Disruptive Innovation in Hospitality: A Case Study of Airbnb

Foundations of Information
Systems

Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
Company overview......................................................................................................................3
Airbnb as the disruptive innovation.............................................................................................3
Critical analysis of Airbnb...........................................................................................................4
Future growth...............................................................................................................................4
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................4

INTRODUCTION
Disruptive innovation refers to the creation of new markets and value network which
eventually disrupt the existing markets by displacing significant market leading firms, product
and alliances (Guttentag. & Smith, (2017)). Airbnb is the classic example of the disruptive
innovative which serves the low value customer. This report will provide deeper insight about In
disruptive innovation in the hospitality sector with regards to Airbnb.
TASK
Company overview
Airbnb founded in 2008 through the means of online facilities by providing the hospitality
and rental services. The company provides customers with the host different apartments homes,
cottages on choice through its sites (Dogru, Mody & Suess (2019)). On the other hand, the firm
do not have own houses but it acts as broker taking the commissions on every house rented. On
the other hand, the company is majorly focussing on low value customers. As the part of
innovation, the renter can have selection of different homes and apartments on the basis of
location and budget
Airbnb as the disruptive innovation
Airbnb is giving high level of competitions to indigenous hotels operating in hospitality
industry. Meanwhile, existing hotels are not able to cope with competitions given by Airbnb. In
addition to this, indigenous hotels are not able match with the disruptive innovation of Airbnb.
The firm have incorporated the lot of modern internet technologies in day to day operations
which leads to the cost saving, local experiences as well as household facilities (Zach, Nicolau &
Sharma, (2020). This is the beneficial option for the renters with the new market where the host
have usage technological infrastructure of the Airbnb. The firm is promoting more level of home,
cottages and apartments in an effectual way. The company is focusing more on implementing
disruptive innovation aspects for the payment collection by using the cloud-based platform.
The company have gained highly competitive advantages by offering cost effectual
services to the customers over others (Koh, & King (2017)).Further, by doing assessment it has
identified that nearly two third of Airbnb guest are using the services against the traditional hotel
attributes. The firm is generally expected to outperform as budget hotel /motels and
underperformers upscale hotels.
3