THE COLLABORATIVE ECONOMY AND SCOTTISH TOURISM A report commissioned by Scottish Enterprise, in partnership with the Scottish Government and the Scottish Tourism Alliance 1 Copyright © Scottish Enterprise 2018 Cover photo: Copyright © 674505619 | Shutterstock.com contents This document has been prepared for Scottish Enterprise, however it reflects the views only of its authors, and Scottish Enterprise cannot be held responsible for any use which may be made of the information contained therein. CITATION: SCOTTISH ENTERPRISE (2018), THE COLLABORATIVE ECONOMY AND SCOTTISH TOURISM Scottish Enterprise publications are protected by copyright. Therefore, and unless otherwise specified, no part of a Scottish Enterprise publication may be reproduced, stored in a retrieval system or utilized in any form or by any means, electronic or mechanical, including photocopying, microfilm, scanning, without prior permission in writing. PUBLISHED BY: Published by Scottish Enterprise, January 2018. All rights reserved. CONTACT: Atrium Court, 50 Waterloo Street, Glasgow, G2 6HQ [email protected] 0300 013 3385 (calls charged at local rates) 0141 247 1385 from mobile phones or if outside Scotland 1. Background and introduction 4 Minicom 0800 023 2071 - if you are deaf or hard of hearing (BT helpline 0800 731 1888) 2. The collaborative economy and tourism: growth factors and global trends www.scottish-enterprise.com 8 For further information about this study, please contact: 3. Who’s on board? Profiling consumers in the collaborative economy 14 Aileen Lamb: [email protected] 4. What’s new in the collaborative economy 23 SCOTTISH ENTERPRISE WOULD LIKE TO SINCERELY THANK: 5. Matching the collaborative economy trends analysis with Scotland’s visitor 42 The Scottish Government economy growth prospects The Scottish Tourism Alliance All individuals and organisations who contributed to providing insights to this report via the online 6. Policy update: tourism and the collaborative economy, sector-by-sector 50 survey and personal interviews 7. Case studies from around the globe 62 THIS REPORT IS PUBLISHED IN COLLABORATION WITH: TOPOSOPHY is a full-service, integrated destination marketing and management agency. With offices in 8. The collaborative economy in Scotland, pending challenges and opportunities 70 Athens and London, and experts across Europe, TOPOSOPHY’s offers a range of services in research, for growth strategy and partnership-building connected with the collaborative economy and tourism. 9. Learning points and key recommendations 78 Contact: [email protected] 2 3 This report has been designed to examine the current state of the collaborative economy in Scotland’s tourism sector, and evaluate Chapter 1 how it may develop in the future. It comes at an opportune time not just for Scotland’s tourism sector, but for Scotland’s economy as a BACKGROUND whole. At the time of writing, the Scottish government is exploring how to further its policy development on the collaborative economy by & INTRODUCTION taking advantage of the opportunities and overcoming any regulatory, economic and social challenges it may pose.1 Few sectors have seen such rapid development in for many decades. Many businesses which have the collaborative economy as the tourism sector. found themselves in this position have started Some of the world’s best-known online platforms their own peer-to-peer network, put their inventory connect individuals with each other, individuals with on an existing collaborative economy platform or businesses and businesses with other businesses changed their own business model entirely. For with the aim of providing accommodation, transport this reason, many have questioned whether the services and a range of leisure-based activities. In collaborative economy is essentially becoming this sense, collaborative economy platforms have the ‘new economy’ for this age. Many have also allowed individual hosts, drivers, tour guides and questioned the legitimacy of some collaborative home-cooks to compete in the same marketplace networks, and their capacity to seemingly bypass as multinational corporations that have existed established rules and regulations that ensure a safe for many decades. The collaborative economy and pleasant visitor experience. However one thing movement has accelerated the digitalisation of is clear to us: that it is a phenomenon that is here to the travel and tourism industry. Furthermore, the stay. It is also clear that for increasing numbers of various platforms and business models which travellers, including P2P accommodation, meals, have emerged (P2P, B2B, B2C, C2B2) often bypass tours and other experiences during their trip is established businesses which have operated becoming a way of life. 4 As a result of this movement, the travel and The term ‘P2P economy’ is commonly used as an alternative to the ‘collaborative economy’, however this tourism marketplace (and many others besides) term only partly describes the relationship between ‘providers’ and ‘users’ (or ‘haves’ and ‘have-nots’) in this have witnessed considerable disruption from economic system. In reality, the collaborative economy has already seen various models of collaboration collaborative economy activities. Its expansion develop, according to the five traits outlined above. NESTA outlines the following delivery models as a also appears to be causing other side-effects (both means of describing who takes part in specific activities and how individuals and organisations participate:4 positive and negative) on the visitor experience, life • Business–to–Consumer (B2C): The interaction between consumers and companies who own or in city neighbourhoods and a whole range of other directly manage their inventory. areas. For this reason, the subject merits discussion • Business–to–Business (B2B): The interaction between a business and other companies who own of how the Scottish tourism sector and the Scottish or directly manage their inventory. Government can work together to in order to seize • Peer–to–Peer (P2P): The interaction between two or more people to trade or exchange a good or the opportunities that the collaborative economy service facilitated and supported by a company, organisation or platform that is not directly involved could bring, while mitigating any negative effects in the transaction. by taking a smart approach to regulation. • Consumer–to–Business (C2B): The interaction between consumers and a company where the company benefits from and pays for the knowledge or assets of the consumer. It is also notable that some platforms may feature more than one model of ‘collaboration’ at the same time. This report is the result of cooperation between Scottish Enterprise, the Scottish Tourism Alliance and the For example, Airbnb enables P2P transactions (individual home owners renting their rooms or property to Scottish Government, and was prepared by TOPOSOPHY Ltd. In addition to conducting a wide-ranging each other), as well as B2C transactions (serviced apartment companies renting apartments to individuals. review of contemporary literature on the collaborative economy, the researchers have taken evidence and opinion from a variety of Scottish tourism sector stakeholders through an online survey, a series of in-person interviews, and an industry event, the STA Autumn Conference on 3rd October 2017. THE OBJECTIVES AND SCOPE OF THIS REPORT This report has the following objectives: We would like to express our sincere thanks to all who contributed their time and insights to this study. Make an analysis of current trends within tourism and the collaborative economy, focussing on five sub-sectors: • Accommodation DEFINING THE COLLABORATIVE ECONOMY • P2P transportation (in particular, long-distance ride sharing) The Scottish Government has defined the collaborative economy as ‘connecting individuals or communities • Food and meals via online platforms enabling the sharing or provision of goods and services, assets and resources without • Tours and activities the need for ownership’. • On-demand domestic services Build a picture of the influence the collaborative economy can have on Scotland’s visitor economy and As collaborative economy platforms evolve and expand into new areas of modern life, the terminology the opportunities and challenges it presents used to describe it is evolving too. The following terms have also been associated with this phenomenon: Review policy development in the collaborative economy around the world (supported by case studies) ‘sharing economy’, ‘gig economy’, ‘P2P economy’, ‘on-demand economy’, ‘network economy’, and Draw up a series of scenarios to illustrate how the collaborative economy may evolve in Scottish tourism ‘collaborative consumption. The Scottish Government has opted to use the term ‘collaborative economy’ according to different conditions as one which encompasses the nature of users, providers and transactions which take place. According to Present recommendations on the future development of the collaborative economy in Scottish tourism NESTA, a major UK innovation charity, there are five defining traits to the collaborative economy:3 Enabled by internet technologies The insights presented in this report are drawn from desk research, interviews with industry representatives and a wide-reaching online survey. The authors have aimed consistently to seek input and draw lessons Connecting distributed networks of people and/or assets from across Scotland, as well as a broad cross section of its tourism