Interdependent Formation of Symbolic and Regulatory Boundaries: The Discursive Contestation Around the Home-Sharing Category

Interviews

We conducted 25 semistructured interviews with key representatives from regulators and providers as well as associations and interest groups that were involved in the category contestation (see Table B, online appendix). The interviews were conducted between December 2016 and August 2020. They capture retrospective accounts, real-time developments, and outlooks to the future.

We used a purposeful sampling strategy with the aim to select respondents from all key actors involved with roles relevant to our research question. We selected representatives from regulators and associations, such as from the City of Vienna, the European Commission, and the European Holiday Home Association (EHHA), to gain insights into regulatory processes and views on evolving regulation. We also interviewed representatives from incumbents, new entrant, and their respective interest groups (e.g., Home Sharing Club, Hotel Association) to understand why and how providers mobilized discursive accounts to shape boundaries.

Provider interview respondents typically involved top-level government relations and communications managers. These individuals were actively navigating their employers in relation to the symbolic and regulatory boundaries as well as in influencing these boundaries through direct means, such as lobbying, and more indirect ones, such as public relations. Respondents from regulators were key individuals at the local (city) level or the supranational (European Union) level, actively involved in conceiving, designing, and implementing regulations. Respondents from associations were in leadership positions, such as secretary general, offering insights into their approach for mapping and representing the field. Interviews lasted between 30 and 100 min, were tape-recorded, and transcribed verbatim for analysis.

In our interviews, we focused broadly on two main aspects. First, how do our interview respondents make sense of the emergence of home sharing and its evolving relationship with the wider short-term rental industry? Second, how do they, as interested market participants, seek to shape this process? For example, we asked our respondents from incumbent providers to describe their offer, not least in relation to Airbnb’s offer, and tell us how they sought to shape the evolution of the field. We asked respondents from regulators how they viewed home sharing and the wider short-term rental field, to what extent they saw a need for regulation, and how they envisioned effective regulation. Our interview data allowed the mapping of market participants’ discursive accounts for category contestation.

Conference observation

In December 2020, the first author took part in a 3-day conference on regulation in the wider short-term rental field. Extensive field notes taken during the conference were added to our comprehensive database. Attending conferences is a useful means of data collection because workshops and conferences “are central sites in which meaning production takes place for many categories” (Granqvist & Siltaoja, 2020: 21).

Archival documents

We collected three kinds of archival data for the time period of 2010 to 2020: (a) press releases, (annual) reports, and other formal communications from key providers (Airbnb, Booking, Expedia, Tripadvisor, and Vrbo/HomeAway); (b) newspaper articles about these providers and the wider fields of home sharing and short-term rental; and (c) policy documents, regulations, and court rulings at local, national, and supranational levels.

Press releases, annual reports, SEC reports, and other reports, such as white papers, give an indication of how market participants associate with categories as well as of their efforts in shaping these (e.g., Pontikes, 2012; Rosa et al., 1999). We collected advertisements as another form of official communication through which providers influence regulators indirectly through consumers (Ozcan & Gurses, 2018). For analyzing advertisements from online archives and the video platform YouTube, we considered texts, including video transcripts. We also used visuals as illustrative examples (Delmestri & Greenwood, 2016).

We used the database Factiva and specified keywords to search for relevant reporting in newspapers with an international (e.g., Financial Times) and national (e.g., Die Presse in Austria) readership. As an important intermediary voice (Boghossian & David, 2021), newspapers provide insights into changes of symbolic boundaries (e.g., Grodal, 2018; Hsu & Grodal, 2021) as well as the points of view of providers and regulators. Prior work has leveraged media data in similar ways to trace claims, tone, and category labels (e.g., Mathias & Fisher, 2022; Phung et al., 2021; Siltaoja et al., 2020). We used keywords to filter the large amount of press releases and newspaper articles. The list of keywords was informed throughout the research process and continuously adapted (see Table C, online appendix).

To create a representative sample of articles for coding accounts, we followed Grodal’s (2018) approach and selected two articles each month: articles that were published on or around the 1st day and the middle of a month. If too few articles appeared in a month, we included more articles in the following month. If fewer than 24 articles existed per year, we included all articles in our analysis, regardless of their publication date. This methodology resulted in a sample of 179 articles. Similarly, we manually screened for and included text from providers’ YouTube videos and advertisements to further enrich our database.

Finally, we retrieved policy documents, regulations, and court rulings from databases of local, national, and supranational regulatory and judicial bodies (see Table D, online appendix). These data helped to create a timeline and to trace the formation of the regulatory boundary.

All in all, these data amounted to (a) formal corporate communications from the new entrant, incumbents, and associations: 10 reports from Airbnb, including three yearly “update” reports and seven position papers; 10 annual reports each from Booking and Expedia, nine from Tripadvisor, and four from Vrbo/HomeAway; 87 press releases from providers; and six position papers from associations and interest groups, yielding about 5,750 pages of data, as well as 31 videos and eight billboards; (b) 1,797 newspaper articles, yielding about 1,450 pages or 850,000 words of text for the symbolic boundary and insights into category contestation, respectively; and (c) 29 policy and regulatory documents of more than 870 pages.

Step 1: Building an event history

We chronologically mapped the development of the emergent home-sharing market and the wider short-term rental field in Europe from 2010 through 2020. This helped us to identify critical events related to the emergence of the home-sharing category. Figure A (see online appendix) is a tangible outcome of this first analytical step. One critical insight from this step is that regulatory pressure was building up over time. Concretely, at the end of 2015 and the beginning of 2016, the European Union became active and published reports about regulating the emergent home-sharing category as part of the collaborative economy. Our subsequent analysis, described in Step 3, confirmed the time around 2016 as a crucial turning point, when attention shifted increasingly toward the regulatory boundary. Through sequencing (Grodal, Anteby, & Holm, 2021) of our data and the later-identified categories and themes (see Step 3), two distinct phases of category contestation emerged that informed our model development (see Step 4).

Step 2: Mapping the provider landscape

We mapped the landscape of providers as key market participants. Initially we categorized them as new entrant or incumbent based on our interview and provider-level archival data. However, we discovered that incumbents’ positioning toward each other, the new entrant, and the categories changed over time—an important observation, which we further investigated (see Table E, online appendix).

Step 3: Coding of the data

To code our data, we first operationalized and assessed the regulatory and symbolic boundaries (see Step 3.1 for details). Second, we used open coding to unearth underlying process drivers (Corbin & Strauss, 1990) (see Step 3.2).

Step 3.1: Coding of boundaries

A regulatory boundary is defined by the legal terms and conditions under which products are made and distributed (Funk & Hirschman, 2014; Ozcan & Gurses, 2018); a category boundary is strong/weak when it has a high/low contrast and low/high overlap with another category (Kovács & Hannan, 2010). Accordingly, we identified a weak regulatory boundary through a lack of legal status and definitions in regulatory texts as well as the overlapping and ambiguous application of laws and regulations. For assessing the lack of legal status, we searched for instances of an “unclear fit of home sharing regarding existing regulatory categories” and a “void of definitions of (additional) actors and services.” We coded instances as overlapping and ambiguous application of laws and regulations when there was “no agreement on applicability of laws/rules” and “conflicting rules/laws (across jurisdictions)” (see Table F, online appendix).

Conversely, a strong regulatory boundary is indicated by distinct legal definitions and status of home sharing as well as distinct and consistent application of rules and regulations. To identify distinct legal definitions, we looked for instances of a “regulatory classification of home-sharing activities and actors” and “clear thresholds for legal distinction.” To assess distinct and consistent rules and regulations, we looked at if “courts confirm nuances between categories,” the rise of “new laws tailored to home sharing,” and “consistency in application across jurisdictions.” We applied these codes to legal and policy texts to determine the strength/weakness of a regulatory boundary that “sets legal limitations” (Ozcan & Gurses, 2018: 1789). We triangulated this analysis with interviews with market actors and regulators.

Next, we coded our data to assess the symbolic boundary between home sharing and short-term rental. We operationalized the weakness/strength of a symbolic boundary as the degree to which the home-sharing category became symbolically established over time (Grodal, 2018). We used two indicators of a weak/strong symbolic boundary (see Table F, online appendix): The need for explanation of a new category as well as the rare use of a new category label suggest a weak symbolic boundary; in contrast, a taken-for-granted understanding of a new category and the frequent use of a new category label indicate a strong symbolic boundary. To assess the need for explanation of a new category, we manually coded newspaper articles for instances of the “elaboration of the home-sharing category,” “paraphrasing of the term ‘home sharing,’” and “reference to Airbnb as example.” In contrast, the “absence of explanation and elaboration” and the “use of home sharing as stand-alone term” indicated that home sharing had become a “household word” (see Grodal, 2018: 12). For the second indicator of weak/strong symbolic boundary, we quantitatively analyzed newspaper data (Figure 1) by tracking the frequency of use of the label “home sharing” over time. Table G (see online appendix) offers more evidence, illustrating our coding of boundaries.

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Figure 1

Prevalence of “Home Sharing” Content in Newspaper Articles Over Time and Relative Attention for “Home Sharing” Content in Newspaper Articles per Year

Step 3.2: Inductive coding

In a next step, we sought to reveal how market participants navigated and contributed to the shaping of symbolic and regulatory boundaries. We approached the data by asking who is doing what, when, why, and with what effect? We generated several dozens of in vivo codes, which we gradually collapsed into first-order categories that are close to the data and original terms used by informants and in documents (Gioia, Corley, & Hamilton, 2013). We aggregated categories into second-order themes that were more abstract and theoretically meaningful. In a last step, we aggregated second-order themes into aggregate dimensions (Gioia et al., 2013), which (together with the boundaries) became the building blocks for our model (Step 4). Figure 2 outlines the data structure.

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Figure 2

Data Structure

To identify discursive accounts, we analyzed interviews, formal provider communications, and newspaper articles to analyze the arguments market participants mobilized during category contestation. We coded written and oral discourse (Alvesson & Karreman, 2000) around the emergent home-sharing category, its relationship with short-term rental, and the ensuing boundaries. We identified “entrepreneurial opportunities,” “improvement for guests,” and “community empowerment” as first-order categories, which we then aggregated into the second-order theme “empowerment accounts.” In total, we identified four such accounts: “empowerment,” “demystifying,” “masking,” and “nuancing.” We combined these second-order themes into two aggregate dimensions: “demarcation through contrasting” and “demarcation through compromising.” To assess the relative distribution of these accounts and possible changes over time, we created two additional codes, “Phase 1” (referring to the period 2010–2015) and “Phase 2” (referring to the period 2016–2020). We coded all data related to discursive accounts with these time stamps and then calculated their relative prevalence at the aggregate level of accounts.

Once we had unearthed these discursive accounts, we investigated the context in which they were mobilized. We identified market participants employing these accounts as well as their positioning vis-à-vis other participants and the regulator. For this purpose, we analyzed interviews, annual reports, and press releases, and we identified “new entrant moving into professional short-term rental territory” and “new entrant moving into hotel territory” as first-order concepts, which we collapsed into the second-order theme “encroaching entrant.” Similarly, we identified “bandwagoning incumbents,” “defending incumbents,” “level playing field,” “tailored approach,” and “backtracking incumbents” as second-order themes for how actors positioned themselves. We aggregated these second-order themes into the dimensions of “market-oriented field positioning” and “regulator-oriented field positioning.” Table H (see online appendix) offers additional representative data and illustrates how our coding is grounded in our empirical data.

In sum, the tracing of the evolution of boundaries, discursive accounts, and market participants’ positioning over time became the building blocks for our theoretical model.

Step 4: Model generation

In a last step, we generated our theoretical model, which was informed by two main shifts: Actors’ field positioning shifted from predominantly market- to more regulator-oriented coalitions; accompanying this shift in positioning, we found that discursive accounts shifted during the contestation from mainly shaping the symbolic boundary to increasingly demarcating the regulatory boundary. Our model proposes that the mobilization of different discursive accounts drive a process of category boundary formation, with interdependent roles of symbolic and regulatory category boundaries.

Weak symbolic boundary

At the beginning of Phase 1, the symbolic boundary between short-term rental and the emergent category of home sharing was weak. Our analysis of major newspapers showed that the new category of home sharing was not self-evident and needed explanation. Journalists paraphrased the new term “home sharing” and elaborated on it, for instance, by noting that “homestays are becoming the new hotel stays” (The Times, 2013). Furthermore, newspapers often mentioned Airbnb to exemplify the new category of home sharing: “Airbnb, the site offering rooms in people’s homes” (The Guardian, 2011). Second, the label “home sharing” was used rarely throughout Phase 1. Figure 1 indicates a relatively low frequency, with only 9% of all articles in our longitudinal database (ranging from 2010 to 2020) predating 2015. Moreover, Figure 1 shows that during Phase 1, home sharing received little attention compared with short-term rental. Overall, the need for explanation of a new category and the rare use of a new category label indicate a weak symbolic boundary between the emergent and established category at the beginning of Phase 1 (see Table G, online appendix, for additional evidence).

Weak regulatory boundary

After Airbnb had entered the short-term rental market and introduced the notion of home sharing, the regulatory boundary between short-term rental and home sharing stayed weak throughout Phase 1. Our analysis shows that during Phase 1, a lack of legal status and definitions of the emergent category remained. Rather than providing distinct legal definitions for home sharing, cities across Europe started to highlight existing rules for touristic accommodation (e.g., Vienna’s §13 WTFG in 2013, Barcelona’s LLEI 5 in 2012, Berlin’s ÜnStG in 2013). There was widespread confusion as to whether home sharing would fit into the existing regulatory category or required a new regulatory category. Airbnb’s status was unclear, as this quote about Airbnb suggests:

The legal status [of Airbnb] is unclear; are they a travel agency? If they provide apartments, they might need a broker license. (Local Business Development Agency)

There was also a void of definitions of (additional) services and actors. For example, should offering breakfast and room cleaning be considered professional services? What would it legally mean to be a “host” versus a “landlord,” a “guest” versus a “renter”?

Second, and related to the lack of legal status, Phase 1 was characterized by overlapping and ambiguous application of laws and regulations. A range of regulations, such as tenant laws and laws for small businesses or accommodation providers, could have been applied to any short-term-rental-like activity. Yet, there was no agreement about when which laws would be relevant to whom. The following quote reflects the ambiguity:

If you rent it out once a year, then it probably doesn’t need to be regulated. But where is the threshold? With three times, with five times, 10 times—I have no idea. (City of Vienna)

The platform-based model of home sharing also turned out to be subject to conflicting laws. For example, travel-sector laws that demanded a registration of accommodation providers conflicted with privacy laws that prohibited platforms from transmitting data. In sum, the lack of legal status and definitions and the overlapping and ambiguous application of laws and regulations indicate a weak regulatory boundary throughout Phase 1.

Strong symbolic boundary

In 2015, at the end of Phase 1, we observe how the symbolic boundary between home sharing and short-term rental had become strong. First, our analysis shows that the term “home sharing” was increasingly taken for granted. Explanations and elaborations were much less frequent in newspaper articles. Rather, home sharing was used as a stand-alone term that, apparently, did not require further explanation. Second, our analysis reveals that the term “home sharing” was used with a substantially higher frequency. Figure 1 shows that the years 2016 up to and including 2019 revealed a persistently large share of articles referring to home sharing (20% of total coverage in 2010 to 2020 per year). It also shows that home sharing (compared to short-term rental) received proportionally higher attention in newspaper articles after 2015. Overall, with the taken-for-granted understanding of the new category and the frequent use of the new category label “home sharing,” our data indicate a strong symbolic boundary between the emergent category of home sharing and the established short-term rental category at the end of Phase 1.

Strong regulatory boundary

During Phase 2, the regulatory boundary between the categories of home sharing and short-term rental became increasingly strong: By 2020, the development of distinct legal definitions and status of home sharing had progressed considerably. The European Union had guided and thus increased the distinctness of definitions, pointing to a need to differentiate private from professional landlords, as an E.U. informant explained:

In our recommendations in the documents we always make distinctions between peer-to-peer and business. (European Commission)

The European Union started to make suggestions for distinct definitions for actors and activities, for instance, thresholds for professional short-term rental based on the number of apartments. In line with the European Union’s idea, a trend on the local level, toward more differentiation, followed suit. For example, in Vienna, after a change in the tourism law and building code in 2018, the revised regulatory manifestation suggested a distinct understanding of home sharing:

The commercial renting out of residential premises for short-term accommodation purposes is not permitted in residential zones. [However,] . . . home sharing (individuals renting out their private homes or rooms occasionally), does not fall within the scope of the law and is therefore permitted in residential zones. (Vienna Building Code, 2018)

This definition ensured a distinct regulatory understanding of home sharing. Simultaneously, short-term rental was becoming clearer legally. For instance, renting out a secondary or holiday home was not regarded as home sharing: As soon as rentals incurred a charge, they were deemed professional. By treating platforms and their promoted services as businesses, the city’s understanding was suggestive of a “traditional short-term rental.”

The trend toward more differentiation also found its expression in more distinct and consistent rules and regulations, as the examples of Vienna and Barcelona show. Whereas Barcelona imposed fines on all short-term rental providers for illegal accounts in 2014 to 2016, only home-sharing platforms—specifically, Airbnb and HomeAway—were fined in 2018. In 2020, in one of the most defining court rulings in Vienna, the commercial court ordered Airbnb to remove listings in which living spaces were used for unauthorized (touristic) purposes. The European Union’s suggestion for regulatory distinction between home sharing and short-term rental facilitated this creation and execution of increasingly consistent rules and regulations toward the end of 2020. In 2019, the Court of Justice of the European Union ruled that Airbnb as an online platform must be classified as an “information society service,” requiring it to hold an estate agent’s professional license. The court noted further distinctions. Indeed, online intermediation services may be classed otherwise, namely, if the intermediation forms an integral part of an overall service that falls under another legal class. In sum, our data indicate a strong regulatory boundary toward the end of Phase 2, confirmed by distinct legal definitions and status as well as distinct and consistent application of rules and regulations that address the legal distinctness of home sharing and short-term rental.

Next, we explain our finding of a subsequent alignment between symbolic and regulatory boundary. Rather than a seamless mirroring, we find that the formation of strong boundaries is the outcome of different modes of category contestation.

Low regulatory pressure

Low regulatory pressure was manifested, first, by a decentralized approach to regulation. Local regulators that were faced with the new phenomenon tried to initially independently understand and regulate the new business model in their cities. In these approaches, regulators struggled to find appropriate and fitting regulations for the new phenomenon, partly because they lacked top-down direction, which made the local approaches appear as relatively weak. Second, the low regulatory pressure manifested as regulatory slack that was experienced by market participants. Indeed, the new entrant, Airbnb, and the home-sharing notion it introduced, presented local regulators with an additional challenge. Beyond the lack of clear definitions and applicability of laws, it was unclear if and how home sharing may be monitored due to a lack of monitoring and control mechanisms: “Now, you’re talking about 40,000 occasional, casual, typically younger . . . people [renting out a place]” (HomeAway). Even pro-business actors showed understanding for the complexities regulators faced with respect to monitoring and controlling:

Control is really difficult! On the website, there is no information. . . . It makes it very hard to control and monitor. (Local Business Development Agency)

The lack of capability to monitor, let alone enforce regulation, was also noted by incumbents, who were denouncing their own tight regulation, while “there are unfortunately not enough resources to monitor it [i.e., Airbnb]” (local hotel association). A local labor union representative emphasized the need to escalate issues to a higher level of regulation:

As long as we do not know what we want . . . and there is zero priority [at higher levels of regulation], there will be problems.

Market-oriented field positioning

As market participants found little pressure to engage with regulations at this stage, they gave their attention to positioning themselves within the market. First, the new entrant focused on expanding and gaining market share. Concretely, we observe how Airbnb moved into traditional short-term rental and hotel territory, indicative of an encroaching entrant. Through this, Airbnb could soon reach an impressive scope, as the following excerpt from a newspaper article in 2013 describes:

The scope of [Airbnb’s] operation actually dwarfs that of traditional hotel companies. . . . Airbnb far exceeds IHG (InterContinental Hotels Group) with more than 4,600 hotels, and Marriott International, with more than 3,800 hotels, making it the largest lodging company and brand in the world. (New York Times, 2013)

Indeed, Airbnb’s success in significantly growing its market share so quickly was related to its purposeful encroaching, which is described by an Airbnb representative:

Brian’s [Chesky]—as a CEO’s—view is that we are in the business of travel and trips, not just the business of homes. Why wouldn’t we try and move into business travel or even longer-term stays?

Second, we found how bandwagoning incumbents, namely, Expedia, Tripadvisor, HomeAway, and Booking, followed in Airbnb’s footsteps into the new market category of home sharing. Having witnessed the rising popularity of the emergent home-sharing category, these incumbents adapted their business models, offers, and marketing toward home sharing. For instance, our informant from Booking explained their bandwagoning:

For us it’s demand driven. Although Booking is arguably better known for its hotel rooms offering, our company has its fair share in nonhotel accommodations as well. Responding to a growing trend of consumers looking for stays in places other than traditional hotels, the company launched Villas.com in May 2014 as a testing ground for alternative accommodations. Since then, Booking has always followed the demand of its consumers.

Hence, these bandwagoning incumbents sought to exploit the popularity of the home-sharing category, a subset of the wider sharing economy, as a powerful “cultural theme” (Grodal & Kahl, 2017). In the case of Tripadvisor, bandwagoning found expression in the diversification from being solely focused on restaurant and hotel reviews and listings to listing apartment stays. Correspondingly, in its annual report of 2012, Tripadvisor stated:

We diversified our vacation rentals business by purchasing a leading Spanish rental site, Niumba. Consistent with our past transactions, all these acquisitions are tuck-ins that fit nicely with our strategic roadmap bringing a unique traveler value proposition. (Tripadvisor, 2012: 5)

Third, another set of providers, defending incumbents, was sticking exclusively to its focus on traditional offers. These providers were members of the traditional hotel and apartment-rental business, represented mostly by the Austrian Hotel Association but also by the Viennese Apartment Manager Association. The following quote from a newspaper illustrates the antagonistic relationship between these incumbents and Airbnb specifically: “Airbnb has been for some time the favorite hate object of hotels” (Die Presse, 2015).

The defending incumbents—either not able or not willing to engage in the new business model—took a clear stance against the new entrant and bandwagoning incumbents: “It’s us against them” (Local Hotel Association). Table E (see online appendix) maps actors’ positioning.

Demarcation through contrasting

The positions co-occurred with discursive accounts that the market participants mobilized to contest over the symbolic boundary of the emergent category. The mobilization of these accounts drove symbolic demarcation between the categories of home sharing and short-term rental through the mechanism of contrasting.

First, bandwagoning incumbents and the new entrant’s championing of the new category involved empowerment accounts. These accounts revolved around the empowering of consumers and communities. They reflected the coalition’s efforts to position home sharing as an innovation by emphasizing the potentials of the new and distinct offering—often by contrasting it against the established category. Concretely, Airbnb; the bandwagoning incumbents Booking, Tripadvisor, Expedia, and HomeAway; and their interest groups mobilized accounts that highlighted entrepreneurial opportunities for empowered individual providers and positive externalities for communities. They also emphasized consumers’ benefits, such as more and better choice in contrast to established offers.

One of the strongest arguments permeating empowerment accounts was that home sharing equipped people with new entrepreneurial opportunities, helping them earn an (extra) income. A press release draws attention to the scale and number of “hosts” that benefited:

The German portal alone facilitated 6.8 million nights and 392 million in US-Dollar for their hosts in 2013. (HomeAway, 2014)

The positive impact also pertained to consumers’ emancipation and increased freedom of choice. Especially bandwagoning incumbents mobilized these notions to stress distinct benefits of the new symbolic category. Our informant from Booking offered:

We are strong believers in the freedom of consumer choice. At the end of the day, it is the very consumers who decide where they want to stay. Our job is to make it easier for them to experience the world and make sure they get the best match to their needs.

Similarly, it was argued that increased competition and new providers in the market with a distinct offering could only be of value to customers and improve their experiences. The representative from a local home-sharing club, a grassroots movement catalyzed by Airbnb, presented the emergent category as a refreshing alternative to mass tourism:

Consumers don’t want to lie at the beach like sardines, have all-inclusive drinking and eating. There will always be people who want that, but not in masses anymore.

New accommodation options—home sharing—would also allow people who were previously discriminated by the market, such as students, families, or larger groups, to travel:

Look at it as a market that was there, where demand existed, but we didn’t deliver on that demand: accommodation for bigger groups . . . on holidays, and who want to cook for themselves and that hate room service. (EHHA)

Improved experiences were also emphasized with respect to distinct authentic insights guests could obtain from staying at others’ homes. In contrast to standardized services of established offers, home sharing was portrayed as a unique experience that gets travelers in “contact with locals” (home-sharing club). This notion was highlighted in advertising by Airbnb and bandwagoning incumbents, such as Booking (see Figure B, online appendix).

Another argument was that the emergent category facilitated community building. In fact, Airbnb catalyzed communities (i.e., home-sharing clubs), nominating “superhosts” to organize them. The emphasis on community was very visible in our interviews with Airbnb:

The special thing about us, in comparison to other companies, is that we have a community structure. Airbnb only exists because we have an active and passionate community of guests and hosts; without it we would not exist.

The emphasis on the community of guests, and increasingly hosts, also found its expression in various formal communications. Tripadvisor, for example, in a press release in 2014, claimed “to engage its community—allowing travelers to share their own experiences.”

Bandwagoning incumbents were seeking to be in tune with the new entrant. Through empowerment accounts—comprising claims of entrepreneurial opportunities and experience—they sought to position home sharing as a new category with benefits for everyone.

Yet, these accounts were soon countered, mainly by defending incumbents who questioned the articulated arguments. Defending incumbents talked down the celebrated home sharing, thereby contributing to the symbolic demarcation through demystifying accounts. These accounts sought to paint a seemingly more realistic, less rosy, picture of the emergent category and Airbnb as its poster child. In highlighting negative aspects of the new category, portraying it as an inferior offer, market actors drove the demarcation of home sharing by contrasting it against the arguably superior category of short-term rental. One accusation voiced by defending incumbents in demystifying accounts was that the new businesses had nothing to do with the ideas of sharing and empowering:

This is big business. Of course, there are a few small private providers, but mostly . . . there is a big multinational company that makes millions. (Local Hotel Association)

Defending incumbents tried to minimize the genuine authenticity of home sharing. They argued that alleged home sharing was mostly a marketing facade and accused Airbnb of creating “a whole world around it” (local apartment manager association). In demystifying, defending incumbents highlighted how impersonal home-sharing experiences are. They argued that “these platforms were never really intended for sharing” (local labor union). As such, defending incumbents highlighted the inferior experience for guests from the new accommodation providers and contrasted these bad experiences to the superior services of the existing offers. The representative of a local apartment manager association complained, for example, that people renting out their rooms were amateurs. Missing services, such as breakfast and fresh towels, were highlighted, which traditional providers would offer: “We show the guests that they are welcome; it’s like a family, they are spoiled” (Local Hotel Association). The representative of the local hotel association also emphasized that traditional providers would “take guests seriously . . . [and be] there for them.”

The countering coalition drove the symbolic demarcation through demystifying accounts that directly contradicted accounts revolving around community empowerment. For example, it was argued that local communities suffer from a disruption of living because “there is a constant coming and going, with people arriving and leaving, suitcases rolling in the hallway, noise; that’s no fun for local renters” (local business development agency). In agreement with this point, the labor union representative argued that locals would be disrupted. Similarly, our informant from the local tourism association feared that

tourism penetrates areas, which it probably shouldn’t. . . . When groups of people rent private apartments, it becomes loud and funny, and then imagine that happens several weekends a year and the neighbors have to endure it. . . . The exponential growth of [home-sharing providers] might be good for shareholders, but not for society.

Opponents of the emergent home-sharing category also mentioned potential economic risks for the hotel industry and beyond: “If the [home-sharing] market becomes bigger and bigger and we have less business for the hotels, then we have a problem with unemployment” (Local Labor Union). It was also argued that housing affordability for locals was undermined.

Overall, the discursive contestation during Phase 1 revolved mainly around the normative dimension of the emergent category of home sharing, which drove its symbolic demarcation from the category of short-term rental through contrasting. Indeed, in 57% of cases, empowerment and demystifying accounts involved explicit contrasting, namely, arguments that put one offer vis-à-vis the competing one. As a result, a strong symbolic boundary was formed at the end of Phase 1. While we also found evidence of empowerment and demystifying accounts in Phase 2, they predominantly appeared in Phase 1 (see Figure 3).

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Figure 3

Relative Distribution of Empowerment and Demystifying Accounts Across Phases (in Percentages)

High regulatory pressure

First, the European Union started a centralized approach to regulation, which entailed workshops by the commission, wherein providers, regulators, and others

look at what can be done as guiding principles . . . [considering] all the issues such as market-access requirements, taxation, liability of platforms, health and safety; they will look at each topic, which impacts the economy. (E.U. Association of the Hospitality Industry)

While increasing the regulatory pressure, this centralized and inclusive approach was welcomed by representatives of the bandwagoning incumbents:

They [i.e., the European Union] are setting a good benchmark, I think, to the extent that they can help all of the national and local authorities come up with good ideas and answers that can sort of stop the divergence and create more convergence. (Inline Policy)

Also, Airbnb admitted “the [European Union] stuff is very important. As it connects everything . . . it tries to limit the amount of fragmentation that companies and people face.”

Second, with prospects of European cities tightening regulation under the European Union’s guidance, actors expressed a perception of increased regulatory risk. Our informant from Booking, for instance, offered: “These regulations are coming, they are not going away.” Expedia’s representative referred to rising negative sentiment against home sharing: “[It] has triggered local politicians to respond.” In its annual report of 2016, Expedia stated that it

has been and continues to be, subject to regulatory developments that affect the vacation rental industry and the ability of companies like us to list those vacation rentals online. (Expedia, 2016: 16)

Regulatory pressure was also fueled by an increased number of court cases. In Vienna in 2014, for instance, lawsuits were filed against touristic uses of apartments (e.g., OGH, 2014).

Regulator-oriented field positioning

An increased perception of regulatory pressure implied a shift toward a regulator-oriented field positioning, which now centered mainly on regulatory issues. This manifested also in actors’ lobbying efforts, reports, and participation in workshops and were mirrored in discursive accounts.

First, a set of market actors represented the interest of a level playing field, demanding that all market participants would be subject to the same rules to create fair competition. Concretely, it was the defending incumbents and local industry associations that took this approach. They advocated for fair regulation that would ensure competition on equal terms. In the case of local associations, for instance, the position for a level playing field’s interest became clear in this statement by a representative of a local chamber of commerce: “We don’t mind if they rent out apartments, but they have to stick to the same rules and regulations that also exist for hotels.” In taking a position for a level playing field, defending incumbents also proposed a reduction of their regulatory burden: “We have always asked for liberalization; it would provide a minimum of fair play, at least” (Local Hotel Association).

Second, some of the former bandwagoning incumbents that predominantly focused on professional rentals and hotels, namely, Booking and Expedia, also emphasized the need for rules that would apply to everyone. These backtracking incumbents started to distance themselves from Airbnb and the home-sharing category, as this example of Booking shows:

We have no intention having Booking on some kind of, you know, letters that we don’t want to be associated with [referring to Airbnb].

This was also reflected in Booking’s 2017 annual report, where it is mentioned that

restrictions may provide a competitive advantage to our competitors [referring to Airbnb and HomeAway] unless they are also subject to comparable restrictions. (Booking, 2017: 26)

Furthermore, backtracking incumbents increasingly emphasized their understanding and acknowledgment for the need of regulation of home-sharing offers:

Well, there is a requirement to have a registration number and then the e-commerce directive applies and we are informed of all of the illegal properties and we tell the owners that they are illegal, and if they don’t add the correct number, then they will be removed. (Expedia)

In backtracking, these incumbents created a coalition with actors taking a level-playing-field approach, arguing that rules existed and needed to be applied equally.

In contrast to the coalition that called for a level playing field, another coalition took a position for a tailored approach to rules and regulation, namely, the new entrant and the remaining bandwagoning incumbents, Tripadvisor and HomeAway. These providers often cautioned that regulations “should be based on facts” (Airbnb) instead of alarmism. Airbnb, for example, cited a 2016 study by the World Tourism and Travel Council to provide evidence against home sharing’s supposedly negative effects. Also, the representative from HomeAway argued that a lot of myths about adverse effects were simply wrong. Talking about houses that were bought only for investment purposes, for instance, the informant said that empirical evidence would reveal “it really weren’t that many” (HomeAway).

To counter overregulation due to alarmism, this coalition asked that “regulation should acknowledge the actual situation and see how we can create a smart regulation that is tailored to the potential” (Airbnb). Thus, this coalition took a position for new and smart regulations, tailored to the new kinds of offers and providers. The representative from the E.U. association representing the interests of technology and travel service providers elaborated:

So, you are going to ask [platforms] to collect the tax on behalf of somebody, who is actually . . . a local tax resident and liable for taxes? You know, there is nothing that prevents the City of Vienna, for instance, to go after somebody who is not paying taxes. . . . It’s the role of [regulators] to enforce the collection of taxes, and we don’t feel comfortable, quite frankly, to be pushed into the role of a tax collector. . . . So, you know, we have said, very clearly, that we believe this goes beyond what you can reasonably ask from a business. (EU Technology and Travel Services Association (ETTSA))

Demarcation through compromising

Market participants’ regulator-oriented field positioning in Phase 2 was accompanied by a new set of accounts—masking and nuancing—underlining increased efforts to shape the ensuing regulatory boundary, as a statement by Airbnb indicates: “We have to find messages that resonate with the European users and European politicians.” The mobilization of these accounts in the context of actors’ reshuffled field positioning drove demarcation through compromising on arguments. Our data show how nuancing and masking accounts were resonating with regulators in their search for synthesis to compromise across actors’ interests. Specifically, informed by nuancing and masking accounts, the regulator envisioned, developed, and implemented the idea that short-term rental and home sharing could be distinguished with the help of thresholds (e.g., number of nights during which a home is rented/shared). Arguments and accounts from the new coalitions resonated with the regulator, informed the regulator discourse, and ultimately found expression in regulation (see Table I, online appendix).

While we find evidence of masking and nuancing accounts also in Phase 1, they became more dominant during Phase 2, as market participants shifted their attention from contesting over the symbolic boundary toward the regulatory boundary (see Figure 4).

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Figure 4

Relative Distribution of Masking and Nuancing Accounts Across Phases (in Percentages)

Masking accounts emphasized that existing regulations for the short-term rental category were applicable to home sharing and related offers. Any differences—perceived or real—were thus masked. The coalition of defending incumbents, local associations, and backtracking incumbents—which were predominantly or exclusively active in the traditional vacation rental and hotel business, namely, Booking and Expedia—mobilized these masking accounts. They did this in their lobbying efforts as well as communications and interactions.

Most defending incumbents portrayed home sharing, from a regulatory perspective, as an extension of traditional short-term rental that was already regulated: “I don’t see the difference” (Expedia). Local actors agreed that “the offers are in principle the same” (local business development agency). Incumbents argued about a convergence between providers as home-sharing offers had become increasingly professionalized. In line with this argument, the representative of the local apartment manager association claimed:

There are many private landlords that have 10 beds, and a sauna, and a steam bath. The idea that many have is that it is a small private room, or a little house; but in reality, it’s not like that anymore.

An increasing professionalization was also emphasized in press releases, such as by Booking in 2019: “Booking.com launches new features for professional short-term rental partners.” The convergence of services underlined the existence of appropriate rules. This point was emphasized by the representative from a local tourism association: “Theoretically the laws are there; they just need to be applied.”

Similarly, one of the backtracking incumbents, Expedia, pointed to existing regulations while highlighting the threat of creating more regulation:

Everybody says there is no regulation, but that’s simply not true. There is plenty of regulation that is applicable: safety registration, VAT registration, consumer protection.

Overall, the level-playing-field coalition of defending and backtracking incumbents, whose businesses mostly worked with professionalized rental apartments and hotels that were already compliant with existing regulations, mobilized masking accounts. Backtracking incumbents retreated from their previous position and gave defending incumbents additional weight to argue that the existing regulatory category of short-term rentals should be applied to all providers. The actors thus suggested to simply apply the regulatory framework of short-term rentals to what had symbolically been defined as home sharing.

Masking accounts helped to drive the regulatory demarcation. They resonated with the regulator, for example, as evidenced in this statement about the convergence of offers:

As we have more professional offers on Airbnb than private ones, here the original idea of peer-to-peer is gone, but it is a professional business and here, of course, we need a level playing field and regulate them as short-term rentals. (European Commission)

As such, the E.U. representative agreed that there were laws that would be applicable for those cases that fall into the regulatory category of short-term rental:

We don’t need a whole new regulatory framework. We have existing laws and they are applicable also for the new market participants. (European Commission)

Not only masking accounts were picked up by the regulator but also nuancing ones, leading to demarcation as the regulator compromised between accounts.

The new entrant and some incumbents, namely, HomeAway and Tripadvisor, mobilized nuancing accounts, which emphasized the need to differentiate when regulating the evolving field. These accounts were not limited to lobbying. An Airbnb informant pointed to the use of other communications, such as advertising, to shape the regulatory boundary:

Lots of people have skin in this game and have opinions. Therefore that policy foundation is not always that stable, which means that as well as doing kind of the direct lobbying and the conversations directly with governments and regulators and with people like them, we also have to try and shape the public mood and reputation of the company and the idea of home sharing and actually promote it more broadly, which is why we do things like advertising campaigns [and] focus on home sharing as a legitimate thing.

Market participants called for targeted rules: “Airbnb supports specific home-sharing rules and regulations.” Airbnb also acknowledged a need for compromising: “Of course there have to be rules, but the old rules and ways of thinking have to be rethought; we have to think how these rules look in the 21st century.” Both the new entrant and incumbents highlighted the need for legal distinctions, for instance, between private and professional offers:

The main point is really to distinguish between professionals and the private people that offer an experience. (E.U. Association of the Hospitality Industry)

This differentiation was also pointed out by bandwagoning incumbents:

[For some offers it should be] very clear: They are not home sharing; they are holiday homes, vacation rental properties. (HomeAway)

Another way to argue why existing regulations did not apply to the emergent home-sharing category was to point to broader changes in the economy and/or industry. After all, changing industries called for changing rules and a compromise: “So, the challenge for regulators is definitively to not discriminate against innovative solutions” (Airbnb). It was also argued that changes did not concern accommodation only: Many forms of experiences were offered and shared, and regulations would need to take nuances into account. The remaining bandwagoning incumbents highlighted digital opportunities and regulators’ limited understanding of technologies and that new business models require nuanced regulation: “We need to be careful not to damage these business models” (Airbnb).

In sum, a coalition of the new entrant and remaining bandwagoning incumbents tried to prevent overregulation and a potential stifling of innovation by mobilizing nuancing accounts. Their accounts presented the previously established symbolic category of home sharing as a distinct regulatory category that called for a nuanced understanding. These nuancing accounts resonated with the regulator, as the following example shows:

Where it is purely peer-to-peer, we do not need to bring in the heavy machinery [i.e., regulation] that was built at another time. And of course, if it is not peer-to-peer and more professional, then we have some suggestions. (European Commission)

Similarly, the E.U. informant cautioned vilifying the new home-sharing category: “Of course, these are profit-oriented platforms and huge businesses, but we still have to handle this with care, not overregulate, make distinctions and regulate proportionally.”

The regulator developed the idea of thresholds as a workable solution. To compromise the two competing views of masking and nuancing, the European Union highlighted the need to define criteria or thresholds to make distinctions:

We have started to try to define applicable criteria to make a distinction. . . . And this has helped us to make better distinctions for the platform business. (European Commission)

Overall, we find evidence for the direct influence of discursive accounts on the ensuing regulatory boundary. Specifically, our analysis shows an increased resonance of arguments voiced in the discursive accounts of Phase 2 with the central regulator, namely, the European Union. Both nuancing and masking accounts influenced the discourse of the regulator and found eventual manifestation in regulations—the expression of a compromise in regulatory terms. On the one hand, we find how nuancing became manifest in the differences made between two regulatory categories: its expression in the regulator’s approach to the regulatory category distinction through threshold criteria. On the other hand, we find how masking became manifest in the application of the existing regulatory category of short-term rental to home-sharing activities. Table I (see online appendix) provides more evidence for this compromising and how arguments from both nuancing and masking became manifest in the discourse of regulators and, subsequently, regulations.

In sum, the discursive contestation in Phase 2 drove regulatory demarcation through compromising, which resulted in a strong regulatory boundary—the outcome of Phase 2.

Antecedents of the discursive contestation around category boundaries

The degree of regulatory pressure and the strength of symbolic and regulatory boundaries constitute the antecedents in our model of the discursive contestation around category boundaries. We suggest that these antecedents influence how market participants position themselves in the field and which accounts they mobilize. In Phase 1, a combination of weak boundaries and low regulatory pressure builds the antecedents that trigger market participants to occupy market-oriented field positions and to engage in discursive accounts that lead to the demarcation of the symbolic boundary between established and emergent categories. Concretely, low regulatory pressure leads market participants to position themselves regarding market opportunities and threats from the emergent category. With the symbolic boundary being relatively weak initially, market actors also engage in contestation around the symbolic boundary by mobilizing accounts that serve their market interests.

In Phase 2, a combination of strong symbolic and weak regulatory boundaries and high regulatory pressure constitute the antecedents for actors’ regulator-oriented field positioning and the mobilizing of accounts that lead to the demarcation of the regulatory boundary. Concretely, high regulatory pressure leads market actors to reorient themselves toward the regulator and to engage in discursive accounts that shape the regulatory boundary. Importantly, the outcome of discursive contestation of Phase 1, a strong symbolic boundary, constitutes another important antecedent for the shift of discursive contestation of Phase 2. The symbolic boundary serves as a basis to contest over the regulatory boundary. Next, we theorize the shifts of discursive contestation (i.e., positioning and accounts) and how they contribute to the relative strength of category boundaries.

From market-oriented to regulator-oriented field positioning

The field positioning of how market actors place themselves in relation to each other, as well as the shift in such positioning over time, constitutes an important mechanism for the formation of boundaries. Initially, in response to the antecedents of low regulatory pressure and weak category boundaries, actors take a market-oriented field position. Thereby, the new entrant encroaches onto the existing short-term rental category. Rather than opposing or attacking this encroaching, bandwagoning incumbents capitalize on the popularity of the emergent category and give it additional weight by coalizing with the new entrant. Defending incumbents recognize the emergent category as a threat and position themselves against it.

Later in the process, in response to increased regulatory pressure, market participants change coalitions and take a regulator-oriented position. On the one hand, the new entrant and bandwagoning incumbents, which are substantially invested in the new business model, position themselves with a tailored approach. On the other hand, defending incumbents take a level-playing-field position. They are joined by backtracking incumbents that previously bandwagoned based on the emergent category’s popularity without significantly changing their business models. This backtracking shifts weight back to defending incumbents. Next, we describe how the shift in positioning is accompanied by a shift in discursive accounts.

From symbolic to regulatory demarcation

The divergent market and regulatory interests of the coalitions of market participants culminate in the demarcation through discursive accounts that ultimately result in the strengthening of boundaries. In Phase 1, actors with market-oriented positioning mobilize empowerment and demystifying accounts that drive the demarcation between the emergent and established categories through contrasting them against each other. This demarcation leads to a strong symbolic boundary as the outcome of the contestation in Phase 1. In Phase 2, the discursive accounts shift toward regulatory demarcation through compromising, which reflects actors’ regulator-oriented field positioning and builds on the established symbolic boundary. This discursive contestation that compromises masking and nuancing accounts leads to a strong regulatory boundary.

In sum, our theoretical model (see Figure 5) explains the outcome of interest—increasing strength of interdependent symbolic and regulatory category boundaries over time (what?)—based on two mechanisms that drive the process of boundary formation: the field positioning and shifts therein (who?) and the discursive accounts mobilized (how?).

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Figure 5

Theoretical Process Model of Contestation over Symbolic and Regulatory Boundaries

We argue that our theorization based on our case study insights has more general theoretical purchase. For example, we would envision a similar process to be observed for lab-grown meat or the cryptocurrency category. For the latter example, our theorization suggests that currency providers would first contest over drawing a boundary between cryptocurrency and fiat currency; once a sufficiently strong symbolic boundary between the two could be drawn and at least temporally settled, as a result of demystifying accounts, the regulator would become alert, increasing the risk of regulation, and the contestation would shift from the symbolic to the regulatory realm. Prior work suggests that a regulator needs to be “forced into a conversation” (see Gao & McDonald, 2022: 954), and we theorize that this happens once the symbolic boundary of an emergent category is sufficiently strong so that the regulator can effectively direct its attention to the nascent market. Overall, our study contributes to existing research on categories and category boundaries in three main ways.