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What is the Sharing Economy?

Updated 2026-05-28

The sharing economy, also known as collaborative consumption or the peer-to-peer economy, is an economic system built around sharing, renting, or exchanging underutilized assets and services. These transactions are typically facilitated by a community-based online platform.

For the travel sector, this model allows individuals to rent out their homes, apartments, or spare rooms to travelers, creating a marketplace that competes with traditional hotels.

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How it works

In the context of vacation rentals, the sharing economy connects property owners (hosts) with travelers (guests) through a digital marketplace or platform, such as Airbnb or Vrbo. Owners list their available space, setting their own prices, availability, and house rules.

Guests can then search for and book these properties for short-term stays. The platform facilitates the entire process, including discovery, communication, payment processing, and post-stay reviews, taking a commission or service fee from the host, guest, or both.

Why it matters

The sharing economy has fundamentally disrupted the traditional hospitality industry by introducing a new supply of accommodation, often at a lower price point and in more diverse locations. It empowers individual property owners to generate income from their assets, fostering entrepreneurship.

For travelers, it provides more authentic and varied lodging options, but it has also raised significant regulatory, housing, and community impact concerns for local governments.

Examples

  • A homeowner lists a spare bedroom on Airbnb to earn extra income from tourists visiting their city.
  • A family rents out their vacation cabin on Vrbo during the seasons they are not using it themselves.
  • An investor purchases several apartments specifically to list them as full-time short-term rentals on various platforms.
  • A person rents out their Airstream trailer on Outdoorsy, allowing others to experience RV travel without owning one.

Frequently asked questions

What is the difference between the sharing economy and the traditional rental market?+
The main difference lies in the model. The sharing economy is primarily peer-to-peer (P2P), connecting individuals, whereas the traditional rental market is typically business-to-consumer (B2C), involving companies like hotel chains or large property management firms renting out inventory they own or manage.
Are all vacation rentals part of the sharing economy?+
While the terms are often used interchangeably, they are not identical. The sharing economy specifically refers to the P2P model. Many vacation rentals operate this way, but others are managed by large professional companies and resemble traditional hospitality businesses, blurring the lines.
How do property owners manage listings on multiple sharing economy platforms?+
Hosts who list their property on several platforms like Airbnb and Booking.com often use a channel manager to synchronize calendars and rates, preventing double bookings. Full-featured vacation rental software, such as Lodgify, often includes a channel manager along with tools for building a direct booking website and managing guest communications.
What are the common criticisms of the sharing economy in housing?+
Critics argue that the proliferation of short-term rentals can reduce the long-term housing supply for residents, potentially increasing rent and property prices. Other concerns include a lack of regulation compared to hotels, noise and security issues in residential neighborhoods, and the impact on hotel industry jobs.
Keep reading

Related terms

Industry

Peer-to-Peer Rental

Peer-to-peer (P2P) rental is a business model where individuals rent out property they own, such as a house, apartment, or room, directly to other individuals…

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Industry

Airbnb

Airbnb is a globally recognized online marketplace that connects people who want to rent out their properties (hosts) with travelers seeking accommodations…

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Marketing

Distribution Channel

A distribution channel is any platform or method used to market and sell vacation rental inventory to potential guests.

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Industry

Short-Term Rental (STR)

A furnished living space, such as an apartment or house, rented for a brief period, typically from a few days to under a month.

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