Trends and Opportunities
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, with the home accommodation type accounting for approximately 47% of the market [source].
In 2019, the global vacation rental revenue was estimated at US$87 billion and the revenue from online bookings, which accounted for only 28.8% of the total (offline + online) revenue, was predicted to expand at a compound annual growth rate (CAGR) of 4.3% between 2020 and 2027 [source].
The trends of remote work and digital nomadism, which have been accelerated by the COVID pandemic, could lead to an even faster growth for the home sharing sector. In the USA alone, the number of digital nomads more than doubled, from 4.8 million in 2018 to 10.9 million in 2020 and there are predictions of a billion digital nomads globally by 2035 [source].
Another important trend to factor in is the rise of Millennials and younger generations, who have been a major driving force behind the rapid growth of the home sharing economy, and who are forecasted to account for 75% of all consumers and travellers by 2025 [source]. Younger generations have a greater tendency to prefer to book online and may eventually flip the offline/online booking revenue distribution.
Furthermore, by the time that Millennials and younger generations become the dominant demographic group for bookings, 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. For example at Travala.com, 70% of all bookings are paid for with cryptocurrencies and thousands of users are subscribed to token-based loyalty programs.
Generally, cryptocurrency adoption has risen substantially in recent years and 2021 has seen notable companies adding cryptocurrencies to their balance sheets and even cities and countries accepting cryptocurrencies as legal tender or launching their own digital currencies. Nevertheless, despite the growth in cryptocurrency adoption mostly as a form of store of value and of the immense wealth stored in cryptocurrencies, the possibilities to spend cryptocurrencies and use them as means of exchange remain limited. This represents an opportunity for businesses that enable cryptocurrency payments for goods and services.
Cryptocurrencies are part of a wider technological trend known as Web3, which aims to deliver the internet's original promise of decentralization and disrupt the centralized business models of the Web 2.0 era that have come to extract value at the expense of consumers and small businesses. The business models of the Web3 era, in contrast, are often organized around decentralized autonomous organizations (DAOs) that seek to engage and provide value to all stakeholders. DAOs can be seen as the synthesis of the dialectic between opposing approaches to business structures and opposing ideologies witnessed during much of the 20th century. And the growing acceptance of the emerging DAO concept is evidenced by the fact that some states and countries (e.g., Wyoming, Australia) are already proposing to formally recognize DAOs as a distinct form of business structure [source1, source2, source3].
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