Rise of the Sharing Economy and the Future of Travel and Tourism Industry

The sharing economy is growing rapidly as platforms permit users to gain access to various assets. An estimated $23 billion in venture capital funding has poured into the sector since 2010. The total size of the sharing economy, however, is hard to estimate as most of the platforms are privately provided. Global travel industry is unmistakably the sector that naturally lends itself to the sharing economy with gross revenue that reached $1.6 trillion in 2017, placing it among the largest and fastest growing sectors in the world. With both direct and indirect economic contributions factored in, travel and tourism industry accounts for 10.2% of global GDP. Along with the rise of the sharing economy, the role of the OTA’s and booking platforms has also seen growth in usage, and is now poised to become indispensable tools in travel planning and booking. As the industry is poised to become a new norm in the global economy, we review the recent trends, and make a projection on the future of the industry and the increasing weight of these online travel assistance platforms and their business models in the sharing economy. As they represent the important future trend of the sharing economy, preliminary assessment is also made about the market potentials for Airbnb and Uber. Further research ideas are also presented after the final thoughts, which involve the testing of the correlation between the sharing economy and the travel and tourism industry, especially in terms of the causality between the revenues in the two industries.