PESTEL ANALYSIS OF AIRBNB

Added on - Oct 2019

Trusted by 2+ million users,
1000+ happy students everyday
Showing pages 1 to 3 of 6 pages
PESTEL ANALYSIS OF AIRBNB
H1: Detailed PESTLE Analysis of AirbnbA‌i‌r‌b‌n‌b‌,‌‌‌I‌n‌c‌.‌uses ‌to ‌operate‌as ‌an ‌online‌marketplace‌that ‌provides‌hospitality‌services‌toworldwide‌customers.‌It‌offers‌lodging,‌tourism‌and ‌homestays‌services‌via ‌mobile‌applicationsand ‌ websites.‌ It ‌ was ‌ founded‌ on ‌ 27th‌ June ‌ 2008.‌ Airbnb‌ is ‌ located‌ in ‌ San ‌ Francisco‌ ofCalifornia,United‌States‌and ‌generates‌revenue‌by‌receiving‌commissions‌from‌every‌singlebooking.‌During‌the ‌past ‌few ‌years,‌the ‌company’s‌has ‌experienced‌amazing‌growth‌and ‌it ‌isprojecting‌total ‌revenue‌of‌3.5‌billion‌every‌year ‌by‌2020.‌Besides‌the ‌exponential‌growth‌of‌thecompany,‌it ‌is ‌facing‌several‌political‌as ‌well ‌as ‌legal ‌issues.‌While‌operating‌as ‌a‌peer-to-peeronline‌marketplace‌and ‌expanding‌in ‌the ‌worldwide‌market,‌Airbnb‌is ‌facing‌these‌issues.‌Still, ‌itputs ‌enjoying‌some‌benefits‌from‌the ‌environment‌and ‌cities‌that ‌led ‌it ‌to ‌provide‌cheapaccommodation‌facilities‌to ‌the ‌tourists‌and ‌guests.‌‌This ‌article‌is ‌drafted‌by‌applying‌PESTLE‌framework‌on‌Airbnb‌by‌identifying‌themacro‌ or ‌ external‌ forces‌ this ‌ company‌ faces‌ which‌ are ‌ uncontrollable.The ‌ aim ‌ ofPESTLEanalysis‌is ‌to ‌point‌out‌the ‌macro-environmental‌factors‌responsible‌for‌affectingacompany‌ by ‌ creating‌ a ‌ profound‌ influence‌ on ‌ the ‌ company’s‌ operational‌ and ‌ financialperformance.‌It‌is ‌a‌business‌analysis‌tool ‌and ‌the ‌letters‌of‌its ‌name‌stand‌for‌Political,Economic,‌Social,‌Technological,‌Environmental‌and ‌Legal‌respectively.H2: Analysis of PESTLE factors influencing AirbnbH3: Political factors influencing AirbnbPolitical‌factors‌that ‌are ‌responsible‌for‌affecting‌a‌company‌include‌a‌country’s‌laws ‌andregulations,‌political‌stability,‌taxation‌system‌and ‌more.‌Housing‌laws ‌of‌different‌countries‌arethe ‌ major‌ political‌ factor‌ that ‌ influences‌ Airbnb’s‌ business‌ operations‌ and ‌ it ‌ operates‌ byconsidering‌a‌uniquely‌designed‌business‌model‌which‌needs‌to ‌comply‌with ‌the ‌housing‌laws ‌ofthe ‌countries‌from‌where‌it ‌operates.‌It‌operates‌as ‌an ‌agent‌that ‌earns‌revenue‌by‌receivingcommissions.‌People‌use ‌to ‌offer ‌their ‌empty‌or‌spare‌rooms,‌apartments,‌or‌homes‌on‌rent ‌tooutsiders,‌tourists,‌and ‌visitors.While‌doing‌so, ‌the ‌company‌uses ‌to ‌face ‌some‌regulatory‌andlegal ‌issues.‌The ‌operation‌of‌Airbnb‌needs‌to ‌act ‌in ‌compliance‌with ‌the ‌prevailing‌housing‌lawof‌the ‌country‌from‌where‌it ‌operates‌and ‌this ‌is ‌the ‌main‌reason‌for‌which‌the ‌company‌faces
legal ‌issues.‌Airbnb’s‌business‌model‌uses ‌to ‌conflict‌with ‌the ‌housing‌regulations‌and ‌laws ‌ofmany‌states.‌For ‌instance,‌in ‌some‌locations,‌people‌who ‌rent ‌out‌their ‌property‌need ‌to ‌live ‌ontheir ‌property‌but‌many‌people‌use ‌to ‌purchase‌separate‌houses‌just ‌because‌of‌renting‌them‌forAirbnb’s‌rental‌services.‌This ‌activity‌clearly‌states‌the ‌violation‌of‌the ‌country’s‌housing‌laws.Many‌people‌who ‌use ‌to ‌rent ‌out‌their ‌spare‌rooms,‌or‌apartments,‌or‌homes‌do‌not‌follow‌thehousing‌laws ‌and ‌regulations‌of‌the ‌country‌which‌ultimately‌led ‌Airbnb‌to ‌face ‌legal ‌issues.The ‌company‌has ‌faced‌some‌court‌proceedings‌in ‌New ‌York,‌Barcelona,‌Florida,‌SanFrancisco,‌ Toronto,‌and ‌many‌ other‌ places‌ already‌because‌ of ‌ not‌ following‌ the ‌ housingregulations‌and ‌laws.‌The ‌rate ‌of‌tax ‌varies‌in ‌accordance‌with ‌the ‌taxation‌laws ‌and ‌regulationsof‌different‌countries‌and ‌states‌which‌led ‌the ‌company‌to ‌face ‌tax ‌related‌legal ‌issues‌that ‌mustbe‌coped‌up‌by‌Airbnb‌while‌operating‌its ‌regular‌operations‌in ‌those‌countries.‌Airbnb‌does ‌nothave ‌any ‌kind ‌of‌mechanism‌to ‌protect‌their ‌customers‌or‌guests‌in ‌conflict‌zones‌and ‌war.Airbnb‌requires‌to ‌address‌housing‌laws ‌and ‌follow‌housing‌guidelines‌of‌the ‌states‌whereneeded‌to ‌restrict‌court‌proceeding‌against‌it ‌in ‌the ‌coming‌future.‌Along‌with ‌this, ‌the ‌companyneeds‌to ‌adopt‌some‌protection‌mechanisms‌by‌keeping‌the ‌safety‌and ‌security‌of‌its ‌customersin ‌mind.H3: Economic factors influencing AirbnbAirbnb,‌Inc‌stands‌as ‌an ‌example‌of‌‘shared‌economy’‌and ‌not‌only ‌that; ‌the ‌company‌isleading‌in ‌the ‌industry‌belongs‌to ‌the ‌concept‌of‌the ‌shared‌economy‌(Mahajan,‌2018).‌Itprovides‌collaborative‌consumption‌by‌collaborating‌with ‌people‌who ‌prefer‌to ‌share‌theirproperty‌or‌resources‌with ‌outsiders‌those‌who ‌require‌it ‌for‌a‌short-term‌period.‌It‌helps‌peopleto ‌earn ‌money‌by‌utilising‌their ‌spare‌properties‌on‌rent ‌which‌ultimately‌improves‌the ‌economicconditions‌of‌those‌people.‌It‌considers‌two ‌aspects‌such ‌as ‌a‌particular‌source‌of‌income‌for‌thepeople‌who ‌use ‌to ‌rent ‌out‌their ‌space‌and ‌it ‌has ‌alreadyproven‌itself‌as ‌a‌tough‌competitor‌inindustry‌of‌hotel ‌by‌offeringhotels‌and ‌motelsat‌cheaper‌prices.This ‌is ‌the ‌reason‌why ‌it ‌has ‌grown‌a‌loyal‌customer‌base ‌around‌the ‌globe‌and ‌its ‌netincome‌reached‌$93‌million‌in ‌2017.‌Its ‌mobiles‌App ‌is ‌downloaded‌over ‌10‌million‌users.Currently,‌more‌than ‌9‌million‌people‌are ‌served‌by‌Airbnb.‌It‌offers‌jobs ‌to ‌the ‌‘hosts’‌(peoplewho ‌rent ‌out‌their ‌homes‌or‌spare‌rooms‌to ‌guests)‌in ‌the ‌cities‌which‌lack ‌motels‌or‌hotels.
Desklib Logo
You are reading a preview
Upload your documents to download or

Become a Desklib member to get access