1. 0 Introduction 3 1Aim 3 2Objectives 4

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Comparative Analsysis Between Generation X And Generation Y, Purchasing Behaviour Towards Airbnb.

Principles of the Hospitality and Tourism Industries

Word Count:

Miji Lee


1.0 Introduction 3

1.1Aim 3

1.2Objectives 4

1.3Limitations 4

2.0 Airbnb 4 P’s Marketing Strategy 5

2.1 Product 5

2.2 Place 5

2.3 Price 6

2.4 Promotion 6

3.0 Understanding the Generations 7

3.1 Who is Generation X? 7

3.2 Who is Generation Y? 7

3.3 Comparative Analysis between the Generations 8

4.0 Applying the Generations to Airbnb 9

4.1 Generation X 9

4.2 Generation Y 10

5.0 Research Methods 12




5.2.1 Generation X responses 14

5.2.2 Generation Y responses 17

6.0 Recommendations 19

6.1 Offline Marketing 19

6.2 Virtual Videos 19

6.3 Loyalty rewards 19

6.4 Integration with other websites 19

7.0 Conclusion 21

8.0 References 22

8.0 Appendix 25

Appendix A: Online Survey 25

1.0 Introduction

In traditional markets, consumers bought products and gained ownership of items. In recent years, the sharing economy has begun to transform many aspects of life, thus the trend is changing. This new trend has allowed individuals, companies and communities to re-imagine how they live, grow, connect and operate sustainably. In order to respond to this new demand, new habits were created to satisfy the customer, concentrating on spending less and saving more (Tech Target, 2013).
What is the sharing economy?

The sharing economy is a trending and growing business concept that highlights the ability for individual to borrow or rent goods rather than buying them. The main criteria for the sharing economy are to allow consumers to monetize assets that are not being fully used. This is justified by the decrease of trust of the consumers in the corporate world as a result of the financial and economic crisis.

Furthermore, the required technology for hosting an online peer-to-peer market in recent years has become available at a more reasonable cost. Websites such as Airbnb have addressed the much more challenging problem of the sharing of goods, where unlike selling a good, retaining the post-transaction value of the good is essential for the owner (Toposophy, 2014).

These macro-economic factors have driven the consumer to change their consumption behaviour by learning ways to earn or save money. This new concept (otherwise known as consumer-to-consumer market) has allowed consumers to fulfil new roles that were normally conducted by companies (Harris, Gorenflo and Doctorow, 2012).

Most importantly, the sharing economy has allowed the hospitality and tourism sector to emerge as one of the leading sectors in this type of business. By allowing visitors and residents to share many things but mostly: apartments, houses, castles, villas… otherwise known as Airbnb.
    1. Aim

The main aim of this report is to understand Generation Y and Generation X purchasing behaviour towards Airbnb. Focusing on this company, we aim to study how the different generations apply to the sharing economy. As it’s assumed there is a gap between the different generations consumption. The report will demonstrate how Generation X is trying to integrate into this new trend and what recommendations to develop the relationship to a greater standard.
    1. Objectives

  • To understand the concept of Airbnb in relation to the 4 P’s

  • To understand through theoretical data Generation X and Y and analyse how they compare in terms of purchasing behaviour

  • To explore how the different generations apply towards the sharing economy in terms of using Airbnb

  • To compare through primary data whether there is a significant difference between the generations purchasing behaviour towards Airbnb

  • To provide recommendations on how to integrate both generations into using Airbnb
    1. Limitations

  1. Due to a limited amount of words, and a vast amount of data, sources of information had to be filtered as to what was most important to fulfil the project outline.

  2. Nonetheless, there was a limited amount of information on Generation X and Airbnb.

  3. Due to a lack of time, it was intended to collect 100 responses on the online survey, however only 81 useable responses were collected, which were mostly Generation Y respondents, thus it’s impossible to generalise for the whole of society.

  4. Lastly, as there was no interviewer with the respondent, there was not any probing or explanation of answers. Thus we are assuming respondents understood the survey questions.

2.0 Airbnb 4 P’s Marketing Strategy

2.1 Product

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The concept of Airbnb, is to connect hosts with travellers to enable transactions, thus the platform goes against traditional forms of hospitality. Millions of individuals can create an Airbnb account to freely post ads or to book unique types of accommodation in many destinations (Airbnb, 2015). Their website allows the host and traveller to communicate confidently and secure payments. Regarding their after sales service, the service allows a cancellation, reimbursement service and host guarantee (Airbnb, 2015).

2.2 Placemacintosh hd:users:clairepucheu:desktop:capture d’écran 2015-02-11 à 14.09.42.png

As previously mentioned, Airbnb is offered in many destinations (34,000 cities spanning over 190 countries) (Airbnb, 2015). There are some destinations that attract more customers due to their touristic market thus are in higher demand. Regarding its distribution channels, as the company is mainly based online the company is present on many social networking sites.

Facebook and Twitter are used to manage the communities and keep customers informed about the freshest news such as online contests or posted ads. Respectively, both networks have a comfortable number of subscribers (1 million for Facebook, and 280,000 for Twitter). Nevertheless, its most visual networks are on Pinterest and Instagram, whereby user’s photos are posted.

The company online networks aim to generate influences, visibility, and visual impact. Moreover, Airbnb recently launched its new offline platform through a new magazine called “Pineapple” (NY Times, 2014). The magazine focus on fashion and “pop culture”, showcases photographs taken by professionals, and gives a “storytelling” in a user-centred approach.

2.3 Price

The payment system is designed to transfer the traveller money and hosts. Firstly, through the website, travellers pay for the accommodation they have chosen. Then, the company gives the money to host 24 hours after the traveller’s arrival. When making the reservation, it is mandatory to pay through the Airbnb payment system so it helps to ensure that both parties are protected by the terms and conditions, cancellation policy and the travellers’ reimbursement policy.

Regarding the pricing, the hosts are free to decide their pricing strategy. Airbnb gives advise to help hosts fix their prices, for instance to include additional costs, and to compare them with equivalent properties within the area. Not only does it benefit the host in terms of price they wish to set, but also, the traveller to find a wide range of prices according to their budget (Airbnb, 2015).

2.4 Promotion

Airbnb marketing strategy is to promote its products throughout its online distribution channels. In fact, those distribution channels are part of the promotion strategy. Recently, Airbnb entered the audio-visual publicity market to accelerate its development. In May 2014, Airbnb released a new short movie with a brand new slogan, “Book a home, and get a unique view of the world”, this accelerated the companies promotional position within the market (3collaboractifs, 2014).

3.0 Understanding the Generations

3.1 Who is Generation X?

Consumer behaviour of each generation was influenced to a greater extent by the time they were born in. The term Generation X refers to people born from between mid-1960s to the late 1980s. These are people who were influenced by major global occasions such as the collapse of the Soviet Union, spread of the HIV/AIDS and economic uncertainty with corporate downsizing and massive layoffs (The Huffington Post, 2015). In addition, this generation witnessed the introduction and development of new technologies; therefore, they are equally favourable to traditional and digital marketing (Williams, 2015). As consumers, Generation X prefer to make informed decisions, appreciate the value for money and consult Internet.

3.2 Who is Generation Y?

Referred to as either Generation Y or the Millennial generation, their birth date cohorts are between the years of 1981 and 1999 (Bolton et. al, 2013). Surrounded by technology and the Internet, this consumer group have developed very differently to previous generations (Valentine and Powers, 2013). As previously mentioned, some of the main characteristics of Gen Y are their recurrent contact with technology (Bolton et. al, 2013). Also up until recently, this cohort had experienced extended periods of economic wealth (Bolton et. al, 2013).

Nevertheless, Gen Y consumers have benefited from the increased availability of customised products (Bolton et. al, 2013). Due to their size and buying power, Millennials are considered as attractive target market for many consumer industries (Taken Smith, 2012). Considered as the driving force of online shopping, researchers have discovered Millennials have a high tendency for being market experts (Gerzema and D’Antonio, 2011, as cited in Taken Smith, 2012).

3.3 Comparative Analysis between the Generations

4.0 Applying the Generations to Airbnb

4.1 Generation X

From analysing all the factors of Generation X purchasing behaviour, it would be assumed the concept of Airbnb would not be as popular as it is among Millenials. A recent report by Nielsen (2015), showed that only 17% of Generation X is willing to utilize/rent products or services from a share community whereas the figure for Millennials is almost twice as high. Their willingness to share also depends on the regional particularities; the highest index was shown in Latin America (22%) on the contrary Europe has only 17%.

Even though Generation X is getting involved in new trends and they are comfortable with Internet, social media and new technologies, their habits sometimes prevent them from full integration. Additionally, Generation X may begin to appreciate the concept of Airbnb when it comes to retirement. As they have more free time, they may find it more useful to complement their income by getting paid for sharing a few underused assets. Retirees have the potential to become an active part of Airbnb as a lender for several reasons, which vary from case to case.

As was mentioned before, Generation X is a frequent user of the Internet and is highly connected on the go. According to eMarketer, 88.8% of Xers were using Internet monthly, nearly 95% were using mobile phones and 60.3% were using smartphones (Emarketer, 2013). Being technologically up-to-date allows them to utilise Airbnb online services and as an application.

Further to this, Airbnb offers outstanding opportunity for retirees to experience enjoyable social interactions, which is important due to a change in one’s lifestyle, e.g. retirement. They receive a chance to meet people from different cultures, with different backgrounds and build new strong long-lasting relationships (Avenue, 2013).

To sum up all the above it is necessary to point out that Airbnb applies to Generation X, however in a slightly different way to Generation Y.

4.2 Generation Y

As mentioned earlier in the characteristics of generation X and Y, economic situation have changed over the decades so as the views of people. According to McAlpine (2014), it is an inevitable fact that Generation Y will not be as financially successful as their parents, Generation X. Young adults have accepted the fact that it is nearly impossible to dream for stable jobs regardless of their university degrees. It seems that this new economic reality has been adopted by new generation and has shaped a new aspects on life style and definition of success.

For Generation Y, “owning a home or a car is not a real priority or even a long term goal” (McApline, 2014). For example, Pew Research Center found that 85 people out of 1,000 under the age of 35 years old owned a house in 2001, whereas in 2011, only 55 people out of 1,000 of the same research age group had their own homes (as cited in McAlpine, 2014). Therefore, as those numbers indicate, instead of looking for satisfaction in buying and owning more goods as their parents did, generation Y found meaning and fulfilment in “having shared access to things and interacting with other people” (Denning, 2014). The sharing economy is serving as a new way to achieve their goals associated with their dreams (Mindswarms, 2013).

The European Commission (2013) argues that due to the recent economic depression, consumers have begun to question transparency of corporations and have lost faith in them. Consequently, this phenomenon has decreased the power of big companies and increased the power of peer to peer business in which include very little or no commercial interventions (European Commission, 2013). In fact, Denning (2014) believes that Millennials find richer meaning in the sharing economy than those anonymous transactions that prevents consumers to have personalized relationships. Airbnb’s business structure is based on a brokerage model, which includes brokers, buyers and sellers. In the case of Airbnb, the company acts as an intermediate between house owners and guests and allow them to have personal interactions through their website. Besides providing customer support, insurance and payment handling, Airbnb do not interfere with transaction between the owners and the guests, and they can exchange messages and build personal connection (Geron, 2013). Generation Y appreciates this peer economy business model that revolve around the needs and wants of consumers (European Commission, 2013).

As discussed earlier, Generation Y possesses a better understanding in technology than Generation X, and is more comfortable with interacting with strangers through the Internet and conducting business online (European Commission, 2013). According to Boston Consulting Group, 79% of Generation Y uses social media to research and review (as cited in Euromonitor International, 2014). Needless to say, this trait has contributed significantly to the growth and spread of sharing economy, website as such as Airbnb. At the same time, sharing economy has played a part in enhancing Millennials’ personal growth. The interview conducted by Mindswarms (2013) proved that generation Y feels sharing economy allows them to be more experimental, open, fearless, and spontaneous. The sharing economy provides Generation Y not only goods and services, but also experience that only peer to peer transaction can offer (Eisen, 2014).

When travelling Generation Y value interacting with the local community and experiencing the local life-style (Bagley, 2014). This is one of the biggest reasons why Airbnb has shown drastic increase in users and revenue since the first debut in 2008. The statistics shows that the company recorded global bookings of 20 million nights and generated 2 billion dollars in 2013 (Euromonitor International, 2013). According to Folger (2013), Airbnb is appreciated due to the unique and comfortable experience that standards hotels cannot provide. For Generation Y who tends to look for adventure and want something exclusive and extraordinary, Airbnb is an ideal option for accommodation.

5.0 Research Methods

This section of the project explains the methods most necessary given the objectives. The main method of data collection will be discussed, focusing on some of the reasons for choosing the particular method and its limitations.



Using one of the most popular methods to collect data, the online survey (using the website Survey Monkey) was distributed via Facebook and emails to friends, teaching personnel and family. Therefore the survey ensured a wide spectrum of ages was included in the responses. A copy of the survey template can be viewed in Appendix A.

The survey was sent to gather consumer opinion towards the usage of AirBnB, their reasons for using the service and the impact it will have in future. The structure of the survey was made up of 5 closed questions followed by 2 open questions, as this allowed respondents to answer in an unconstrained way (Altinay and Paraskevas, 2008). The use of closed questions meant easily quantifiable data, which simplified the analysis of answers (Altinay and Paraskevas, 2008).


This section of the report will discuss and analyse the findings from the online survey. The purpose of this chapter will focus on presenting the gathered data in a meaningful way to enable discussion and conclusion, which will be presented in the next chapter.

Figure – Total age of respondents

The total amount of response for the Generation Y (18 to 34) cohort was (71.61%) and for Generation X (35 to 55) and few respondents outside of the cohort it was (28.39%).

5.2.1 Generation X responses

(Total of 23 respondents)

Figure – Generation X (35 to 54 and above to 64) usage of sharing sites such as AirBnB
For the Generation X cohort, interestingly (8.7%) of respondents always used sharing websites such as AirBnB to book accommodation, however the majority (47.83%) never using such websites to book accommodation. The majority of respondents (43.48%) used directly the hotel website to make bookings.

Figure – Generation X (35 to 54 and above to 64) current reasons or future reasons for using AirBnB
A majority ruling of Generation X (56.52%) would use the service for the local experience and convenience (39.13%).
When considering the idea of renting their home on AirBnB, some felt that would be a “good experience to try”. However a majority felt they wouldn’t due to “lack of time to organise”, “privacy of the place” and thus would “prefer to loan my home to friends or people that I know”.

5.2.2 Generation Y responses

Figure 4– Generation Y (18 to 34) usage of sharing sites such as AirBnB
(Total of 58 respondents)
Interestingly, for the Generation Y cohort, only (6.90%) of respondents always used websites such as AirBnB to book accommodation, and the majority (46.55%) of respondents only occasionally used the website to book accommodation. Intriguingly, this cohort preferred using methods such as third party online travel booking sites (37.93% of respondents) and directly through the hotel website (29.31%).

Figure 5 – Generation Y (18 to 34) current reasons or future reasons for using AirBnB

However, a majority ruling by the respondents was their current reasons or future reasons for using AirBnb would be the price (81.03% of respondents), followed by convenience (32.76%).

When questioned whether Generation Y, would consider renting their home on AirBnB, a mixture of responses was discovered, a majority of people felt they would “never, because it’s a private space”, “invasion of privacy” and were “afraid of home being destroyed”. Interestingly, a lot of Generation Y felt that the “legal problems” still needed to be resolved such as who had the authority of the home. However, some felt that “it would be a good way to make extra money” and “good way to socialise and give local tips on life in the city”.

6.0 Recommendations

6.1 Offline Marketing

We have noticed that Airbnb does not run any offline marketing. Even though our research found that Generation X is comfortable using technology, in order to increase the publicity of Airbnb between Generation X and Generation Y, we believe that they should advertise themselves through traditional marketing strategies such as the development of advertisements on magazines, and newspapers.

6.2 Virtual Videos

Creating short videos from the host home can be strong advertisement tool, for instance using methods such as a GoPro camera. Hosts can advertise their home giving the guest a pre-arrival experience showing them the layout and amenities of their home and the local neighbourhood; this will make the decision making process easier for the customer.

6.3 Loyalty rewards

In order to create a customer base, Airbnb could issue a membership card to provide special discounts and additional privileges. The main purpose of the loyalty program would be the building of the relationship customer base. This will not only attract new customers for the company but also gain data on them and their preferences. In the long run this will reduce costs for the company in terms of advertising and promotion.

6.4 Integration with other websites

Linking Airbnb with other websites or companies can offer better options to both Generation X and Y. Airbnb can make an alliance with local cleaning service companies to provide additional services or cooperate with online ticket sale websites, local restaurant websites, etc. which gives various tips for a better trip.

Further to this, another option for the company would be to connect with other sharing platforms such as Uber or Mealsharing. By having the same concept of websites under one division, thus making it easier for the customer to arrange a travel itinerary.

7.0 Conclusion

To conclude, from our report it’s clear to see that the sharing economy is a worldwide trend that will continue to rapidly expand. This is due to societies social and economic situation whereby people’s attitude is slowly changing towards owning and sharing items.

From the theoretical and primary analysis, it’s clear that both generations need to be integrated towards using the service of Airbnb. However, within time and the recommendations provided, this change could take place, especially as both generations’ values are constantly changing and their desire to build relationships and experiences. As the development of technology evolves through the constant update of smart phone devices, this will act of as one of the key factors of increasing users of the sharing economy.

8.0 References

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4hoteliers.com,. (2015). Understanding the 'Generations' of travel - Part 4: The Generation X. - Saturday, 24th May 2014 at 4Hoteliers. Retrieved 16 February 2015, Retrieved from http://www.4hoteliers.com/features/article/8341

Airbnb,. (2015). Vacation Rentals, Homes, Apartments & Rooms for Rent. Retrieved 16 February 2015, Retrieved from https://www.airbnb.com

Altinay, L., & Paraskevas, A. (2008). Planning research in hospitality and tourism. Oxford: Butterworth-Heinemann.
Avenue, N. (2013). How Retirees Can Earn Money From The 'Sharing Economy'.Forbes. Retrieved 17 February 2015, from http://www.forbes.com/sites/nextavenue/2013/10/07/how-retirees-can-earn-money-from-the-sharing-economy/

B. Valentine, D., & L. Powers, T. (2013). Generation Y values and lifestyle segments. Journal Of Consumer Marketing, 30(7), 597-606.

Bagley, E. (2014). The changing face of travel: the impact of the sharing economy on the hotel industry. Real Estate Finance Journal, (3). 40.
Bolton, R., Parasuraman, A., Hoefnagels, A., Migchels, N., Kabadayi, S., & Gruber, T. et al. (2013). Understanding Generation Y and their use of social media: a review and research agenda. Journal Of Service Management, 24(3), 245-267.
Denning, S. (2014). An economy of access is opening for business: five strategies for success. Strategy & Leadership, 42(4), 14-21. doi:10.1108/SL-05-2014-0037
Dykstra, J. (2013). Why Millennials Don't Want To Buy Stuff. Fast Company. Retrieved 14 February 2015, from http://www.fastcompany.com/1842581/why-millennials-dont-want-buy-stuff
EISEN, D. (2014). The sharing economy: Why it's such a big hit. Hotel Management (21582122), 4.

Emarketer.com,. (2013). How Digital Behavior Differs Among Millennials, Gen Xers and Boomers - eMarketer. Retrieved 17 February 2015, from http://www.emarketer.com/Article/How-Digital-Behavior-Differs-Among-Millennials-Gen-Xers-Boomers/1009748

Euromonitor International. (2014). Global hotels: reaching new heights. Retrieved from Euromonitor Internatinal database.
Euromonitor International. (2014). Travel and the Sharing Economy. Retrieved from Euromonitor Passport database. 

European Commission. (2013). The Sharing Economy: Accessibility Based Business Models for Peer-to-Peer Markets. Business Innovation Observatory.

Folger, J. (2015). The Pros And Cons Of Using Airbnb. Investopedia. Retrieved 14 February 2015, from http://www.investopedia.com/articles/personal-finance/032814/pros-and-cons-using-airbnb.asp?performancelayout=true
Harris, M., Gorenflo, N., & Doctorow, C. (2012). Share or die. New York: New Society Publishers.
Lamb, R. (2015). Retrieved 16 February 2015, Retrieved from http://www.luxurydaily.com/brand-loyalty-highest-in-gen-x-consumers-emarketer/

McAlpine, T. (2014). The Sharing Economy. Credit Union Management, 37(12), 40-41.

Mhatre, K., & Conger, J. (2011). Bridging the gap between Gen X and Gen Y. J Ldrship Studies, 5(3), 72-76.
Millennial Marketing,. (2008). Gen Y: The End of the Home Ownership Dream?. Retrieved 14 February 2015, from http://www.millennialmarketing.com/2008/11/gen-y-the-end-of-the-home-ownership-dream/

Miller, R., & Washington, K. (2013). Consumer behavior 2013 (pp. 259-262). Loganville, GA: Richard K. Miller & Associates.

MindSwarms. (2013). Millennials and the Sharing Economy. Retrieved from http://blog.mindswarms.com/the-sharing-economy-enabling-american-dream-for-millennials/

Nielsen.com,. (2015). Global Consumers Embrace the Share Economy. Retrieved 16 February 2015, from http://www.nielsen.com/lb/en/press-room/2014/global-consumers-embrace-the-share-economy.html

NY Times (2014). Airbnb Introducing Print Magazine, Pineapple. NY Times. Retrieved 18 February 2015, from http://www.nytimes.com/2014/11/17/business/media/airbnb-introducing-print-magazine-pineapple.html?_r=0
Reisewitz, T., & Iyer, R. (2009). Differences In Generation X And Generation Y: Implications For The Organization And Marketers. The Marketing Management Journal, 19(2).

Research,. (2011). Purchasing Habits of Generations X and Y Differ Widely. Retrieved 16 February 2015, from http://www.unh.edu/research/blog/2011/11/purchasing-habits-generations-x-and-y-differ-widely

Syrett, M., & Lamminman, J. (2004). Advertising and millennials. Young Consumers, 5(4), 62-73

Taken Smith, K. (2012). Longitudinal study of digital marketing strategies targeting Millennials. Journal Of Consumer Marketing, 29(2), 86-92.

Tech Target,. (2013). sharing economy. Retrieved 15 February 2015, from http://searchcio.techtarget.com/definition/sharing-economy

The Huffington Post,. (2015). Work/Life Balance for the Generations. Retrieved 16 February 2015, from http://www.huffingtonpost.com/cathy-leibow/worklife-balance-for-the-_1_b_5992766.html

Toposophy,. (2014). SHARING ECONOMY AND TOURISM. Retrieved 15 February 2015, from http://www.toposophy.com/blogs/blog/?bid=38

Unh.edu,. (2011). Campus Journal: During Critical Christmas Shopping Season, Consumer Habits of Generations X and Y Present Tricky Mix for Marketers. Retrieved 16 February 2015, from http://unh.edu/news/campusjournal/2011/Nov/23season.cfm

Williams, E. (2015). Generation X Consumer BehaviorBusiness & Entrepreneurship - azcentral.com. Retrieved 16 February 2015, from http://yourbusiness.azcentral.com/generation-x-consumer-behavior-9585.html
World future society (2014). Futurist interviews: The future of sharing,

Retrieved from http://www.wfs.org/futurist-interviews/future-sharing

8.0 Appendix

Appendix A: Online Survey

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