CONSUMER BEHAVIOR STUDY ON THE ACCEPTANCE OF AIRBNB FROM CONSUMER IN SURABAYA, INDONESIA Felicia Alamanda Wahono, Endo Wijaya Kartika Program Manajemen Perhotelan, Program Studi Manajemen, Universitas Kristen Petra Jl. Siwalankerto 121-131, Surabaya Email :[email protected] Abstract - The overall aim of this study is to investigate the acceptance of Airbnb accommodation establishments from people belonging to the Millennials Generation in Surabaya, Indonesia. The study employed an online survey, in the form of a questionnaire to implement its fieldwork and to get hold of the respondents’ views. The key findings of the fieldwork addressed that there are three main factors which affect the Millennials when selecting an Airbnb accommodation and those are price, amenities, and consumer reviews. Additionally, safety, cleanliness, and hosts’ attitudes are also important factor for the acceptance of Airbnb in Indonesia. Keywords: Airbnb, sharing economy, millennials, consumer behaviour INTRODUCTION In this modern era, people tend to spend their leisure time with their family and friends while also explore various tourism destinations around the world. Moreover, the tourism industry has grown significantly and resulted in the growth of accommodation sector which become one of the most important factor to support those destinations. Accommodation provides the opportunity for tourists to stay longer, enjoy the attractions and local communities while also provides service which is the fundamental element of tourism industry (Johnpaul, 2016). To fulfill a customer’s need, a lot of hotel companies built their properties abroad in different tourist spots which have various range rates. In additional, the development of accommodation does not only bring competition, but also brings numerous new products and services standards from hotel industry which arise because of the sophistication of the internet and technology. Nowadays, customers can easily interact with tourism providers who have been using internet to communicate, sell, and promote their products and services in an efficient way for both cost and time (Munoz and Amaral, 2011). Therefore, technology and internet impact directly on the growth of hospitality industry in the past few years. According to Zervas et al (2016) study, technology innovations have streamlined the process of entry for new comers which lead to the sharing economy as an alternative supplier of goods and services today. Moreover, sharing economy is an economic system based on sharing assets or services for a fee directly from individual which utilize social media and mobile technologies for their latest expansion (Botsman, 2015; Penn and Winbey, 2016). As a result of the sharing economy, Airbnb arise as 546 one of the internet mobile accessed businesses which provide accommodation also become the main concern of hotel companies around the world. Since 2013, the sharing economy has already entered Indonesia such as Airbnb which brought some advantages for customers (Liem, 2015). Furthermore, Airbnb is being positively accepted by Indonesian people and most of them are using products or services from this sharing businesses because of its lower price, its easier way to access and etc. In the Budiman, Chor, and Razdan (2013) study, it has been founded that the behavior of customers in Indonesia especially in Surabaya tends to be more influenced by new brand and image to use products or services. Moreover, travelers can further choose their preference accommodation in Airbnb website based on price, location, amenities, photographic representations of the property and customer reviews as well. Therefore, the purpose of this study is to figure out the most influencing factor that encourage customers in Surabaya, Indonesia to use Airbnb accommodation. LITERATURE REVIEW The Sharing Economy Anastasia (2015) defined the sharing economy as a a new economic business model and focuses not only on the ownership but rather on the access to resources. When the demand increases significantly and the supplier can not fulfill it, sharing economy is the answer for this problem. Nowadays, sharing economy is more efficient than other economy business model which enables to share through technology and create various consumer experiences (Anderson, 2016). This economic business model fits perfectly with urban lifestle which has numerous neighbours yet just have a little storage. Moreover, sharing economy also a new innovation that enable people to transform the way they work and interact with each other by using technology which can reduce transcation costs, easier and cheaper to share assets with others (The Economist, 2013). According to Escobar (2016), 1,2 billion people traveled for business and leisure and it will be expected to grow by 4% in 2016. In fact, sharing economy will give some impacts toward tourism industry such as generating new job positions for sharing companies. However, tourism industry still is one of the most affected area by peer – to -peer sharing economy business model because local residents who share homes, cars,meals, and products with tourists , will change their attitude toward tourism development (Heo, 2016). Because of the sharing economy, most hotel companies are being challanged by the presence of this economy Business model as a disruptive innovation in hospitality industry (EHL, 2016). Airbnb, Alter Keys, 9Flats, and Flipkey are the applications of sharing economy in the hospitality industry. They takes an advantage by using apps. mobile devices so that their users can easily access easily about the information of the properties, walkable restaurants and the most attractive locations (Zervas et al., 2016). However, even though these companies are famous for their affordable prices, this is not the only factor that attracts guests to use Airbnb accommodation, yet they want to get the cultural experience, to interact with locals and build relationships with the host (Heo, 2016). 547 Consumer Behavior According to Engel et al. (2001), consumer behavior is the action and decision processes when people pruchase goods and services for their needs. In the fact, understanding consumer behavior is important for companies in order to know how the potential consumer will respond to their product or service and to help companies identifying their opportunities in the future. In this era, most hotel companies give their attention toward customer experience which can directly influence customer feelings, attitudes, and buying attentions and lead to buying behavior. Obviously, each customer will have different experience because of the uniqueness of hospitality experience. Gaggloli (2015) stated that cultural experience and location become two major contributing factors toward consumer behavior. Moreover, The Service Dominant Logic by Vargo and Lusch (2004) claimed that the paradigm has changed from company – centric value to co-creating value with consumers. Furthermore, The Service Dominant Logic underlines the importance of interaction between consumer and supplier to create consumer value (Vargo and Lusch, 2008). According to Fratu (2011) , there are three main factors that influence today’s consumer behavior which are personal factors, social factors, and situational factors. Attitude, personality, self-image, motivation, perception, life style, age can be known as indicator of personal factor. Moreover, culture and family can affect consumer behavior as social factors where as physical and situational environment also state of mood can be generated as situational factors. Millennials Millennials are people who were born from 1980-2000 and becomes one of the largest generation in history (Euromonitor International, 2015). Moreover, millennials will reshape the economy with their unique experiences which can change the way of transaction and also they force companies to identify their strategy that will fix with millennials segment (Goldmansachs, 2016). In addittion, millenials also need a personal voice rather than just public advertisement (CPBJ, 2015). Furthermore , they will not easily trust the companies advertisment but the prefer to get some opinions and recommendations about particular product or service from other consumers especially from the same generation. Having an uneasy economic situation, growing and graduating high school or college have made millennials cautious to save and spend money wisely (Cardinal Financial, 2016). Since that, sharing is the new concept of ownership for millennials generation because ownership can be an obstacle for them to take care and to maintain the products (Arthursson, 2016). According to the Cardinal Financial (2016), the idea of sharing fits perfectly with millennials because they can enjoy the benefit of usage the product or service without have a responsibility to maintain and to take care of it. In addition, it has been proved by Kline (2016) that millennials who grew up with the internet and technology gives some contributions in the sharing economy more than the older people. 548 According to Barry (2016), 65% of millennials believe that sharing economy is becoming more important to the economy and 75 % of millennials believe that Airbnb as a sharing company will give positive impact towards middle income families to rent their homes as their properties. To conclude, becoming price sensitive and delivering an exceptional experience through the inspiration and personalisation are the most important things to do to attract millennials generation in the hospitalty industry (Ganatra, 2016). Airbnb According to Guttentag (2013), Airbnb is an online business through which people can rent out their places as an accommodation for customer and their various spaces which starting from private room, house, villa or apartment. The host of an accommodation probably living in or undertaking the space as a permanent rental. Each host shows importance information such as property’s rate, location, photographic representations of the property, ‘capacity, availability, check-in and check-out times, cleaning fees, and security deposits’ (Zervas et al, 2016). Airbnb itself brings some advantages for users both customers and hosts. For the first time, customers become part of co-creating the value and they have a responsibility to manage their own value chain (Oskam and Boswijk, 2016). Another article found that people who rent or share their homes on Airbnb will use their income to avoid expulsion and confiscation (Edwards, 2016). Even though Airbnb provides preferable value than similarly rates hotel companies, there are numerous issues such as illegal rentals, tax problems, and securities that become a concern of the government (Choi, 2015). In this chapter, the study aimed of figuring out the most influencing factors that might encourage customers in Surabaya to stay at Airbnb accommodation which will be focused in this study are price, location, amenities, photographic representations of the property and customer reviews. METHODOLOGY In this chapter, the study will present about overall methodological approach which used literature review as secondary research and web pages, journals, books, articles as secondary data in primary research where as quantitative research as primary data. Moreover, web-based questionnaires is an appropriate choice to conduct the research because it is cheaper, not time consuming, also effective and efficient for the author to get the data. These online questionnaire from google form will be devided into two sections. The first section will pose general questions such as age, marital status, job, education and etc. Moreover, the second section will be more focused on five main factors that encourage consumers in Surabaya to use Airbnb accommodation by using likert scale which range from 1 (strongly agree) to 5 (strongly disagree) and the questionnaire will have open –ended question to ask another factors that might encourage them to accept and use Airbnb accommodation. The author will pilot the web questionnaire by sending the link to 10 Surabaya respondents who both already used Airbnb accommodation or those who does not yet use it.Moreover, the sample will be distributed to 150 people by using convenience and snowball sampling. The results of 549 these online questionnaires will be processed by Excel which allows various types of analysis and enables the author to create the statistics from simple descriptive numbers to complex analysis which mean, mode, median, standard deviations and variance of the collected data will be calculated. Moreover, this study will use deductive approach which will test the hypothesis and use research question to narrow the field of the study. Additionally, a survey with the questionnaire will be used to explore more about this topic. ANALYSIS OF RESULTS 4.2.1 Demographic Data Demographics Number of Percen Respondents tage 1. Gender 2.  Male 78 37.5%  Female 130 62.5% 3. Age  16-26 183 88%  26-36 23 11.1%  >36 2 0.9% 4. Marital Status  Single 183 88%  Married 14 6.7%  Married with kids 10 4.8%  Divorced 1 0.5% 5. Current Occupation  Student 155 74.5%  Employeed full-time 24 11.5%  Employeed part-time 8 3.8%  Self employeed ( 17 8.2% 3 1.4% Entrepreneur,etc)  Unemployed 1 0.5%  Retired 550 6. Monthly Income  Less than Rp.2.000.000,00 106 51% (Less than $148.62 USD)  Rp.2.000.000,00 – 51 24.5% Rp.3.000.000,00 ($ 148.62 USD-$222.94 USD)  Rp.3.000.001,00 – 17 8.2% Rp.5.000.000,00 ($ 222.95 USD-$371.56 USD)  More than Rp.5.000.000,00 34 16.3% (More than $371.56 USD) 7. Current Level Academic of Qualification  High School Diploma 83 39.9%  Bachelor’s Degree 116 55.8%  8 3.8% Master’s Degree  Doctorate Degree 1 0.5% 8. Place of Residence (Region)  West Surabaya 36 17.3%  East Surabaya 111 53.4%  North Surabaya 6 2.8%  South Surabaya 39 18.8%  Center Surabaya 16 7.7% Table 4.1 Demographics data of participants in Surabaya As can be seen from table 4.1, the total number of respondents was dominated by 130 female participants (62.5%) and 78 male participants came second (37.5%). Moreover, 183 of them are in the age of 16-26 and 23 participants are in the age of 26-36. Both of these age categories can be known as Millennials which are people who were born started from 1980 until 2000 ( Euromonitor International, 2015). Furthermore, more than half of my participants (88%) are single, 14% of them married, and 10 participants married with kids . This table shown that the most three current occupation of the participants are students, employeed full-time and self employeed such as freelancer, entrepreneur, and etc. Additionally, 155 participants are student and the monthly income which less than Rp.2.0000.000,00 came first (51%). To be exact, for the current level academic qualification, 116 participants ( 55.8%) which equal as half are still doing 551 their Bachelor’s Degree and 83 of them are high school diploma (39.9%). Lastly, more than half respondents (53.4%) live in East Surabaya where tourism significantly growth ( Cochrane, 2008), 39 participants lives in South Surabaya and followed by 36 participants who lives in West Surabaya. 4.2.2 The Sharing Economy, Airbnb, Indonesia Questions Number of Percenta Participant ge s 9. Are you familiar with the concept of the sharing economy?  Yes 113 54.3%  No 39 18.8%  56 26.9% I have heard about it but I’m not quite sure what is all about 10. Are you aware of Airbnb and what this company does?  Yes 142 68.3%  No 37 17.8%  29 13.9% I have heard about it but I’m not quite sure what is all about 11. Have you stayed in an Airbnb accommodation property in the past?  Yes 93 44.7%  No 115 55.3% 12. In case that you have stayed in an Airbnb propertyin the past, how did you find out about it?  Website 29 23.2%  Social media 34 27.2%  62 49.6% Friends’ and family recommendations Table 4.2 Awareness of the sharing economy and Airbnb 552 This table showed about the awareness of the sharing economy and Airbnb from people in Surabaya. To be exact, 113 participants (42.3%) are aware of the sharing economy and followed by 56 of them have heard about this economic business model but not really sure about it. Furthermore, 142 (68.3%) people answered that they are aware about Airbnb and what was done by this company. To prove, Barry (2016) pointed out that 65% millennials believe that the sharing economy is important nowadays and 75% of them stated that Airbnb gives a positive impact towards middle income families to become an entrepreneur. However, even though half of them are aware about the sharing economy and Airbnb, 115 participants (55.3%) have never stayed in Airbnb accommodation before because Airbnb is still newcomer in Indonesia and most properties only available in big cities (Go Backpack Go, 2016). Moreover, some participants still do not know about the Airbnb and what this company does because it did not create awareness towards these participants therefore, half participants have not stayed at Airbnb accommodation in the past. Additionally, 62 participants (49.6%) know about Airbnb from their friends’ and family recommendation which in fact that most of the participants are millennials and its behavior will not easily trust the companies advertisement (from official website which got 23.2%) but prefer to get some opinions from other consumers especially from the same generation (CPBJ, 2015). In addition, social media such as Facebook and Instagram is the second highest which got 27.2% because nowadays companies need to become a part of consumer’s routine conversation (Accenture, 2016).. Question Mean Standard Deviation 13. How much do you think that the sharing economy 3.629808 0.989059 concept and Airbnb fits with the culture of Indonesia? Table 4.3 The relation between the sharing economy concepts, Airbnb, and the culture of Indonesia Table 4.3 shown that the mean for the question is 3.62 and standard deviation below 1, which means that all respondents did not really agree yet did not really disagree that the sharing economy concept and Airbnb fit with the culture of Indonesia. To support this result, it has been known that Indonesia is collectivism country which means its people prefer to live in group with each other (Cultural Atlas, 2016) which also becomes a symbol of loyalty (Geert-Hofstede, 2016). Moreover, the sharing economy concept and Airbnb are suitable with this collectivist culture because by staying at an Airbnb accommodation, consumer will be able to interact and communicate with the Airbnb hosts. In fact, people in Surabaya maintain harmony and enjoy solidarity among others which means also encourage people to support others as consumer and hosts both in economic and social (Cherry, 2016). Furthermore, because of the implementation of the sharing economy in Indonesia, it will also overcome the growth of poverty and unemployment rates by generating new job positions. However, 2.4% of respondents stated that 553 safety and trust still become the major decisive factors of this economic business model which need to be considered in order to fit with culture of Indonesia. Statements Mean Standard Deviation S1. “I think Airbnb enables people to share skills and 3.831731 0.940528 change the way they interact with others”. S2. “I believe that Airbnb can develop a culture of trust in 3.817308 0.924852 Indonesia”. S3. ” Trust, access, openness, and transparency are the most 4.096154 0.901091 important principle of the sharing economy”. S4. “I like Airbnb because it offers a unique experience 3.942308 0.935886 through inspiration and personalization from and for their users”. S5. “I value the flexibility, affordability, and convenience 4.105769 0.894625 when choosing accommodation”. S6. “Personal factors (e.g. attitude, motivation, lifestyle, 4.110577 0.891334 age, etc.) affects me to choose and use Airbnb accommodation”. S7. “Social factors (e.g. culture, family, etc.) affects me to 4.038462 0.94202 choose and use Airbnb accommodation”. S8. “Situational factors (e.g. environment, state of mood, 4.028846 0.982521 etc.) affects me to choose and use Airbnb accommodation”. S9 “Responsibility, accountability, and safety become the 4.153846 0.882128 major problems of the sharing economynowadays”. S10. “Because of the sharing economy and Airbnb, most of 3.975962 0.924387 hotel companies are quite challenged”. Table 4.4 Statements towards the sharing economy and Airbnb As can be seen from table 4.4, there are 10 statements related with the sharing economy and Airbnb which most of them got approximately 3 to 4 for mean and got below 1 for standard deviation that means that all respondents agree with those statements. Furthermore, respondents agree that Airbnb enables people to share skills and change the way they interact with others also it will develop culture of trust in Indonesia. Additionally, millennials tend to can trust each other easier than before (Walsh, 2011). Moreover, they believe that Airbnb can give its customer unique experience when they stay in an Airbnb accommodation because Airbnb fits perfectly with the urban lifestyle which not only provide affordable price but also cultural experience by interacting with locals. In addition, they stated that, trust, access, openness and transparency become the major principle of the sharing economy which need to be considered yet there are still some major problems for this economic business model especially Airbnb such as responsibility, accountability, and safety for the security issues about payment details and 554 personal information. Because almost all of respondents are millennials, so that 5th statement got 4.1 for the mean which means these participants agree that they value the flexibility, affordability, and convenience when choosing accommodation. To prove this result, Arthursson (2016) pointed out that millennials like the sharing economy more than ownership which can be an obstacle for them to take care and maintain the product. Furthermore, Downs (2016) stated that millennials really value the flexibility and an access without ownership which can give maximum convenience with low cost. For 6th, 7th, and 8th statements got approximately 4 for the mean which means all respondents agree that these three major factors which are personal, social, and situational factors affect them when choosing and using an Airbnb accommodation. In addition, self-image as one of personal factors which nowadays millennials take consideration towards what and how themselves want to be seen and it has a bug influence for their consumer behavior. In social factors, some people might think which by staying together in one accommodation (consumer and hosts) without have any family relation, it will deviate with the culture of Indonesia. Hereafter, state of mood is one of situational factors which can describe consumer who might avoid to interact with others or to look for the cultural experience by communicating with locals and hosts. Moreover, the respondents also agree for the 10th Statement which got 3.97 for the mean stated that because of the Airbnb, most hotel companies are quite challenged, especially those hotel companies who provide low prices will get bigger impact rather than the high prices because they have same target segments with Airbnb. 4.2.3 Factors that might influence consumers in Surabaya to use Airbnb accommodation Factors Mean Standard Rank Deviation Price 4.269231 0.9245 1 Property’s location 4.0625 0.890604 4 Property’s amenities 4.100962 0.887051 3 Photos of the Airbnb property on Airbnb site 4.048077 0.926057 5 Customer reviews 4.168269 0.919753 2 Table 4.5 Factors that might encourage people in Surabaya to use an Airbnb accommodation Table 4.5 showed that there are 5 major factors which might influence consumers in Surabaya to use an Airbnb accommodation. Moreover, the most three influencing factors are price which got 4.26, customer reviews got 4.16 and property’s amenities got 4.10 for the mean. In fact that our 99% of our respondents are millennials which are cautious to save and spend money wisely (Cardinal Financial, 2016) because one of this generation problem is their low average income (Euromonitor International, 2015). It has been proven that amenities are important for the consumers according to Airbnb action (2016) and consumer reviews becomes an important tool for another consumer to find out, assess, and compare with other properties (Zervas et al., 2015) which nowadays consumer takes control (Locklard, 2015). Furthermore, location factor 4th 555