Abstract
The purpose of this article is to analyze the market value impact of actions taken in response to disruptive innovation; specifically, actions that incumbent lodging firms implement to adopt the innovation of peer-to-peer trading-based accommodation rental. As incumbent firms need to device strategies to accommodate the disruption stemming from a new entrant with a disruptive business model, we analyze the differentiated efforts of four incumbent lodging firms to compete with the peer-to-peer lodging firm Airbnb. This study is the first to quantify the effects of innovation on incumbent tourism firms challenged by a disruptive entrant. It finds that adoption speeds, that is first vs. late adoption, make a difference as the former are awarded a significant increase in market value.
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