SHARED ECONOMY – The future of travel – is Gibraltar ready?

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Much has been written and debated in recent years about the Gibraltar tourism product and how it needs to be transformed, but an aspect that has been largely ignored in this debate is the silent revolution that is already transforming the tourism industry worldwide – the shared economy.

The shared economy, or as some call it the “collaborative consumption economy”, is not new, but it has exploded in recent years thanks to consumers’ increased awareness of idle assets and technological innovations. Consumer-to-Consumer vacation rentals and ride share bulletin boards have been around for years, but efficient online payments and trust in e-commerce have made sharing into a viable alternative for the mainstream. Startups like Airbnb, Carpooling and Lyft have enjoyed tremendous growth. They now operate on such a scale that they are matching mainstream hotels and transportation companies in convenience, and usually beating them on price.

The growth of collaborative consumption is not just about cash-strapped travellers settling for a less luxurious option, however. In fact, it is growing in popularity for high-end consumers. Trust in strangers, and a desire to travel like a local rather than a tourist are also on the rise. Sharing and communing with locals is the best part of participating in collaborative consumption.

While the majority of us have heard about Airbnb, Uber, and ToursByLocals, there are a wide range of shared economy service providers nowadays, encompassing the entire range of the travel experience.

The shift from ownership to access is transforming almost every industry, and travel is one of the most affected. Having advised a number of local operators on the impact that the shared economy may have on their business and how they should be reacting, it is important to stress that traditional travel providers should take heed and understand the changes in the market to be able to compete effectively.

So how can the shared economy be used to enhance the Gibraltar tourism experience?

From CouchSurfing to Home-Swapping

On many occasions, travellers to Gibraltar do not stay the night in a hotel in Gibraltar because they simply cannot find an available hotel room, or that the available rooms are simply too expensive. Indeed, the choice of hotels in Gibraltar is very limited, and the laws of Supply & Demand dictate a relatively high price level. Encouraging peer-to-peer accommodation options (including home-swapping) would serve to increase the availability of holiday accommodation locally and will mean more visitors staying overnight, spending locally on restaurants or groceries and having more time to shop along Main Street or visit more of the local sites, thereby further benefiting the economy.

The sharing economy should not be viewed as a threat to the hotel industry. The meteoric rise of Airbnb, booking more than ten million nights since its inception in 2007, should not cause the hotel industry to worry about the vacation rental market. Both business models have co-existed for a significant amount of time without infringing on each other’s growth. Sleeping on someone’s couch will never compete with sleeping in a 5-star hotel room. However, hotels should aspire to implement some aspects of the personal touch provided by the peer-to-peer accommodation: the person who greets you at the door of her or his own home might not be a tourism professional, but he or she is definitely someone who knows the area well. As one travel blogger highlighted: “Do I remember the guy who checked me into my last hotel room? Nope. Do I remember my last Airbnb host? You bet I do.”

Ride-Sharing

While Uber and similar shared-ride services have faced much opposition in many cities around the world, in Gibraltar, such services could bring a much-needed solution. The local taxi service has been the subject of much criticism in the media and is certainly insufficient to handle the huge volume of visitors to Gibraltar. Allowing an Uber-like service to operate in Gibraltar has the potential to solve the shambolic state of the existing situation and should not be viewed as a threat to the existing taxi service but simply as a way to better utilise existing vehicle availability. For instance, it can be implemented that if the taxi service is not available for a ride within five minutes of a call, the request is then automatically redirected to a private driver. This way, the peer-to-peer service does not compete with the taxis but instead fills a gap in the market. It helps the locals earn some extra money, which in turn can translate to more tax receipts to the government.

Shared-riding can also be encouraged to bring people to and from Gibraltar. Services such as Blablacar and Carpooling allow travellers to pick up a ride to another city at a moment’s notice. Prices are dramatically cheaper than taxis and faster than buses or trains. Such services feature a mobile app that shows you rides departing nearby, which removes the need to travel to a bus station or hire a car. You can book through the app very quickly and never have to exchange money in person. Blablacar’s prices are capped to ensure that drivers do not make a profit. With very limited public transport options between Gibraltar and Malaga Airport, and throughout the Costa del Sol, encouraging these shared forms of travel can make Gibraltar more accessible to holidaymakers and can help locals get to Malaga Airport without having to use their car or take an expensive paid service.

As with peer-to-peer accommodation, there is a social element as well. Spending time with a stranger in a small car might sound like a special type of hell for some people, but you can at least choose the stranger you ride with. Riders and drivers choose one another according to their ratings, the type of car, their driving style, and social networking profiles. Finding rides from friends of friends is a key feature of ridesharing.

Come Dine with Me

The idea of entering a complete stranger’s home in a foreign country to eat a home-cooked meal might seem well, foreign, but a whole new sharing economy space based on this idea lets travellers set aside their travel guides and immerse into a foreign culture at the dinner table. Services such as Eat With Locals and VizEat do just that. Aside from a unique dining experience and extra earning potential, meal-sharing platforms also give locals the opportunity to meet and interact with a lot of people from all corners of the world, tell them about our culture and they can share their experiences. Home chefs and even professional chefs can also use the opportunity to flaunt and test their culinary skills.

In summary, the sharing economy is still in its early infancy and companies like Airbnb, Lyft, RelayRides and their peers are the hottest topic in the startup world right now. The legality of these startups has been in the grey from the start, as they push against the incumbent laws and regulations. Local businesses should seek advice on how to best adapt to the changing business model of the tourism industry. Gibraltar has the opportunity to reap the benefits from this innovative sharing-economy business model, due to the unique profile of the local market which often makes the traditional asset-ownership model not economically viable. If decision makers in the government would be willing to embrace the changes that the shared-economy brings to tourism rather than oppose them, Gibraltar could actually experience the transformation it has wished for in its tourism product… perhaps even at a much lower cost!