The Airbnb Effect: The Impact of Increased Tourist Visitation to Small Businesses in Tasmania

Airbnb is an increasingly significant component of the tourism industry in Tasmania. Last year 180,000 visitors to Tasmania stayed in an Airbnb property and Airbnb has opened up the tourism accommodation market in suburban as well as remote and regional areas which has resulted in increased visitation to local shops, cafes, restaurants and bars Visitors choosing Airbnb are attracted to non-traditional accommodation options because they are seeking a more authentic experience; many consider themselves to be ‘travellers’ as opposed to tourists and this self-perception underscores their passion for more genuine, and therefore local, travel experiences. On average Airbnb guests spend 80 per cent more per trip, and stay two days longer, than non-Airbnb guests, and this has significant implications for retail and hospitality spending. In addition, Airbnb guests are more likely to visit and spend money in areas outside core tourist destinations and this provides opportunities for small businesses located on the city fringes, as well as in suburban, rural and coastal regions to benefit from increased visitation. Airbnb travellers want to discover more, and make a deeper connection with their destination. Increasingly this requires accessing alternative sources of information in addition to mainstream tourism marketing. Echoing the global trend, Airbnb visitors in Tasmania are increasingly seeking recommendations from their hosts about the best local places to eat, drink and shop. As a result, more local small businesses are being ‘discovered’ by Airbnb travellers through word of mouth (WOM) and e-word of mouth (eWOM) recommendations from Airbnb hosts. There is no research currently being conducted that examines how Airbnb guests utilise host recommendations to make decisions about which shops and eateries to visit during their stay.

WOM communication is a well-established construct in both tourism and marketing literature and it is widely regarded as credible and influential source of consumer information about goods and services. WOM theory proposes characteristics of the source (in this case the Airbnb host) that influence the WOM usage of the listener (in this case the Airbnb guest), also moderated by the independence of the source from the object of the recommendation (in this case the business). Given that WOM is a powerful form of information provision for travellers and an effective marketing tool for small businesses, this project brings together three important stakeholders – Airbnb hosts, guests and local small businesses – to examine how the WOM communication process operates in driving Airbnb visitation to local shops and eateries.

This project utilised a mixed method approach. Initially, semi-structured interviews were conducted in Hobart and Launceston with a small sample of hosts, guests and small business owners. Interviews were recorded and then analysed using Leximancer. The second phase of the project involved the development of a survey administered to a larger sample of hosts, guests and small business owners throughout Tasmania.

 

This paper will report on the first phase of the research project and provide a summary of the findings and theoretical analysis. It will also provide a discussion of the social and economic impact of increased visitation to local small businesses.