By Graham Perkins, the Marketing Partnerships Manager at Favela Experience, a social enterprise that provides immersive and affordable room and apartment rentals for travelers in Rio de Janeiro’s favelas.
The sharing economy, which really took hold in in the US following the 2008 Financial Crisis, looks to expand into the developing world as increases in mobile penetration are driving people to use the internet for more daily activities. The central idea behind the so-called collaborative consumption trend is to capitalize on underutilized capacity and give both “lenders” and “borrowers” the chance to benefit in the process. In the US, companies such as Relay Rides, LiquidSpace and Task Rabbit are inventing new ways for people to share cars, office space and even daily errands. Although these services have seen rapid adoption in the US, the rapid rise of mobility in the developing world means that there is great growth potential for these sharing economy services. Brazil, where social media activity and mobile Internet use is already some of the highest in the developing world, is a case in point. Descola Aí has built itself into a credible online marketplace for peer-to-peer buying and selling and there has also been significant success with mobile-based bike sharing in Rio, Porto Alegre and Recife. With smartphone ownership rising in the developing world, increasing comfort with making online transactions, and log-ins through platforms such as Facebook and Google+ encouraging users to use their true identity on the Internet, the viability of these sharing services should grow in the coming years.
We view room sharing as being the first sharing economy service that will take off in a big way in the developing world, and particularly in Brazil. Reasons for this include sky-high hotel prices and lack of hotel capacity in places such as Rio de Janeiro, but also more Western travel to Brazil and more Brazilians traveling in their own country. Room sharing typically offers a cheaper alternative and similar service as a hotel, but also a much more immersive experience, which we feel increasingly appeals to 20 and 30-something Westerners. Backpacker hostels have long been a mainstay for this demographic in Latin America, but through my experience traveling in hostels throughout South America, I found that they were too familiar and felt disconnected from the culture of the area where I was staying. Although it was nice to meet people with similar backgrounds from the UK and Australia, it seemed we ended up doing the same activities and not branching out and experiencing all that there was to offer.
Homestays offer a more unique travel experience that is both affordable and transformative for the traveler. The ability to live, for example, in a favela community in Rio with a Brazilian family, go to the local markets to buy food, interact with locals at nearby Funk parties and play pick-up games of soccer with the local kids gives a much more holistic travel experience. Travelers who vie for these room-sharing homestays get a much more culturally rich experience and tend to be more likely to form a permanent bond with the communities they interact with during their travel. Further, travelers are so impacted that they become ambassadors of this unique type of experience.
Perhaps the most important result of this is that through this form of travel you create truly sustainable communities that see the full benefits of tourism. For too long the only benefits these communities saw was from working minimum wage jobs at hotels or associated tourist attractions on the beach. With room sharing in favela communities, not only do the hosts benefit from a greater chunk of tourist spending, but the markets and local travel service groups also realize greater value. These groups of people that live and work in the favelas spend their money there and create a virtuous cycle of sustainable economic growth that will only grow as things like room sharing increase in popularity. Although our experience is particular to Rio, we see opportunities for room sharing and associated tourist services across Brazil and throughout the world and believe that the trend towards experiential travel enhanced by internet access and mobility will gain significant traction in the coming years.
Photo credit: Elliot Rosenberg, Founder & CEO of Favela Experience