, 2018a). In other words, Airbnb now has a sizeable enough footprint in the city to have meaningful impacts on the traditional lodging industry. Consequently, better understanding reactions to Airbnb’s expansion by those who are arguably most threatened by it – budget and midrange hotel managers – will advance critical knowledge regarding traditional lodging businesses’ competitive strategies in response to the sharing economy.
This study responds to calls by several scholars (Guttentag, 2015; Prayag and Ozanne,...