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EXPLORING THE IMPACT OF

SHARED ECONOMY IN TOURISM
Paulo Azenha

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 EXPLORING THE IMPACT OF SHARED ECONOMY IN TOURISM

Paulo Azenha a, Gabriela Beirão b and Alexandra Xaviera

a
Faculty of Engineering, University of Porto, Portugal, PORTUGAL
b
INESC TEC, Faculty of Engineering, University of Porto, PORTUGAL

ABSTRACT

This paper presents the results of a qualitative study exploring the

sustainability of new service model based on collaborative consumption in
a tourism setting. Thirty interviews were undertaken both with local
communities in Indonesia offering the services and with customers, to
understand the impact and type of services being offered. The results
show a change in the social paradigm allowing locals to obtain extra
income and fostering micro-entrepreneurship, thus promoting local
economic development. Furthermore, these new services offer customers
an experience not available in standard companies, allowing them to
interact more deeply with the local culture and people.

KEYWORDS

Shared economy, sustainability, micro-entrepreneurship, collaborative

consumption, tourism.

INTRODUCTION

In the current context of economic instability and complex environment,

the need for recovery and development of national economies led to the
emergence of entrepreneurs seeking opportunities, for generating wealth,
employment, sustainable new business models and social development.
This drove to a revival of the shared economy supported by new
technologies, enabling the sharing of products and services. This new
business service models based on collaborative consumption and
citizens’ participation allow a better distribution of income for local
economies and their stakeholders. This new disruptive economic
approach contrast from traditional business models, causing profound
changes in societies and in the way citizens interacts with these
organizations.
The small size required for this type of business drives a change of the
economic paradigm in today's society, where more and more the
acquisition process is drived by experiencing something new. The
underlying base of this economic model is collaborative consumption,
which is generally related to the activity of sharing goods and services
inside of peer-to-peer networks. This terminology is usually associated to
file sharing, and only recently, with the proliferation of technological
platforms, its implementation became possible. This new disruptive
economic approach contrast from traditional business models, causing
profound changes in societies and in the way citizens interacts with these
organizations. However, further research is needed on the impact of this
new business service models on the local economy and citizens (Smith
and Clark, 2010).
The sharing economy may become a way to promote more sustainable
behaviours. People feel motivated to engage in sustainable behaviours,
especially when they perceive that other consumers are also
collaborating (Weitzman, 1990)..
Tourism is an important contributor in the economic growth of a nation.
Factors such as environment, society and geography influence the
attractiveness of a country and have an important impact in economic
growth. Sharing economy is a fast way of creating balance between
consumer demands and service providence sales because it links the top
level organization like a five star hotel with a low level organization like
taxi service centre. In case of tourism, it will quickly meet the demands of
consumer and will foster the economic growth of a country (Koopman,
Mitchell et al., 2014)
This paper contributes with an empirical study of this new business
models of shared economy. A qualitative study was undertaken in a
tourism setting using a company as a case study. This particular study
intends to better understand the economic model’s sustainability,
considering the challenges of today’s global economy transformations.

RESEARCH METHOD

This study has the objective of studying an underdeveloped area, thus

qualitative methodologies were used to obtain a deeper understanding of
the phenomenon of interest (Corbin and Strauss, 2008). The objective
was to analyse the structure of collaborative consumption from users and
buyers point of view. The investigation was implemented in Bali and
Jakarta cities (central hub of tourism from Asia and pacific and Australia)
in Indonesia. The respondents were selected from buyers and sellers of a
company that operates in the collaborative consumption of the tourism
sector in Indonesia. This company provides a technological platform
where local citizens can offer services such as tours and culinary
experiences for customers around the world. The respondents consist of
15 customers and 15 sellers.
Several methods were used to collect the necessary data from March to
June 2014, such as: document reviews, observations, surveys, and semi-
structured interviews. The participants were observed during these
activities related with the choice, creation and planning of touristic
activities. Also, interviews were performed with the purpose of
understanding the level of local and social commitment, as well as the
indicators that promote this type of social and economical
transformations.
The research methodology was structured around the motivation level of
the consumers and sellers, the security and threats to the tourists,
satisfaction criteria for tourist, alteration in tourism culture, the monetary
benefits from tourism and the value proposition of both tourist and sellers
(see Figure 1). Potential threats and concerns were also asked. This
includes the social behaviour of the locals, customer satisfaction,
tourism’s culture alteration, environmental threats and hospitality
concerns.

Figure 1: Threats and Concerns of tourism market

Social
obstructions

Alteration in
Security threats tourism

Customer Tourism Enviornmental

Satsifaction Market Threats

RESULTS

The study enabled better understanding of the underling factors behind

tourists and service providers choice for engaging in this exchange of
service.
The results was structured around the factors that influence tourists and
service providers. Seven factors related to motivation, information,
security, satisfaction, changes in tourism culture, economic benefits and
value proposition where identified. Table 1 presents the results showing
the percentage of respondents that referred each aspect. Interestingly,
the results for both tourists and service providers where not that different.
All tourists motivation for engaging in these experiences were to socialize
and almost all showed their urge for seeking something new and
adventurous. As expected, service providers motivation for offering these
services was to gain extra income. But they also want to meet new
people, share experiences and become hosts.
Information is very important, customers acknowledge that it influenced
their buying process, and service providers understand reviews on the
website are critical for their business. Regarding security only a few
showed concerns about security problems in the service provision. From
the customers side, fear of what may happen during the experience, and
from the service providers fear of opening their homes.
The satisfaction of customers and service providers is very high and they
appreciate the friendly attitudes that characterize these interactions.
Noticeably, only 2 people were not happy with the tourist sellers, service
providers and recreational organization. Very important is that almost all
referred that the tourism culture is changing not only in Indonesia but in
the entire world and agreed that tourism is now the future of the economic
growth. Also, most respondents recognize the economic benefits derived
from this type of tourism, and the benefits for local economies.
Furthermore, service providers know that offering a value proposition
attractive to customers at a price they are willing to pay is important,
which was referred to almost all customers. For example, a service
provider said that "the price, the originality of the activities and social
relations that are augmented by these service is to some extent
concealed and is more like an activity with friends".
The results show a change in the social paradigm allowing locals to
access extra income and driving micro-entrepreneurship, thus promoting
local economic development. Furthermore, these new services offer
customers an experience not available in standard companies, allowing
them to interact more deeply with the local culture and people. The
degree of satisfaction of both parties (customers and service providers) is
high, reaching 100% in some segments of activity. The opinion is
unanimous when referring to the need for changing the current economic
models. Furthermore, the increase in awareness has become a catalyst
factor for the actors involved. Interestingly, the results revealed that,
although the initiatives in creating tourism content emerged in result of
initial curiosity, more than 50% of the cases turned into regular activities.
Table 1: Aspects influencing tourists and service providers

Tourists Service Provider’s

Motivation • 100% social aspects • 100% extra income
• 70% seeking new • 90% social aspects
experiences • 75% share experiences and
becoming hosts
Information • 75% reviews on • 70% reviews are important
website are the most to have more clients
important aspect before
buying
Security • 18% security, fear of • 18% security concerns about
what may happen their home
Satisfaction • 100% friendly attitude • 100% sociable and friendly
• 90% satisfaction customer interaction
• 90% satisfaction
Tourism • 90% this change would • 100% will be the future of
Changes be the future of tourism tourism
• 87% tourism is • 90% tourism is changing the
changing the way we way we travel and interact
travel and interact with with each other
each other
Economies • 90% is important to • 100% is beneficial to local
Benefits local economies. economies
Value • 90% value proposition • 100% value proposition is
proposition is important important to clients
• 75% price determines • 70% price is critical
buying decision.

CONCLUSION

The study results showed the most important aspects for tourists looking
for new local tourism services. Also, the aspects from the service provider
perspective were also uncovered. These factors are related to motivation,
information, security, satisfaction, changes in tourism culture, economic
benefits and value proposition. Tourists are becoming more aware of this
new services and the impact on local economies.
The results show a change in the social paradigm allowing local citizens
to obtain more income and enabling micro-entrepreneurship, which drives
local economic development. Furthermore, these new services allow
customers to engage in experiences not available in standard tourism
companies, enabling them to interact and know more deeply with the
local culture and people.
These services are offered using websites that serve as intermediaries
between customers and service providers, which help increase the
visibility of people as opposed to traditional businesses, thus promoting
informal entrepreneurship. However this informality assumes other values
such as responsibility for managing people and requires social skills.
The legal issues with the implementation of these economic models are
still, in some countries, an obstacle to its development, although these
economic models are in global expansion in most of the sectors. There is
a growing awareness with respect to the environment advantages of the
implementation of this model. They enable developing countries like
Indonesia to thrive upon the tourism market and to foster economic
growth.
Further research is needed to deepen the understanding of how new
services enabling economic development in underdeveloped countries
can be developed. Also, is important to understand the motivations
behind customers’ choices, and how value can be cocreated between
service providers and customers.

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