Airbnb During COVID-19: Challenges, Analysis and Recommendations

This case study examines the challenges faced by Airbnb during the COVID-19 pandemic, focusing on the impact of travel restrictions and the company's response strategies. It identifies key issues such as declining customer engagement, financial strain, service quality concerns, and internal management challenges. The report includes a PESTLE analysis to assess the external factors influencing Airbnb's operations, highlighting political, economic, social, technological, environmental, and legal considerations. The study also addresses specific problems such as delivering quality customer service, employee satisfaction, maintaining hygiene standards, and improving financial stability. The analysis concludes with recommendations and an action plan aimed at mitigating the impact of the pandemic and enhancing Airbnb's long-term sustainability and stakeholder value.

Integrated Case Study
Analysis

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK ..............................................................................................................................................3
Challenges of Airbnb .............................................................................................................3
Research Aims .......................................................................................................................5
Research Objectives ..............................................................................................................5
Research Questions ...............................................................................................................5
PESTLE Analysis ..................................................................................................................5
Case Brief...............................................................................................................................6
Recommendation ...................................................................................................................9
Action Plan ............................................................................................................................9
Justification ..........................................................................................................................10
Research Limitation .............................................................................................................10
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Pandemic have affected almost every business industry and creates challenges to operate
business operations. Many business enterprise have to shut their business due to lack of working
capital. In case of hospitality industry, it have affected drastically as government have restricted
to travel within or outside country (Syriopoulos, 2020). It is needed to introduce new policies,
upgrade technology and to formulate effective strategy in order to minimise its impact. People
cannot travel as which lead to many traditional business to end up their operations. Public
gathering and public functions are prohibited and many businesses are still trying to recover from
its impact. This report is based on Airbnb, an American multinational company which offers
vacation rentals for stay. It was incorporated in 2008 by Brian Chesky. This report will cover
various challenges faced by company because of pandemic as well as its recommendation for
solving issues.
TASK
COVID-19 have created complexities in operating business enterprises. It have adversely
affected its functioning. It is needed to frame effective strategies so that company can overcome
with issue and can minimise bits impact. There are many challenges by almost every business
during pandemic and it is important to take corrective measures so that it can take advantage of it
and make company more productive and efficient (Aigbedo, 2021). It will lead to higher
profitability and company can attain its goals effectively and efficiently. It has been analysed that
inflation rates have been hiked for about 10-15% along with increased cost of manufacturing and
administrative cost. It gives a drastic shock to whole economy. Many business are n ear to
closure and many of them closed during pandemic. It have also affected livelihood of human
beings.
Challenges of Airbnb
There are any companies which have affected during pandemic due to restriction in tour and
travelling. It becomes difficult to engage with customers and leads to bring down profitability.
For Airbnb, it becomes difficult to recover its fixed cost and suffers loss due to unavailability of
customers. The challenges for Airbnb are discussed below.

 The company cannot engage with its customers and loosing its customers too.
 It becomes difficult to recover its fixed cost such as rent and staff salary, electricity and
other bills.
 It faces poor management and lacks in various keys areas which needs to be improved.
Along with all above challenges the major challenges which company is facing is poor quality
service that customer were facing. Sometimes it do not meet minimum expectation of customer
and on company's website it do not have complete information which creates dilemma in
choosing their services. Negative customer reviews declines reputation of company and people
do not opt their services (Clark, Mauck and Pruitt, 2021). It creates barrier in attracting potential
customers towards company.
 The employees of company do not feel valued in company and do not contribute efforts
towards accomplishment of goals. They do not have motivation and do not work with
peak potential. It can be due to improper formulation of strategic planning.
 The financial position of company is not good as its financial statements do not reflect
profit and by this investors and stakeholders cannot trust company. The financial
planning of company is not up to mark and it becomes complex to gain trust. Rigid rules
and regulation of company makes it difficult to attract investors.
 The management strategies of company are not drafted properly as company is not using
its resources optimally and not generating higher profit. It is important to use resources
optimally which yields higher profit. Allocation of resources is one of the major
challenge that company faces. Its strategies are not streamlined along with company's
objectives and goals.
 The communication barrier creates complexities in success of organisation as employees
may misunderstood message by which company may suffer loss. So it is needed to have
effective communication process in order to convey message to both internal and external
stakeholders. It helps them in getting clarity about their roles and responsibilities which
they have to do in order to attain personal and organisational goals (Park, and Jones
2021).
 The rooms that company is offering are not maintained properly and unhygienic. It leads
to customer dissatisfaction and they can cancel their booking too. So it is important to
keep rooms clean and tidy.

Research Aims
The main aim of this report is to identify cause which creates barrier in path of success. It will
undertake an extensive research along with solution in order to eliminate issue and to minimise
impact of pandemic.
Research Objectives
 To frame management strategy which will direct company towards attainment of goals.
 To analyse root cause along with finding correct solution in order to resolve issues which
company is facing.
 To elevate fame of company so that it can attract larger customer base.
Research Questions
 To how much level of extent does company suffered loss during pandemic ?
 Why service quality of Airbnb is declining?
 What are the steps that should be taken and implemented to minimise impact of COVID-
19?
PESTLE Analysis
PESTLE Analysis can be understood as a strategic framework which is used by
organisational managers to assess internal as well as external forces that can impact on their
operations in a significant manner (Hahang, Bayraktar and Jiménez, 2022). All the factors of
PESLTE analysis in accordance with presented case study of Airbnb are as follows:
 Political factors- In UK, political landscape is stable which help organisations to
formulate their strategies in an efficient manner. In accordance with Airbnb, political
landscape can be an opportunity for them which provides scope to frame and execute
strategies.
 Economic factors- In UK, global pandemic had created massive issues in terms
of operating and generating profits for the organisations in a large number. In context to
Airbnb, they also face issues as travellers are afraid to travel due to corona pademic as
well as strict guidelines. It has impacted their operations in a significant manner.

 Social factors- In UK, people are indulgence in their approach which led them to
make plans for travelling on a constant basis. This can be an opportunity for Airbnb as
they can cater diverse needs of travellers while following corona guidelines in a strategic
manner.
 Technological factors- UK is considered as a leading nation which supports
technological advancements in an exponential manner. Managers of Airbnb have
introduced effective marketing strategies with the help of digital technology in order to
make their reach to varied travellers.
 Environmental factors- In relevance with UK, government is very strict with
execution of their environmental laws in regards with organisations. Managers of Airbnb
have follow all the environmental regulations and has adopted sustainable practices
which help them to make their position viable in market.
 Legal factors- UK government has framed varied legislations for protecting the
right and interests of employees as well as customers which needs to be followed by
organisational managers. Managers of Airbnb have made compliance with the legal laws
while operating their tasks which led them to avoid expensive litigation process.
Case Brief
This case study is based on Airbnb, an American company which offers vacation rentals to
tourist for homestay. It was formed by two college friends Chesky and Gebbi. The purpose to
establish this company because it becomes complex to survive due to lack of money. This
concept of providing rental properties comes in mind of Gebbi with a thought of providing
mattresses to customers. In the starting days of company's incorporation, they have launched
their website airbedandbreakfast.com. As they do not have relevant knowledge of maintaining
websites and needs a tech expert who have knowledge of website maintenance. They have
decided to take one of their friend into their company who can elevate their business and can
maintain their website traffic along with making payment gateway process smoother. They have
invested $60000 in form of sequoia capital. They have contributed their best efforts in gaining
customer's trust by opting reputed payment merchant gateway so that they can engage with more
and more customers. They have successfully gained customer's trust and now they wanted to
expand their business internationally so that they can capture new market and generate more

profit. But due to pandemic they have suffered loss and in order to save cost they have lowered
down quality of services. In addition to that, it have suffered loss by destruction of property by
various visitors. They have faced various critics because of poor quality of services. As tour and
travelling is restricted and it have affected operations of Airbnb. Many business enterprises of
hospitality industry have to forcefully shut their business due to lack of funds and working
capital. It have affected hospitality industry adversely as no social gathering is allowed in hotels,
restaurants and cafe. So it is important to take corrective actions in order to solve issue and
minimise impact of pandemic. It have lowered down its rental charges as well as rendered better
quality services. Company have opted digital technology for conducting virtual meetings on
Zoom and google meets for purpose of decision making which can enhance company's
performance.
Problem 1
Main issue which is faced by managers of Airbnb is to provide better service and
experience to their customers. People are willing to get excellent services in exchange of a
reasonable amount. It is imperative for managers of Airbnb to provide them better services
which led them to make them post positive reviews in regards with Airbnb. Customer
satisfaction is considered as crucial aspect which needs to be properly taken care by
organisational managers in order to make their more viable (Al-Marzouqi and Ben Yahia, 2022).
Problem 2
Managers of Airbnb are unable to understand the diverse needs of their employees which
led them to get dissatisfaction from their job. Managers lack motivational skills which are
needed for motivating the employees. Employees are not encouraged to achieve a desired
objective which creates issues in providing satisfaction to their customers. Managers of Airbnb
are lacking their ability to inspire their employees to work at the time of global pandemic. As a
result, employees are working in a stressful manner which is also hampering their productivity in
a significant manner.
Problem 3

After the pandemic, people are more focused on health and well being. They are taking health as
priority so that they can prevent from virus. It is crucial to keep premises neat and clean which
can attract new customer. As it can be seen that many guest customers have complained about
untidiness and unhygienic condition which diminishes company's image. It will impact on
company's image and may loose existing customer by word of mouth. It becomes difficult for
company to retain its customers along with managing company's reputation. So it is needed to
keep premises clean and hygienic so that it can satisfy customer's expectation (Park and et.al.,
2021).
Problem 4
The financial position of company is not up to mark as it have carried forward balance of loss.
So it pushes back investors while taking decision regarding investment. Financial statements
shows actual image of company and helps stakeholders and investors in making decision to have
interest in company or not. It is important for company to have sufficient working capital in
order to promote smooth functioning of company. By using funds in right manner it can yield
higher profits. Various factors such as tax implication can bring down profitability of company.
Problem 5
It is important to analyse needs and wants of customers and provide with same quality services
so that company can meet their expectation. Customer satisfaction is the key to higher profits.
There are various digital tools which collects and interprets data in order to create insights which
helps company in understanding consumer behaviour and expectation. Various software helps in
filtering data so that they can segregate customers based on different factors. By understanding
customer's expectation, it becomes easier for company to provide with similar quality service
which can satisfy customer.

Problem 6
Marketing plays an important role in making company more profitable and when used
effectively, it can improve company's performance and productivity. It makes aware about
company's offerings and how they are different from competitors. It is important to frame
effective strategy which can enhance company's performance.
Problem 7
There are various tools which helps company in decision making. Sometimes management of
company struck in dilemma to choose in which alternative but high tech software help in
analysing alternatives and to suggest feasible option in order to take corrective decision (Torres,
Ridderstaat and Wei, 2021).. It is important to take right decision or it will collapse company's
fame. Correct decision leads to higher profits and makes it easier to attain organisational goals.
Recommendation
There are various areas in which company is lacking and it is needed to take corrective measures
so that it can minimise its impact on business operations. It is important to provide quality
services which can attract larger customer base and company needs to expand its customers so as
to generate higher profit. It should focus on TQM along with profit making so that it can satisfy
customer's expectation. Company needs to formulate effective strategies in order to accomplish
organisational goals effectively and efficiently.
Action Plan
In order to satisfy customer's needs and wants, its is important to identify their expectation so
that company can deliver quality service so as to make them satisfied. It is needed to pay
attention of managing their functions so that they a=get attracted towards company's offerings.
Every member of company must contribute towards making company successful. Employees are
considered as asset of company and must be provided with a foster environment so that they can
work with peak potential towards attainment of personal as well as organisational goals.

Justification
Quality plays an important role in making company successful and it is needed to take corrective
actions which will enhance company's profitability. As pandemic have affected adversely, so
company should take corrective actions in terms of providing betetr quality services,
technological upgradation, optimally use of marketing mix and allocating finance in right
manner. By framing of effective management strategies, it can improve company's performance
and productivity too.
Research Limitation
 The method which have used in conducting research may not reflect actual interpretation.
 The data which have collected from various sources are no longer usable or become
obsolete.
 The interpretation may not be correct and data may not be relevant or incorrect.
CONCLUSION
From the above project report it was concluded that COVID have affected almost every business
industry and it is needed to frame effective strategies so that it can minimise effect of pandemic
and can enjoy higher engagement of customers. As company is facing various challenges which
are needed to be addressed such as marketing issue, financial issue, cleanliness and hygienic
issue. All these issues can be addressed by formulating management strategies. Company should
focus on improving its services which are base for every business. It can use digital marketing
which makes it easier to attract larger customer base as most of audience are available on social
media. It is one of the cheapest and effective digital tool which can help company in
communicating and engaging with customers. It can upgrade its existing technology in order to
make process smoother and easier.

REFERENCES
Books and Journals
Aigbedo, H., 2021. Impact of COVID-19 on the hospitality industry: A supply chain resilience
perspective. International Journal of Hospitality Management, 98, p.103012.
Al-Marzouqi, A. and Ben Yahia, I., 2022. Impact of Covid-19 pandemic on food and beverage
service performance and behavioral intents: importance of sanitary measures. Journal of
Foodservice Business Research, 25(2), pp.209-232.
Clark, J., Mauck, N. and Pruitt, S.W., 2021. The financial impact of COVID-19: Evidence from
an event study of global hospitality firms. Research in International Business and Finance, 58,
p.101452.
Hahang, E., Bayraktar, S. and Jiménez, A., 2022. Early evidence of leadership skills and
strategies in managing the impact of COVID-19 pandemic in the hospitality industry. Cross
Cultural & Strategic Management.
Park, I.J., Kim, J., Kim, S.S., Lee, J.C. and Giroux, M., 2021. Impact of the COVID-19
pandemic on travelers’ preference for crowded versus non-crowded options. Tourism
Management, 87, p.104398.
Park, M. and Jones, T., 2021. Going virtual: The impact of COVID-19 on internships in tourism,
events, and hospitality education. Journal of Hospitality & Tourism Education, 33(3), pp.176-
193.
Syriopoulos, K., 2020. The impact of COVID-19 on entrepreneurship and SMEs. Journal of the
International Academy for Case Studies, 26(2), pp.1-2.
Torres, E.N., Ridderstaat, J. and Wei, W., 2021. Negative affectivity and people's return
intentions to hospitality and tourism activities: The early stages of COVID-19. Journal of
Hospitality and Tourism Management, 49, pp.89-100.