LSC UoS BA Business Studies: Integrated Case Study - Airbnb

This report presents an integrated case study analysis of Airbnb, examining the challenges faced by the organization in achieving its goals, particularly in light of the COVID-19 pandemic. It discusses Airbnb's business model, including its customer value proposition, core values, value formation, and revenue model. The report also covers Airbnb's market segmentation, cost structure, and a SWOT analysis, highlighting the company's strengths, weaknesses, opportunities, and threats. Key problems identified include tensions with hosts, short-term losses due to the pandemic, misrepresentation of properties, and concerns related to urban inequality. The analysis considers various models and approaches to address these problems, offering recommendations for organizational growth and success. This assignment is available on Desklib, a platform providing study tools and resources for students.

Integrated case study
analysis

Executive summary
This report is on the basis of the analysation of integrated case study of an organisation
and to demonstrate different aspects of the respective report, case study of Airbnb has been
considered. In order to accomplish various aspects of existing report, problems which have been
faced by the organisation in the path of meeting organisational aspirations and goals will going
to be discussed. Along with it, there is a descriptive background of the organisation which is
taken into consideration for analysing its business operations. The current report also consist of
the challenges which are faced by Airbnb in the path of attaining set objectives and goals as well
as achieving growth. Different theories and frameworks will also get discussed in this report in
order to make an analysis of the various prospects. In addition to it, the existing positions that are
faced by Airbnb will also going to be taken into consideration. In addition to it, the solutions
which best fit the issues are also going to be discussed within the present report in the form of
recommendations provided to the respective company.

Table of Contents
Executive summary..........................................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY ..................................................................................................................................4
REFERENCES..............................................................................................................................12

INTRODUCTION
Case study refers to a research approach which is used to conduct deep investigation of
specific proceedings, multi-sided perceptive of the complex issues and problems within the
actual-life context. Analysis of the integrated case study gives sorting of occupational
capabilities and abilities along with exploring investigator's perceptions and skills on the potency
of this case study. Such type of case study consist of the all-embracing cases that provide
assistance to a researcher in throwing light on the various situational issues, marketing as well as
challenges (Arvanitidis and et.al., 2020). For conducting this kind of analysis, a reported is
needed to boost its verbal along with backhand communicating abilities through with conducting
various analysis of case. In the current report, a case study analysis will be described and for this
task case study of Airbnb will be considered for the purpose of demonstrating different aspects
of this case study analysis. In order to demonstrate different prospects of this report, the
difficulties faced by such company while accomplishing aspirations of the organisation will get
included and discussed in a more effective manner. In addition to it, the respective report also
covers background of the selected organisation in order to make an analysis of business
performance in a more successful way. In this existing report, the challenges faced by Airbnb
organisation within the path of growth achievement will also get listed. Different theories,
approaches or models will be used in order to analyse various aspects (Barnes and Kirshner,
2021). Beyond all such tasks, existing positions faced by this organisation will also be described
in this report. Along with it, the solutions to such positions will also be taken into account for
attaining organisational growth and success effectively.
MAIN BODY
Case brief: Description of the situation
In this existing report, the case study of Airbnb organisation is taken into consideration in
order to include various concepts of the report. As per the given case study, the pandemic
situation of COVID-19 has greatly impacted the operations of Airbnb in an adverse manner
(Chiny, Bencharef and Chihab, 2021). The government of the country in which the Airbnb is
operating its business has been issued travel restrictions in order to slow down the spread of virus
that has resulted global travel to fall precipitously. It is given in the study that the CEO of
company and its leadership team has initiated measures for addressing concerns of travellers as

well as minimise organisational cost structure for withstanding downturn and growing
uncertainty. Before the pandemic of COVID-19, Airbnb was on a growing path and it is also
revealed that the company had deranged the hospitality industry and became one of the most
valuable "unicorns" of the country. Within the case study, it has been given that the revenue of
the organisation has risen by 30% in the year 2019 to almost $5 billion (Dogru and et.al., 2020).
During year 2020, Airbnb has featured home as well as experience listings in over 1 million
cities in 200 countries with plans to go public later within the year. According to the case study
provided, respective company would have an infinite horizon, serve all of its stakeholders,
employees, guests, communities, hosts as well as shareholders and improve society. The
discussion within the Zoom meeting would invariably concentrate on how to balance needs of
organisation's different stakeholders and at same time ensuring it would sustain what appeared to
be worst economic problem within 100 years. As per the given case study, it has been observed
that the company has also faced challenges and there was emergence of backlash due to which
few hosts bore losses.
Problem statement, plan of analysis
Statement of the problems in the case:
Airbnb has faced several problems while accomplishing goals of the organisation along
with achieving business growth as well as success (Huang, Coghlan and Jin, 2020). Statement of
problems that are covered within the existing case study of respective organisation are listed as
under:
1. The business model of the company, escalated tensions with many hosts as well as
devastated top line have clobbered because of the pandemic situation of COVID-19 as
there was damage of the houses of hosts by the guests.
2. Another problem statement in context to Airbnb is that the organisation has faced short-
term losses because of the respective epidemic.
3. Some of the guests reported problems related to misrepresentation of the rental properties
on the website to physical assaults.
4. The other problem identified from the given case study is that there were some people
who have complained that it was difficult to identify long-term rentals within many cities
because of the short-term rentals.

5. There was also a problem related to rising urban inequality as well as gentrification due
to which various cities tried to restrain the activities and growth of Airbnb in the starting
of the year 2015.
All these are the problem statements which are faced by Airbnb at time of attaining its
business objectives and growth.
Proposed plan of analysis
In this section, there will be a discussion as well as evaluation of the various models or
the approaches in context to Airbnb in order to address the problems that are faced by the
company (Lalicic and et.al., 2021). Therefore, first of all effective business model will be
explained in relation to Airbnb for the purpose of examining whether the organisation is or will
be valuable as well as viable. The business model of Airbnb is given as follows: Customer and Value Proposition: Airbnb is based on community, two-way online area
that helps travelers book private accommodations. On one hand, it enables managers to
list their location along with earning rental money, making it easier for travelers to rent
private homes. Wide coverage of company enables the visitors to rent personal locations
throughout world. Personal and rating profiles along with a system of reviews give the
host as well data about an offer, while the hosts themselves can choose who to rent their
space to. Core Values and Mission: The company is considered to be more than an affordable
option of travel accommodation. Through supporting access to different locations as well
as local culture, Airbnb aims to help travelers go anywhere around the world by
developing interactions with local hosts, gaining access to the different places and to
allow culture of their destinations. Core activities and Value formation: Organisation performs a dealing supporter between
travellers as well as hosts who seek for cozy accommodation at inexpensive rates (Lee
and Kim, 2019). Through giving insurance on host protection, rating and reviewing
systems, the level develops trust in community of lowers as well as users cost of
transaction. User and profile reviews facilitate to develop reputation and trust between
people of marketplace. Organisation: Airbnb focuses on building a sense of belonging as well as engaging its
community by story-sharing on its website and inviting users to be part of its logo

redesign campaign. The company also interacts with the local community beyond the
virtual space, through partnerships with city officials in San Francisco and Portland, in
identifying hosts to facilitate displaced people in the event of an emergency.
Revenue Model
Airbnb's revenue model includes a fee that is charged to hosts as well as passengers,
which is somewhat in line with the Postmates revenue model (Leak, Eklund & Kivedal, 2020).
Postmates also earn through fees. The company's revenue model runs on the basis of listing and
stay. The organization provides a platform where such listings and bookings are generated and in
this way the company earns money. The organization's revenue comes from two major sources
which include commissions from hosts and transaction fees from travelers. Airbnb receives
commission on each booking from two major sources, namely guests and hosts. For each
booking, the company charges guests 6-12% of the booking fee. Additionally, the organization
charges the host a 3% fee for each successful transaction.
Airbnb Market Segmentation
The market segmentation refers to a marketing strategy within which the chosen groups
of the consumers are recognised so that certain products as well as services of an organisation
can be presented to them in such a way that appeals to their interests. The market segmentation
of Airbnb is given as below:
 Hosts: These are the people who are needed to position space places of them on website
of the company which in case, if get booked, will provide rent of host in exchange of it.
Hosts possess autonomy to reject or accept travellers through seeking feedbacks from
other hosts (Majumdar and Adhikari, 2020). They can also list their property with the
amenities offered along with rent, check-in and check-out times.
 Travellers: These stakeholders book space of living on rent from hosts and possess
alternative for filtering search according to their wants as well as needs. Travellers can
fix range of amount of rent, elementary facilities they will require along with guests
number. They also can set through paying online amount and is considered as the most
troubled free-booking. Photographers: The organisation hires such photographers who are doing freelancing
for the purpose of clicking high-level pictures of property as well as the best quality
pictures within which most of the bookings are paid through Airbnb.

Cost Structure of Airbnb
Airbnb cost structure has three major costs included in it and these consist of:
 Technological setup as well as cost of running business: Cost which occurred in
setting technology for running organisation like servers, website, etc. are to be paid
through Airbnb (Oskam, 2022). Additionally, the company is required to make payment
of the running business cost like bills of electricity and various small rents.
 Permanent employees salary: An individual who works within the physical location of
Airbnb is needed to be paid a salary amount on the monthly basis including another
amounts in the form of salary.
 Freelance photographers' Payment: The company has hired freelance photographers to
click better quality picture for the website. For such service, Airbnb has to pay a fixed
amount to the photographers.
An assessment of the current positions faced by Airbnb
This section covers analysis of internal business environment of the organisation which
includes the factors that are strengths and weaknesses of the company as well as having external
opportunities and threats associated with business environment (Presenza, Panniello and Messeni
Petruzzelli, 2021). The SWOT Analysis of Airbnb is explained as below:
Strengths Weaknesses
 The organisation is well-long-familiar
brand throughout world and therefore
considered as the precious asset for
such company. Related brand
popularity is invaluable within the
competitive travel industry because the
company's online search popularity
surpasses all competing brands.
 Another strength of the respective
company is that It is considered a
cheaper alternative to other hotels as
well as resorts. Prices for services can
 The major weakness of Airbnb is that
because of the pandemic situation of
COVID-19, almost nations are on
economic lockdown that has put a stop
to the business of Airbnb due to the
regulations as well as rules within local
areas. In addition to it, the people are
also afraid to come out of their houses
because of the novel coronavirus.
 Another major weakness of Airbnb is
that the company is available almost
everywhere but there is no quality

be competitive depending on people's
location (Scerri and Presbury, 2020).
The customers of the company can
purchase throughout the world and
select the location which suits their
budget.
 It is also a major strength for Airbnb
that the community of the company is
considered as the precious asset.
Experience of the organisation is its
personal touch of hosts as well as
interaction with them facilitates the
guests in engaging with community of
the respective company. This also
provides customers rewards as well as
special offers.
control standard which creates
problems like cleanliness as well as less
comfort. Bad hosts can damage a
company's reputation. If a host does not
follow the guidelines of the company
then he may have to face the
consequences. The backlash, along with
poor ratings on social media, affected
the company's profits in the current
business world.
 This is another weakness of Airbnb that
it has a review system in which the
guests as well as hosts of the company
can rate one another after their stay.
However, both the guests as well as
hosts are unable to view their reviews
at the time when they have given
reviews.
Opportunities Threats
 The greatest opportunity available to
Airbnb is recovery from the impact of
pandemic situation of COVID-19.
Since the world is recovering from the
respective epidemic, the opportunities
within the travel industry will get
enhance within the upcoming time. As
customers want to leave the house as
well as freshen their minds then in this
case, travelling would be a great
opportunity.
 Decrease in the travel demand is
considered as a major threat to the
company. Because of the pandemic
situation of COVID-19 worldwide, the
entire travel industry is suffering and so
the company (Tajeddini and et.al.,
2021). Due to the economic lockdown,
the purchasing power of the customers
has reduced and it has influenced travel
demand in a negative way.
 Another threat to Airbnb is that the

 Another greatest opportunity to Airbnb
is that company with its brand
investment can take entry into another
segments like travel guides, car rentals,
advertisements and many more in order
to keep up its at its peak.
 Airbnb can also get opportunity to
enhance innovation through making the
platform more appealing as well as can
improve involvement for both guests as
well as hosts (Tseng and Chan, 2019).
As the use of mobile applications get
increased, the respective company has
evolved with a mobile application
which will provide assistance to the
guests and hosts in order to get
interacted in a very easy manner.
company makes efforts to become a
strong player within the process of
attracting guests as well as hosts. Some
of the hosts can take decision to make
use of some players as well as often
cross-list their providings. The
respective company has been facing
tough competition within some of its
sectors within some areas through
companies such as HomeAway,
Trivago and many more.
Proposed solution to problem
The solution to the above discussed problems can be taken from the discussion of the
report in context to Airbnb which are given as below:s
1. The host of the house can overcome with these damages by many ways they can gather
the evidence of the damages(photos, videos), host can file an Air cover request through
resolution centre within 14 days of guest's checkout. After the host submit the Aircover
request the guest have to pay them before 24 hours but in the case of client declined the
full payment or don't respond then host can involve in Airbnb support then the guest
payment method on file may be charged to cover up the damages, and host need to keep
in mind to involve in Airbnb Support it should be done within 30 days of the damage.
2. Airbnb faced short time losses in the first time they lost nearly $4.6 billion. They offered
customers the chances of working from another place other than office and home. They
offered place which are on less crowed place like beach and mountains but people are not

interested in their offers and company lost huge revenue but in second quarter after the
two years of pandemic they get jump in the bookings and revenue rises nearly 70% from
previous year. People started showing interest in the company and advance booking
started and it seems a high demand for summer bookings and beyond.
3. The customer showed negative reviews on the misrepresentation of rental properties and
in the starting only customers gained negative experience of trust with Airbnb. Nearly
they got 2733 online reviews and from which 216 where negative reviews. The customers
faced many problems in Airbnb (Türk and et.al., 2021). So the company should invest
addition resources to reduce the negative experiences of customers by focusing on
maintaining the quality in its service and maintaining trust based relationship. They
should address customers complaints with prompting apologies, willingness and positive
actions and with willingness they should compensate these customers.
4. Customers are facing trust issues and it was accounted as a major issue in which hosts
along with travellers have faced at time of using Airbnb. In relation to Hosts, this was a
questioning stage for providing their house to strangers for the purpose of their living and
travellers had felt same regarding place sharing with strangers. But, the company
possessed a confirmation procedure that has confirmed both travellers and hosts. The
company had also summed up attributes for travellers as well as hosts in order to connect
their social media profile to such platform for higher quality.
5. For any sort of business, it is quite essential to maintain strategies as the existing
customers contribute immensely to the growth of the business. Offers, discounts, credits,
etc. for travelers have been added to the Airbnb business plan from time to time to make
passenger retention effective. Since the launch of Airbnb, it has only seen decent growth.
But good growth in itself brings competition. Many websites have fully prepared Airbnb
business plans and their cost creation. Even though Airbnb has become a well-known
brand now, they are constantly working on Airbnb market strategy to differentiate
themselves from others.

REFERENCES
Books and Journals
Arvanitidis and et.al., 2020. Trust in peers or in the institution? A decomposition analysis of
Airbnb listings’ pricing. Current Issues in Tourism, pp.1-18.
Barnes, S. J. and Kirshner, S. N., 2021. Understanding the impact of host facial characteristics on
Airbnb pricing: Integrating facial image analytics into tourism research. Tourism
Management, 83, p.104235.
Chiny, M., Bencharef, O. and Chihab, Y., 2021, May. Towards a Machine Learning and
Datamining approach to identify customer satisfaction factors on Airbnb. In 2021 7th
International Conference on Optimization and Applications (ICOA) (pp. 1-5). IEEE.
Dogru and et.al., 2020. Investigating the whole picture: Comparing the effects of Airbnb supply
and hotel supply on hotel performance across the United States. Tourism
Management, 79, p.104094.
Huang, D., Coghlan, A. and Jin, X., 2020. Understanding the drivers of Airbnb
discontinuance. Annals of Tourism Research, 80, p.102798.
Lalicic and et.al., 2021. Destination image analytics for tourism design: An approach through
Airbnb reviews. Annals of Tourism Research, 86, p.103100.
Lee, K. H. and Kim, D., 2019. A peer-to-peer (P2P) platform business model: The case of
Airbnb. Service Business, 13(4), pp.647-669.
Leick, B., Eklund, M. A. and Kivedal, B. K., 2020. Digital entrepreneurs in the sharing
economy: A case study on Airbnb and regional economic development in Norway. In The
Impact of the Sharing Economy on Business and Society (pp. 69-88). Routledge.
Majumdar, A. and Adhikari, A., 2020. An integrated TOPSIS-MOORA-based performance
evaluation methodology for the key service providers in sharing economy: case of Airbnb
superhosts. Benchmarking: An International Journal.
Oskam, J., 2022. Understanding the Airbnb Community and its Community Impact: the Use of
Scenarios to Build Resilience. In Peer-to-peer Accommodation and Community
Resilience: Implications for Sustainable Development (pp. 133-144). GB: CABI.
Presenza, A., Panniello, U. and Messeni Petruzzelli, A., 2021. Tourism multi sided platforms‐
and the social innovation trajectory: The case of Airbnb. Creativity and Innovation
Management, 30(1), pp.47-62.
Scerri, M. A. and Presbury, R., 2020. Airbnb Superhosts' talk in commercial homes. Annals of
Tourism Research, 80, p.102827.
Tajeddini and et.al., 2021. Exploring the visitors' decision-making process for Airbnb and hotel
accommodations using value-attitude-behavior and theory of planned
behavior. International Journal of Hospitality Management, 96, p.102950.
Tseng, Y. C. and Chan, C. L., 2019. When the sharing economy meets established institutions:
Uber and Airbnb in Taiwan. IEEE Transactions on Engineering Management, 68(6),
pp.1895-1906.
Türk and et.al., 2021. The path of least resistance explaining tourist mobility patterns in
destination areas using Airbnb data. Journal of Transport Geography, 94, p.103130.