International Tourism and Hospitality Management

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AIRBNB CASE STUDYAlina ShutovaAnna LeibinaTHM 121: International Tourism and Hospitality ManagementProf. Ariel Castillo23th of October, 2020
2Airbnb is an online marketplace where travellers get to stay at the property listed onthe site by the local hosts and was born out of necessity.It is a community built on sharingand started in 2007 as an original idea by two friends who had trouble paying huge rents andhad spare rooms. They got a mattress and started selling it offline as rental space. Later theyalso began to provide breakfast and that is how Airbedandbreakfast, later Airbnb, was born.Over time the project got transformed and shaped so we have got the chance to get to knowthis phenomenon. Despite its growing popularity and opportunities, there are some troublingissues that the company needed to attend and faced with in order to improve its functionality.The case study will help us to navigate and identify the core problems, its symptoms as wellas trace outcomes and solutions that were implemented.The first problem that has been detected is that Airbnb can't control neither supply nordemand. For instance, the company cannot guarantee the quality of the service such as thequality of the stay that is offered by the hosts and be responsible for the behaviour of theguests. In 2011, for example, one of the hosts got robbed by an Airbnb user. This terrifyingsituation reflected in the company's reputation since the name of the company started toappear in some shameful headlines of the famous newspapers and on Tv. That forced Airbnbto implement several measures such as a “host guarantee” offering the protection ofproperties, a 24-hour hotline, the doubling of staff of the Airbnb Help Center, in order torecover the trust of the customers and in the end to control somehow supply and demand.Another problem that obstructs the company's development relates to legal issues, inparticular - legal unclarity. Thus, the action of Airbnb is not regulated properly in the currentlegislation on renting and subletting properties which impedes the expansion of the platform.The evidence of this problem is the fact that in some places the process of renting theproperty via Airbnb is controlled or even prohibited. For instance, in New York exists the lawthat bans the landlords from letting or subletting real estate for less than 30 days except for
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