Graduation Date

5-2015

Document Type

Master's Thesis

Degree Name

Master of Business Administration

Department or Program

Barowsky School of Business

Department or Program Chair

Sam Beladona, Ph.D.

First Reader

Christopher Leeds, Ph.D.

Second Reader

Sue Stavn, M.S.I.S.

Abstract

This thesis analyzes the competition between hotels and Airbnb in San Francisco. Airbnb is an internet platform that allows hosts to rent shared space, private rooms or homes to tourists. This study identifies the affect Airbnb has on hotels, workers, renters, neighborhoods, and tax revenue.

Interviews and research was engaged with travel industry professionals. Hoteliers were found to be apathetic about the competition between hotels and Airbnb.

Airbnb can be a meaningful experience between hosts and tourists. Budget travelers might not travel if not for low Airbnb rates. Airbnb rooms supplement hotel inventory during extraordinary events.

This utopian view of Airbnb seems to overcome the dark sides; evidenced by rising apartment rental rates and declining inventory. Pressures are placed on working class neighborhoods driving out the local workforce for high rate tourists. To date, Airbnb has defeated efforts to be effectively regulated.

Unregulated conversions of residential to hotel use is a safety concern. San Francisco Ordinance 218-14 was passed to legalize and regulate Airbnb; however 218-14 is unenforceable. California Senator McGuire authored SB 593: The Thriving Communities and Sharing Economy Act to empower regulation of Airbnb. SB 593 has not been passed yet by the California Senate.

Until tax payments, legal, regulatory, safety codes, and compliance issues are addressed the majority of Airbnb will be operating illegally with an unfair competitive advantage over hotels?

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