Digital Disruptors Grow Up Fast

The digital disruptor has a finite life span before it too needs to recreate itself. The brave new world approach may have a finite life span before being re-consumed by the ‘old world’ it set out to destroy.

Remember the advent of Travelodge and Premier Inn’s et al. They took the hotel market by storm. Offering a low cost solution to overnight accommodation they initially occupied low cost industrial plots, built modular hotels and sold rooms for £19 a night. No breakfast. Hotels slowly responded seeing a way to offset competition by reducing their prices and the range of their offers. Breakfast a traditional element of an overnight stay become an optional extra.

In the meantime the budget hotels found their offer could be extended to the high street. Up went the nominal price accordingly. The £19 per night went up to £22, £29 and now knock around the £79 mark. The burgeoning budget hotel market had become a teenager. Improved room layouts, adjacent catering facilities and a substantial growth in the numbers of hotels built become the norm. Traditional hotels again responded, although the price comparison sites rip 15% of the price in commission, breakfast included became more widespread.

Now a digital disruptor in the hotels market has emerged in the form of Airbnb. The cheap rent a room approach had a massive swipe at conventional and budget hotels. The growth of Airbnb had been spectacular, but it too is now changing. The number of people renting out a spare room is being overtaken by the commercial approach. Commercial operations are buying up entire blocks of flats or half a street to become an Airbnb establishment. Luxury sheds are being installed in gardens. The income is appreciable but so also is the social impact on local residents. There is a treat looming to format of Airbnb.

Uber is a similar case. The cheap hailing service that threatened the conventional taxi spurred a gig economy. Criticism of its poorly controlled modus operandi spread. But now a change is emerging. Uber is allowing the drivers to set the price, they can respond to local conditions and competition more readily. Prices of the once eagerly competitive service are now destined to be less attractive. Drivers, as a result, are no longer part of the gig economy are now considered to be contractors. A new ball game is set to run. As the saying goes, disrupt or be disrupted something conventional and disruptor businesses need to keep in very sharp focus.

Alistair Owens

The meandering thoughts of someone with too much time on his hands. Tending to see the obscure and irrelevant in most events I have been forced to record this by family members as a means of diverting attention away from them. But I see their plan.

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