Adoption of the Sharing Economy in the Tourism and Hospitality Industry in Developing Countries
Kiril Kjiroski (Faculty of Computer Science and Engineering, University “Ss. Cyril and Methodius” in Skopje, Macedonia), Smilka Janeska Sarkanjac (Faculty of Computer Science and Engineering, University “Ss. Cyril and Methodius” in Skopje, Macedonia), Sasho Josimovski (Faculty of Economics, University “Ss. Cyril and Methodius” in Skopje, Macedonia), Ljubomir Drakulevski (Faculty of Economics, University “Ss. Cyril and Methodius” in Skopje, Macedonia), and Branislav Sarkanjac (Faculty of Philosophy, University “Ss. Cyril and Methodius” in Skopje, Macedonia)
Copyright: © 2023
|Pages: 23
DOI: 10.4018/978-1-6684-4645-4.ch026
OnDemand:
(Individual Chapters)
Available
Current Special Offers
No Current Special Offers
Abstract
The tourism and hospitality industry has been affected by sharing economy platforms and eco-systems, which constitute disruptive innovations (i.e., innovations that create new markets and value networks while disrupting existing ones and displacing industry incumbents). As the third-largest socioeconomic activity within the European Union (EU), tourism can be considered an engine for economic development, accounting for about 8% between 2007 and 2016, while it has been close to 10% worldwide. This chapter examines the potential of the sharing economy in the tourism and hospitality sectors to disrupt the incumbent tourist regions and proposes sharing economy platforms for the introduction of new destinations in developing countries such as the Republic of Macedonia. It is crucial to examine the issue of the sharing economy from a governance perspective. The authors contend that sharing economy should be a part of a comprehensive national tourism policy based on contemporary governance principles and on experiences of other countries.
TopIntroduction
The sharing economy concept involves direct exchange of goods and services over the internet using online marketplaces. Also known as “collaborative consumption”, “on-demand economy”, “gig economy”, “access economy”, or “peer-to-peer (P2P) economy”, it is a hybrid market model of P2P exchange that has experienced rapid growth in the last few years.
Currently, the sharing economy is present in nearly every aspect of our daily lives, and it continues to create new niches traditionally occupied by businesses, not individuals (Hawksworth et al., 2014). Hawksworth also makes predictions of future growth in the sharing economy, which should increase by multiple times more than traditional economies in similar economic fields.
The sharing economy began to grow exponentially following the world’s greatest economic and financial crisis in 2008. This is not an accident. During his re-election campaign in 2004, US President Bush proclaimed an ‘ownership society’: “The greater the ownership in America, the greater the vitality of the nation.” However, the ownership society, pushed by major banks and their subprime mortgages as well as credit default swaps, collapsed in 2008. ‘Ownership hadn’t made the U.S. vital; it had just about ruined the country’ (Walsh 2011). The sharing economy has been historically rooted in bartering from ancient times and in more recent forms of organizations and activities such as cooperatives, mutual societies, associations, foundations, and tontines. Working class, poor, and minority communities have perpetuated these practices since very early times. The sharing economy concept was preceded by companies such as eBay (1995), Wikipedia (2001), PayPal (1998), Facebook (2004), YouTube (2005), Couchsurfing and Freecycle (both 2003), and so forth.
The sharing economy of the 21st century does not innovate the types of services and goods that are exchanged, but rather the way and the scope of doing the exchange. The innovation of the P2P economy lies in its process of connecting consumers and providers-and in the social benefits that the transactions bring. Shared resources were initially intended to be shared between individuals, but later evolved into consumer-to-consumer and supplier-to-consumer collaborations. Common threads of the sharing economy are disintermediation, the sharing of excess capacity, and increased productivity (Schor 2016).
Key Terms in this Chapter
Republic of Macedonia: Landlocked country in the Balkans region, north of Greece, south of Serbia, East of Bulgaria and West of Albania, with area of approximately 25.700 square kilometers, defined by the central valley of river Vardar, with mostly rugged terrain. It has three large lakes – Lake Ohrid and Lake Prespa in the south-west and Lake Dojran in the south-east.
Developing Country: This refers to low- and middle-income generating countries (LMIC), that are relatively less developed, or in some cases underdeveloped countries with a less developed industrial base and a low Human Development Index (HDI) relative to developed countries.
Sharing Economy: Model of economy, where goods are provided and purchased by individuals rather than companies, most often involving some Internet application or social network.
On Demand: Goods or services that are available when customers need them.
Hospitality: The hospitality industry is a broad category of fields within the service industry that includes lodging, food and drink service, event planning, theme parks, travel, and tourism. It includes hotels, tourism agencies, restaurants, and bars.
Disruptive Innovation: Product that displaces (disrupts) established order in certain eco-system. It doesn’t necessarily implies emerging of a new product, but it involves great increase in product adoption by wider public.
Traveler: A person which goes to a different place with the purpose of experiencing authentic people, food, etc. Travelers tend to blend in with their hosts and adopt their hosts’ way of living while visiting.
Tourist: A person which goes to a different place with the purpose of enjoying and experiencing most famous events and locations offered by certain place or country.
Tourism: Traveling to and staying in places outside their usual environment for leisure or business. Tourism industry consists of businesses that sell products or services to these travelers, also known as “tourists”.
Social Platform: A web-based technology that enables the development, deployment and management of social media solutions and services. It provides the ability to create social media websites and services with complete social media network functionality.
Peer-to-Peer: Term mostly used in computer networks, to describe connections between independent and equal computers. Here it refers to a direct exchange of goods, services and currency, enabled by Internet, Web applications and social networks.