The sharing economy is a socioeconomic system built around the sharing of privately owned resources. In the accommodation sector, this usually takes the form of excess capacity, such as a spare room or an entire home that isn’t being used to its fullest capacity. In recent years, the home-sharing economy has grown rapidly and now accounts for a significant portion of the overall vacation rental market.
In 2019, the global vacation rental market size was valued at US$87 billion and is predicted to expand at a compound annual growth rate (CAGR) of 3.4% between 2020 and 2027 (source: link). In terms of revenue, home sharing accounted for approximately 47% of the vacation rental market (source: link). Going forward, we anticipate this share to continue growing as new Web 3.0 solutions enter the market.
Millennials have been a major driving force behind the rapid growth of the home-sharing economy. A report published by Airbnb noted that millennials and younger generations will account for 75% of all consumers and travelers by 2025 (source: link). Furthermore, by this time, it is likely that cryptocurrencies will be a preferred form of payment and elements of tokenization will be common. This trend is already occurring on blockchain-based travel platforms today.
“Millennials are not only a major force in travel bookings, they are also adopting cryptocurrencies at a rapid pace. Currently, over 70% of all bookings on Travala.com are paid for with cryptocurrencies, with thousands of users subscribed to token-based loyalty programs.” - Dtravel Contributor, Travala.com.
As both the home-sharing and cryptocurrency economies continue to grow, the number of options hosts and guests have to discover, book, and engage with different payment methods remain limited and centralized.
Centralized, for-profit corporations have misaligned and opposed interests to their users, as evidenced in the extraction of high fees, removal of peer-to-peer communications and, more recently, the tendency to dispute refunds in order to retain earnings. Since the relationship between these centralized platforms and their users is becoming more transactional and commoditized, a growing lack of trust amongst participants and the platforms themselves has emerged.