Airbnb vs. Premier Inn: the rise of “collaborative disruption”
Peer-to-peer consumption is on the rise. Many companies are now leveraging the phenomenon of “decreased barriers to interaction” brought about by internet and social networks to help their users rent each other’s houses, cars, parking space, cooking skills and much more. Airbnb allows users to rent out their idle living space (couch, room or their entire house) to generate extra revenue. By providing people seeking accommodation with an alternative to hotels, Airbnb’s platform also directly competes for a chunk of the hotel hospitality business. In this essay, we will argue that Airbnb will continue being a successful business, possibly at the expense of incumbents focused on price differentiation, such as Premier Inn1. In order to support this argument, we will start by analyzing Premier Inn and it’s competitive environment using Porter’s2 article as a main point of reference. We will then focus on Airbnb, and why the company will continue being successful in the next years. First we will see how the company has advantageously positioned itself to ride current economic and technology trends, setting up its future success. We will also look at Airbnb’s disruptive innovations on both the supply (opportunistic, non-professional hosts) and demand side (price conscious over-served guests), and how these were stepping to access to higher customer segments. Finally we will argue that Airbnb has found a distinctive set of activities that has put the company in a place of it’s own, although competition is rapidly growing. * * *

Let us start by looking at one of the UK biggest budget hotel chains: Premier Inn. Premier Inn is one of four hotel chains that hold 80% of the budget hotel market, making it a concentrated and therefore high-barriers to entry market. What’s more, as any hotel it is a very