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Airbnb Business Strategies and Challenges

   

Added on  2020-04-07

11 Pages2896 Words55 Views
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Tourism industryAirbnb
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IntroductionTourism is a vibrant and competitive business which demands and needs the capability to adapt to regularly to customers diverse and new desires. The two elements namely direct and indirect play an important role in tourism industry. Direct elements include those areas of industry which are in direct contact with travellers Sales, lodging, conveyance, activities, attractions, and auxiliary services. Indirect components of the Tourism Industry are frequently called support divisions. Those parts of the tourism business which may not come into coordinate contact with travellers, but rather without whatever is left of the business couldn't work. They incorporate foundation, roads, aerodromes, public services, community, public lavatories, symbols, industrial, construction Industry, power, water supply, sewerage and pollutants transfer. Current business operation: Airbnb was founded in August 2008 in San Francisco, California. Airbnb is confidential group commercial centre for individuals to list, find, and reserve incomparable services all over the world; it can be through the web or through a cell phone or tablet (Ryan, 2016). Regardless of a loft for a night, a hall for seven days, or an estate for 30days, Airbnb interfaces persons to one of a kind tourism meeting, at all value point in more than 65 thousand urban zones and 191 nations. Airbnb is the demanding route for individuals to adapttheir supplementary space and grandstand it to a crowd of individuals of millions. Customer segments of Airbnb:Geographic The geographic market division is finished considering the elements, for instance, visitors' place of the starting point. This factor is vital as the travellers had with better places are
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raised with various cultures and are shown diverse abilities of conduct. It is an essential kind of division for Airbnb. DemographicThis division is completed by considering the visitor's gender, age, status, ethnicity, occupation, religion, wage, instruction, and relatives (Zervas, Proserpio & Byers, 2014). This is also important forAirbnb to consider its customer choices and demand. PsychographicThe individuals in this division is considered by tourist agent after checking concentration of the tourists. They accumulate data about the travellers’ advantages, states of mind, their method for living, sentiments, and general identity (Guttentag, 2015).Pricing models which Airbnb can adopt: In defining the price of Airbnb products, it should consider various operating cost distributioncost and margin. Operating cost: It includes both variables as well as fixed costs. Variable cost: These are the cost for Airbnb which vary directly with the output. This cost also increases at a fixed rate relative to cost and labour. For instance: wages, gas, electricity charges, cleaning expenses, bank fee and much more (Forgacs & Dimanche, 2016). Fixed cost: These costs are not dependent on output. These remain constant regardless of the level of revenue. This includes mainly rent, buildings, machinery and much more possessed by Airbnb. Profit margin: It is significant to evaluate what other competitors of Airbnb are proposing andthen determining which products and services of Airbnb can offer a higher profit margin.
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Distribution network cost: The distribution network comprises of travel representatives, national and abroad retailers and inbound tourism operators (ITOs). Airbnb distribution network assists all distribution networks in providing services and raising profile to consumers.
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