Airbnb Business Strategies and Challenges

This assignment examines Airbnb's business model, strategies for attracting customers and travelers, and the challenges it faces in a competitive market. It delves into topics like niche marketing, revenue management, and the influence of policies on its operations. The analysis also considers potential expansions into new business areas to increase market reach.

Tourism industry
Airbnb

Introduction
Tourism 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 adapt
their 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

raised with various cultures and are shown diverse abilities of conduct. It is an essential kind
of division for Airbnb.
Demographic
This 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.
Psychographic
The 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 distribution
cost 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 and
then determining which products and services of Airbnb can offer a higher profit margin.

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.

Future plans of marketing and practices of Airbnb:
Marketing practices which can be adopted by Airbnb:
City host listing: The City Hosts beta is Airbnb for days out, permitting travellers to get a
fresh feel for some hours in their destination city by doing their hobby exercises like running,
fishing and many more (Osterwalder, et al., 2014).
The floating house:
In relation to popularity, the rivalry (winning a vacation in the floating house) brought 73,500
people to the Airbnb site; more than 20000 of them were fresh to Airbnb.
Neighbourhood guides: There are 23 neighborhood guides curated via Airbnb, for the biggest
conurbations where Airbnb has multiplied. All are extensive. There is much to adore about
these aides, with Airbnb's indomitable manner of speaking ringing all through. Airbnb should
explore out more to this are in order to success in future.
Live there campaign:
2016 has seen Airbnb additionally build up its image recommendation, established in travel,
groups, individuals, and encounters. The Live their campaign can aggregate this up
splendidly, standing out the Airbnb encounter from more customary, more inauthentic travel.
Design of App: The application was overhauled for the Live There battle dispatch. It now
offers a more customized understanding, with Airbnb enhancing its coordinating calculations
to give clients the correct data and postings. However, it can become a straightforward plan
which will attract the most of the travellers (Minghetti & Buhalis, 2010).
Social media presence
Social media has turned into a close necessity for most buyer challenging organizations like
Airbnb. Facebook, Twitter, Instagram and numerous different stages are turning into a bigger

and bigger piece of our everyday lives. Cooperating with potential explorers in these spots by
Airbnb is a powerful approach to assemble a noticeable brand and create goodwill. Making a
group of these web-based social networking stages can be genuinely reasonable yet at the
same time give a gathering of supporters that will see customary informing from the page.
Producing matter to keep profiles dynamic is commonly the most time-consuming work of
social media, however in the event that there is as of now unique services and products being
created for the site, it can be effectively reformatted for web-based social networking.
Website: Clearly, the plan and appearance of a site are essential elements. Visual components
of the site should coordinate that of the Airbnb brand and prompt a positive ordeal for
focused clients (Planing, 2015). Substance and web page highlights are the other portion of
the advertisement. Site guests will probably be hoping to discover certain data about the goal
and what they can hope to see there while going by. They may likewise be searching for
approaches to book housing or stimulation while they are going to. A major piece of tourism
business through Airbnb is getting "heads in beds," which implies inspiring guests to remain
in lodgings and visit eateries that are a piece of the tourism association. Regardless of
whether it's reserving a room or reserving a spot for a movement, the site should make these
sorts of highlights and substance simple to discover and utilize.
Social content: The objective of a digital presence is to be a one-stop asset for individuals
inspired by venturing out to the territory. Hooking potential voyagers with attractions and
exercises was the initial step taken by Airbnb. In any case, those endeavours are trailed by
furnishing them with the suitable data to design a total excursion (Hung, Shang & Wang,
2010). Making enlightening and connecting with unique substance is the best approach to
fulfill this and adopted by Airbnb. Blog entries, recordings, info-graphics, and different
perceptions are for the most part cases of the unique substance that can be utilized to make
assets for guests which are practiced by Airbnb.

Blog: In the tourism business, blogging is one of the significant tricks which enable to tell a
travellers story to another traveller (Song, et al., 2012). This helps Airbnb to engage
customers as well in brand and advertising. Blogs are the necessary vehicle acting as the
mediator between customers and company.
Email marketing: Extraordinary email advertising efforts don't simply happen. It requires a
ton of technique, arranging and testing to think of simply the correct blend that works for
Airbnb Company. Furthermore, it requires an email methodology to help it. Having set up an
email advertising procedure won't just enable the company to send offers on time, yet will
likewise enable Airbnb to adjust their substance to the correct gathering of people and show
signs of improvement which comes because of your email campaigns (Peppers & Rogers,
2016).
Google display advertising: Sometimes companies fail to recall that apart from high standing
in Google SERPs, the public still needs to be visually motivated for a superior click-through
frequency (Kiráľová & Pavlíčeka, 2015). Airbnb selected to participate in Google display
advertising with poster and banner ad campaigns comprising of pictures from real housing
offered to customers during their stays. This permitted Airbnb to appeal worldwide traffic
and growth their programmes intensely.
Craigslist: Airbnb acknowledged they expected to coordinate with two computerized
marketing giants to get enough clients (Lehr, 2015). Clearly, Google is the place to be for any
web-based business site, yet Craig's List can be utilized for get-away rentals, particularly for
a shared business. This vital move enabled Airbnb to get the hosts and customers important to
give them a decent head begin in their market. Since individuals were at that point utilizing
Craig's List to post advertisements for here and now lodging, Airbnb chose to give

individuals a chance to have the chance to share their Airbnb posts on Craig's List too,
driving more movement to both the client's posting and its website.
Recommending new or innovative idea
New marketing strategy:
By means of social influencers as a way of promotion for hospitality and tourism
organizations is becoming further popular for a number of reason.
Influencers are individuals which has developed a relationship or following around their own
online brand. For instance, think bloggers, YouTube bloggers, Instagram live story and many
more. Numerous influencers are having the large followings and an extremely engaged
viewer (Rauch, 2014). They have been making content for a particular specialty for quite a
while and their gathering of people is constantly cheerful and even anxious to see more from
them. This can help Airbnb to influence all its travellers more and give them more facilities
and offers for following the Airbnb.
Travels and tourism related business idea that Airbnb can consider for expanding its business
is luggage delivery services. Luggage delivery business is tied in with helping explorers to
maintain a strategic distance from the hassles of possessions roundabout holding up and
security checks. Indeed baggage conveyance administrations go the additional mile to give
gear to their clients. All the client need to do is simply to pack their voyaging garments and
all other things that they are carrying with the baggage. Airbnb as the baggage Delivery
Company can take and store the gear for their sake (Clemons, Nunes & Reilly, 2010). They
likewise help in encoding the contents online with the goal that the proprietor can refresh its
content against another trip. Baggage conveyance benefit is where a tourist luggage or sports
is geared from travellers and conveyed to lodging, resort or some other physical address.
Gear remittances are diminishing and abundance baggage expenses expanding. A few

voyagers can't physically deal with their gear, specifically some senior explorers and
explorers with incapacities. Thus Airbnb can grab this opportunity and can expand its
business operations in luggage delivery.
Following are the area in which Airbnb can improve:
Giving support agents own email address:
A common email address like [e-mail] for all the queries and support should be
changed to multiple addresses. As this is causing customer great chaos to get support on time.
Distributing email address or creating email support of agents can help Airbnb to sort these
queries and create faster support to customers and travellers (Mody, Suess & Dogru, 2017).
Issuing temporary funds: When a client requests their cash back, similar to Visa organizations
do. Regardless of how you turn it, Airbnb is basically an agent benefitting off of exchanges
amongst host and visitor, much the same as a Mastercard organization goes about as the
mediator between a vendor and client for an exchange. Temporary discounts, pending a
question examination following the model of Visa organizations gives clients some bit of
brain (Tsai & Chen, 2011). It's the slightest Airbnb can do as an organization when taking a
cut of each transaction.
Conclusion:
From the above report it has been analysed that as Airbnb is performing very good in tourism
industry. It is providing its travellers very convenient and low fares for its services and
packages. It considers various pricing factors for deciding prices for its services. It is having
various customer segments as well where its current business operation is running
successfully. Airbnb is adopting various marketing strategies to attract customers and
travellers. It can adopt various new strategies as well to enhance its market image amongst
the mind of customers. The Airbnb can improve over its some of the area where it is

weakening due to its policies. It can expand to some new business operation as well to
increase its business to new market.
References
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