Quality Management and Improvement at Airbnb: A Detailed Report

This report provides an executive summary, introduction, and detailed analysis of Airbnb's quality management within the hospitality, tourism, and events industries. It identifies problems currently experienced by Airbnb, such as issues with emergency services, irresponsible representatives, poor customer service, and unethical practices. The report then examines Airbnb's capabilities and competencies to improve service quality, including its core abilities and the application of Porter's Five Forces model. Finally, it explores the impact of quality management techniques like Kaizen and benchmarking on Airbnb's operational efficiency and customer satisfaction. The report concludes with a summary of findings and references supporting the analysis, highlighting areas for improvement and strategies for enhanced customer experience and overall business performance.

MANAGING QUALITY IN
HOSPITALITY, TOURISM AND
EVENTS

EXECUTIVE SUMMARY
Airbnb was founded in August’ 2008 at San Francisco in California. It is a start-up of US which
has seen tremendous increase in the revenue with time. Airbnb was launched at the time when
founders could not afford their rent. The industry has 60 million users, over 2 million listing and
has been valued at $25 billion in 2016. Airbnb provides an online platform to allow individuals
to rent out their homes, rooms or apartments to visitors.

TABLE OF CONTENTS
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Problems being currently experienced by Airbnb.......................................................................1
TASK 2............................................................................................................................................4
The capabilities and competences of Airbnb to improve quality of services..............................4
TASK 3............................................................................................................................................6
Impact of techniques on Airbnb in terms of effective quality management...............................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Hospitality industry includes lodging business, hotel services, accommodation facilities,
bars, restaurants, entertainment, amusement park and theatres, cafes as well as food and
beverages department. Airbnb was founded in August’ 2008 at San Francisco in California. It is
a start-up of US which has seen tremendous increase in the revenue with time. Airbnb was
launched at the time when founders could not afford their rent. The report will provide a
guidance about various issues faced by Airbnb in recent scenario and its capabilities and
competencies to improve quality in the coming years. Use of techniques will also be depicted in
the present report.
TASK 1
Problems being currently experienced by Airbnb
Airbnb has evolved tremendously providing lodging and accommodation facility to many
travellers. The industry has 60 million users, over 2 million listing and has been valued at $25
billion in 2016. Airbnb provides an online platform to allow individuals to rent out their homes,
rooms or apartments to visitors. It has though enhanced its operations in few years many
problems and issues arises giving travellers a bad experience. Airbnb has been associated with
many ill practices majorly in UK and other parts of the world as well. News and stories about
murders, injuries, sexual assault and discrimination are common in respect of Airbnb. These
issues associated with Airbnb are:
No help at times of Emergency – Many travellers and visitors have faced issues
regarding help services at the time of emergency while using Airbnb in UK as these houses are
located mostly in suburban areas where network and help reaches late. The Trust pilot has rated
the industry as bad with 1 star out of 5.
Irresponsible representative – The people associated with Airbnb are mostly
irresponsible and have a neglecting attitude when it comes to help customers. No customer care
services are provided and no valuable guidance is given to customers in the UK based services.
Many people has rated their customer service team as ill-mannered and carefree.
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(Source: Customer satisfaction as an indicator of service quality in tourism and hospitality,
2015)
Pathetic attitude – The team at Airbnb does not help customers in solving problems or
engaging with them. Such a poor attitude will impact the overall performance of the industry.
Either, they will lose the customers or the customers will shift to other competitors.
Might lose valuable information – The Airbnb personnel has a tendency to interact with
customers till they get their money. Afterwards, these people do not maintain any records or
ledgers or basically service tickets which could provide solutions to various problems. A service
ticket is vital for any company providing online services and should remain open so as to help
customers in need.
Poor communication – It has been seemingly felt by many travellers that information
shared with Airbnb managers goes in vain and becomes void. Because of the seemingly
disorganized nature of customer service system of Airbnb, it can be easy for important and case-
relevant information to become lost or misdirected.
Less interaction amongst themselves – It has been researched that many Airbnb service
providers interact less to customers and amongst themselves as well which is the major problem
responsible for decrease in revenue. Travellers around the world reported chaos and confusion
while communicating with Airbnb members.
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Illustration 1: Airbnb - An accommodation service provider

Blame others – It has been reported by many travellers of Airbnb as feedback that the
persons managing Airbnb services blames customers mostly and never take any appropriate
decisions regarding problem solving. Poor customer services have also degraded its overall
image causing issues.
Low knowledge about technology – Many Airbnb members are not up-to-date about the
current technology and know-how which hamper communication and quality customer services.
It has been noticed that if you provide support for a service or product, it would seem like a basic
job requirement for you to understand the ins and outs of the product you are selling which is
totally lacking in them.
Unfair policies and practices – The UK based Airbnb service providers are engaged in
unethical practices towards customers and travellers from around the world. It mainly focuses on
making a huge amount of money and policies as well as rules that are followed according to the
interest of the company. Such an ill behaviour has arose problems for industry as a whole in the
UK.
Poor refund system – The company has an ill system of refunding to customers who did
not availed the companies services. Reports and social media feedback show that customers have
to wait for months to receive their refund amount which becomes hectic for users to always write
to support service for refund purposes.
Loopholes in the system – There has been many scams and loopholes in the overall
system of Airbnb as they don't keep the promises made at first hand. Low quality of customer
services and lagging in refunding amount has arises many problems leading competitors to
succeed. Fulfilment of promises is vital so as to maintain a healthy relationship with customers
who are the key to success.
Thus, Airbnb is the cheapest mode of finding accommodation while travelling but has
several issues associated with its management team in UK. It has been in many disputes causing
huge sums of money demanded by customers as refund for providing ill and poor services. For
instance, a group of friends in Barcelona has booked a flat using Airbnb services has been locked
up in jail as the neighbours thought they were robbers which ruined their trip. The group asked
for refund which credited after 5 months of discussion.
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TASK 2
The capabilities and competences of Airbnb to improve quality of services.
The core competencies and capabilities of Airbnb refers to the power of coordination and
skills so as to create value. Airbnb is always in a look out to grab opportunities so as to enhance
competitive advantage. The Airbnb has provided lodging facilities at cheap rates than hotels and
B&B by using rented properties of owners and landlords. It is based on a broker service which
helps earn revenue by the percentage difference provided to landlords and amount of rent
received from customers. The core ability of Airbnb is its App which helps travellers locate
available properties at different destinations. The porter's five forces model will evaluate the
strategic intent of Airbnb in order to improve quality.
Porters Five Forces Analysis
(Source: Airbnb Porter Five Forces Analysis, 2018)
Bargaining power of Suppliers – The suppliers of houses who rents their rooms or apartments
has no direct contact with customers as Airbnb services its people using Airbnb App online
service. Thus vendors have a weak bargaining power over managers at Airbnb UK. The vendors
supply houses, rooms and apartments to Airbnb which then supply the same to travellers. Thus
suppliers are the hosts who provides client services and however cannot place pressure on the
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Illustration 2: Porter's Analysis of Airbnb

Airbnb personnel to fulfil their demands. The customers thus generates revenue for both the
hosts and service brokers which changes from places to places according to the demand.
Bargaining power of Buyers – The buyers being the sole persons for generating revenue at
times negotiates with Airbnb brokers to set price accordingly. Thus, Customers has high
bargaining power over prices for rooms, apartments or houses. The economic growth has always
been helpful in developing the tourism and hospitality of a country. Airbnb is the cheapest source
of lodging and accommodation when compared to hotels and motels which is its core
competency. As the Airbnb services operates online using web platforms, customers usually
have many options to choose from which certainly fits in their budget.
Threat of new entrants – The industry faces many problems and issues which might causes
threat from competitors affecting their overall revenue and growth factors. Though the Airbnb
operates in more than 190 countries with huge capital investment it restricts new business firms
to pop up and start competing at the same level of scale of operations. But at times entry of new
firms could be flexible as Airbnb operates through web portals and other competitors may attract
customers with quality services at reasonable prices. The competitors are in huge numbers which
needs brand value to enter the hospitality and tourism industry possessing threats to Airbnb.
Threat of Substitutes – There is threat of substitutes at a high rate as no switching costs are
incurred. Customers uses web portals to book apartments which are provided by many different
vendors with different prices. The hotels, motels, hostels and couchsurfing are the few
alternatives of Airbnb which provides identical services. The couchsurfing came into existence
in 2004 which provides small place to stay without any costs. It supports a global community of
10 million people in more than 2,00,000 cities worldwide. A traveller can choose a host based on
location thereby enabling them to stay down town instead of a low-priced motel a few minutes
away being a major threat to Airbnb.
Industry Rivalry – There exist rivalry amongst existing firms in a moderate to low ratio which
at times influences revenue of the Airbnb industry. Some big Airbnb service providers having
capital intensive projects possess threats to small and new companies. The Onefinestay.com is a
start-up based in London UK renders Airbnb services to customers charges $600 for its property
which has become a threat to many other Airbnb service provider. Despite all the poor reviews it
is receiving, Airbnb as a business is
growing, expanding and generating huge revenues in UK competing with existing firms.
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TASK 3
Impact of techniques on Airbnb in terms of effective quality management.
The two techniques used in order to manage quality at Airbnb are Kaizen and
Benchmarking which will help in growing the industry in a better way so as to enhance its
competitive advantage as well as revenue generation. Both the techniques are designed to help
the Airbnb industry to evaluate its performance and meet deviations so as to effectively manage
quality standards of property as well as customer services.
Kaizen – The term Kaizen is a Japanese word meaning continuous improvement of tasks
or activities. It is used in corporate sector to evaluate performance of all from CEO level to line
managers as well as unskilled workers. It also takes into consideration systems and processes,
purchasing and marketing of goods, logistics and supply chain management so as top keep check
of the overall working of the corporation. Kaizen, also known as continuous improvement, is a
long-term approach to work that systematically seeks to achieve small, incremental changes in
processes in order to improve efficiency and quality. Kaizen can be applied to any kind of work,
but it is perhaps best known for being used in lean manufacturing. The process of Kaizen
technique has seven steps:
Identify an opportunity – It is vital to identify and grab opportunities as and when they arrive.
Analyse the process – Take into account critical process so as to improve quality of services at
Airbnb.
Develop an optimal solution – It is vital to develop a solution or plan for a particular aspect
which needs to be implemented at a later stage.
Implement the solution - The plan so introduced needs to be implemented in the best way
possible so as to make the best use of opportunity thereby making profits.
Study the results - The results so obtained needs to be evaluated so as to meet any
discrepancies.
Standardize the solution – The technique of Kaizen helps in improvement of functions thereby
meeting standards set .
Plan for the future – It is a vital step in the process of Kaizen which helps in planning for future
so as to meet customer aspects in a more enhanced manner.
The advantages of Kaizen technique used at Airbnb are :
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 It focuses on working in teams as it creates an ideal working environment which provides
rewards and recognition to all (Gibbs and et al., 2018).
 The Kaizen technique emphasizes on managing waste and enhance efficiency as work is
being divided in teams which ensure quality improvement.
 This technique used in Airbnb helps in providing satisfaction to members as they can
manage work and quality through continuous improvement meeting standard while
working collectively.
 By implementing technique like Kaizen will help Airbnb workers to ensure safety and
regularity of work as team work helps in generating newer ideas and better control over
activities.
The disadvantages of Kaizen related to Airbnb industry possesses many threats in form of
training workers, use of technical machines, fast speed of internet services etc. which causes
Airbnb industry huge expenses. To improve quality management at Airbnb it takes a lot of time
while following Kaizen technique of continuous improvement.
Benchmarking – This technique helps Airbnb to measure its performance and rectify
problems in matter of quality services rendered to customers. Benchmarking is a term used in
managing performance of projects and setting standards so as to meet quality levels. The use of
Benchmarking technique in order to manage quality of services at Airbnb involves strategic
implementation of standards set by big brands and firms. The Benchmarking technique of quality
management has certain steps to be followed :
Select a task – This step involves selection of the activity which needs to performed in a more
standard way as compared to big firms rendering similar services.
Define the process – The process needs to be adopted to meet the standard proposal.
Identify data sources – The sources of data needs to be collected so as to identify problem area
such as insufficient services to customers at Airbnb (Yeng, Jusoh and Ishak, 2018).
Determine the gap – This step involves comparison of standards served by a brand and the
common Airbnb industry.
Establish process differences - Before embarking on comparison with other organizations it is
essential to know the organization's function and processes at Airbnb.
Mark future performance – It is vital to set standards for future and mark targets providing a
mission for Airbnb workers.
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Communicate – Appropriate communication is vital to meet standards at every step no matter
Airbnb works and operates through online portals.
Adjust goal - The specific goal has to be shifted with time and circumstances so as to maintain
quality standards.
Implement – Lastly implementation of every process and sytem needs to be done in an
appropriate manner.
The advantages of Benchmarking Technique used at Airbnb are :
 It helps in creating value and culture for the organization thereby improving quality of
services (Gibbs and et al., 2018).
 It sets targets and focuses on sustainable use of resources to meet standards.
 The benchmarking technique helps Airbnb by incorporating external changes thereby
providing extensive training to workers.
The process of benchmarking has certain limitations as it provides insufficient information about
the standards. The technique used by Airbnb service providers lead to dissatisfied customers.
CONCLUSION
The report concludes how the Airbnb services has increased with time by providing
cheap accommodation facilities. Though in recent times the industry has faced many problems
and tragic issues but has seen an increase in growth and revenue to tremendous heights in 2016.
The report shows the power of vendors and substitutes in the Airbnb industry and the use of
internet has facilitated its overall image.
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REFERENCES
Books and Journals
Amaro, S., Andreu, L. and Huang, S., 2018. Millenials’ intentions to book on Airbnb. Current
Issues in Tourism. pp.1-15.
Gibbs, C. and et al., 2018. Use of dynamic pricing strategies by Airbnb hosts. International
Journal of Contemporary Hospitality Management. 30(1). pp.2-20.
Lee, S. and Kim, D. Y., 2018. The effect of hedonic and utilitarian value on satisfaction and
loyalty of Airbnb users. International Journal of Contemporary Hospitality Management.
pp.100-125.
Peters, M., Kallmuenzer, A. and Buhalis, D., 2018. Hospitality entrepreneurs managing quality
of life and business growth. Current Issues in Tourism. pp.1-20.
Quattrone, G. and et al., 2018. Is the Sharing Economy About Sharing at All? A Linguistic
Analysis of Airbnb Reviews. International AAAI conference on web and social media.
Reinhold, S. and Dolnicar, S., 2018. 4 How Airbnb Creates Value. Peer-to-peer accommodation
networks,. p.39.
Sipe, L. J. and Testa, M. R., 2018. From satisfied to memorable: An empirical study of service
and experience dimensions on guest outcomes in the hospitality industry. Journal of
Hospitality Marketing & Management. 27(2). pp.178-195.
Yeng, S. K., Jusoh, M. S. and Ishak, N. A., 2018. The impact of total quality management (tqm)
on competitive advantage: a conceptual mixed method study in the malaysia luxury hotel
industries. Academy of Strategic Management Journal. 17(2).
Online
Airbnb Porter Five Forces Analysis. 2018. [Online]. Available through :
<http://www.expertwritinghelp.com/blog/2018/01/12/airbnb-porter-five-forces-analysis/>
Customer satisfaction as an indicator of service quality in tourism and hospitality. 2015. [Pdf].
Available through : <http://www.ijqr.net/journal/v9-n4/9.pdf>
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