Global Hospitality & Tourism Issues: Assessment of Airbnb - MOD006065

This report provides an in-depth assessment of Airbnb, a leading platform in the shared economy, exploring its concept, technological innovations, and strategic positioning within the global hospitality and tourism industry. The report examines Airbnb's business model, focusing on its unique approach to lodging, customer demographics, scale supply, and disruptive innovations. It analyzes the effective use of technology and innovation, including the platform's content strategy, user-generated content, and the importance of user experiences. A TOWS matrix is used to evaluate Airbnb's internal strengths and weaknesses, and external opportunities and threats, providing strategic recommendations. The report also discusses the legal and regulatory challenges, and the competitive landscape Airbnb faces. The analysis draws on academic research to support its claims, offering insights into the company's growth, customer retention, and future prospects. This report, contributed by a student, is available on Desklib, a platform providing AI-powered study tools for students.

Running head: ASSESSMENT OF AIRBNB
Assessment of Airbnb
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ASSESSMENT OF AIRBNB
Introduction
Airbnb has been the leader of sharing economy and the emerger of the concept of
providing various residence with the power of earning money by sharing their extra spaces.
In this assignment, the concept of Airbnb and its foothold in the market has been discussed.
The various problem which is being faced by the company which might affect it in the future
has also been discussed, and the solutions of the problems have been explained in the
assignment.
Assignment question 1:
The concept of Airbnb
Airbnb has introduced a unique concept of lodging as a shared economy where the
company allows the user to share someone’s home to stay instead of hotels. By using Airbnb,
a user can find places to stay for a short while travelling across countries like Europe or even
stay for one month while doing an internship in Los Angeles. Airbnb allows sharing the extra
space of the house with a guest by becoming the host and gets some extra money. Airbnb
does not own any particular properties; instead, it works as an intermediatory between the
host of the property and the guest.
The people who need places to rent for a short interval can easily refer to Airbnb. It is
effortless to make an account in Airbnb by just entering the email address, password, birth
date, and the name. The host needs to accept the equality policy of the company which states
to treat every person equally irrespective of their race, colour or religion. There is also an
option for the host to sign in through facebook or google account. Airbnb has covered a lot of
areas around the world which is the reason the company has been so successful. At present

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Airbnb has more than 6 million rented properties all around the world and covers almost 190
countries (Edelman and Luca 2014). Once a user clicks on the available listings of a
particular area, the rules and regulation of a particular place will be shown.
The user will also get information about the available amenities of the place, the size
of the place and the surrounding environment, how to check in to the place as well as the
price for the stay. The different guests are also given an option to rate their stay in a particular
place and state their opinions about the behaviour of the host which is very helpful for the
new guests who will be renting that property. The company also allows a seamless
conversation between the user and the host, which allows the user to double-check with the
availability of the host before making the bookings. At present Airbnb is providing a facility
of premium houses that starts at a price from $250 per night stay. Airbnb employees
supervise these places and the guests will be provided with a good wifi connection, well-
stacked kitchen, and comfortable bed for the night.
Scale supply
At present Airbnb charges more from the guest than the host of a property, which
means the demand of the company is more than the supply. The value of the host is more to
the customers than the company. The hosts of various properties who are associated with the
company are given more priorities since the more available properties, and the more will be
the guests available for the company. In a mature market where the company faces more
demands from the guests the balance of the power shifts more towards the guest since they
get many options for renting properties.
The company has found a lot of opportunities to make partnerships with sites like
booking.com and Expedia which allows the company to acquire more and more guests
(Varma et al., 2016). The brand name of the company allows it to acquire 70 per cent of its

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users organically which is an excellent advantage for the company over its competitors.
Airbnb has become more valuable to the users since there is excellent availability of a vast
number of properties for the guests to choose from. When a consumer is going to book a
hotel, they need a lot of options to choose from to suit their preferences like the pricing,
desired location, and availability of different amenities in the area. For a host on Airbnb, the
liquidity is measured by how quickly they are able to fill up their property with guests and
how quickly they are able to get ready for another guest in their property.
Consumer demographics
The people like Airbnb because it is relatively cheap for the travellers around united
states, the united kingdom and even Athens where the hotels are even available for $14 per
night stay. At present, the services of Airbnb are present in more than 81,000 cities around
the world with an excess of five million places to be stayed at. Airbnb also offers a lot of
access to various local interests in their properties with the help of more than 15,000
handcrafted activities which are run by the hoists of the properties (Quattrone et al., 2016).
More than 260 million people have used the services provided by Airbnb to stay at rented
properties throughout the world (Liu and Mattila 2017).
At any given time, the guests using Airbnb gets an approximate listing of 1.9 million
rented properties around the world (Liu and Mattila 2017). The value of the company has
been gradually increasing over the years. The current valuation of the company is around $32
and is expected to reach $38 at the end of this year, the revenue of the company is also rising
equally (Guttentag et al., 2018). It has been found that 49 per cent of the users who are the
hosts of the properties under Airbnb have converted their traditional hotel to home-sharing
service. In 2016, 19 per cent of the leisure travellers had used the services of Airbnb to take
rests in between their travels (Edelman and Geradin 2015). Eighteen per cent of the business

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travellers have also used the service of Airbnb for taking a break in between (Sans and
Quaglieri 2016).
These numbers have statistically increased in the coming years which shows how the
brand has become a household name in the various countries. There has been a trend of
gaining popularity of Airbnb among the travellers and the guests owing to their customer
retention and customer satisfaction. It has been found that 93 per cent of the guests who have
used Airbnb in the past have been satisfied with their service (Ikkala and Lampinen 2015). At
present Airbnb has occupied four per cent of the overall hotel demand and this is expected to
rise to six per cent in the coming years.
Disruptive innovations
Airbnb has instilled many new age internet technologies that are helping the company
to go through its daily operations. The company addresses the customers in a very appealing
way by stating that using Airbnb a customer will be making a lot of savings, gather local
experiences as well as will be able to get various household facilities (Yannopoulou,
Moufahim and Bian 2013). With the use of Airbnb, the hosts, as well as the customers, will
both be beneficial. The company created a new and innovative online marketing system
where the hosts of different properties will be able to promote their homes, various cottages
and their apartments in a very effective manner. The hosts of the various properties under
Airbnb are able to gather their money from a cloud-based network available in the company.
For the guests who are using these properties, the cost of the properties on Airbnb is much
less than the cost of the hotels.

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Assignment question 2:
Effective use of technology and innovation
Airbnb is missing a sloid content for their blog. Airbnb needs to capture the various
stories regarding the experiences of both the hosts as well as the travellers. These stories will
help gather more customers and become more famous around the world. These shared
experiences will increase the brand awareness of the company and will be helpful in creating
a strong bond within the various communities the company is operating in. The content
strategy of Airbnb needs to be more of a user-generated content strategy. A user-generated
content strategy will be attracting more customers and retain the attention of various hosts
who are willing to joining the company to rent their properties.
The main aim of creating content is to increase the brand demand, gather experience
within the community, increase the relationship with the existing users and attract more
customers. The company blog needs to be transformed from being a sales blog to a user
engaging blog (Ert, Fleischer and Magen 2016). The stories of the various experience of the
different users will help understand why they choose Airbnb over other companies and what
are the various facilities which they liked and why they will be recommending this company
to others. A total of 500,00 people stay in hotels around the world under Airbnb, which
means there is a total of 182,500,000 bookings throughout the year (Guttentag 2015). These
are a considerable number of customers who have not shared their reviews about the great
experience they had while staying at Airbnb properties. If the company is able to gather at
least one per cent of these user reviews, then it will be beneficial for the new users to
understand the customer experience at the properties of Airbnb.
The blog of the company must be comprised of two different things namely, the
shareable content and the evergreen content. The shareable content will be the experiences of

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the various users of Airbnb, and the evergreen content will be comprised of the various
guides for the place the property is situated in, reviews for the various local restaurants and
the public attractions in that place (Zervas, Proserpio and Byers 2015). If the blog of the
company is able to share the experiences of the users, the new customers will be able to know
how the users experience different cultures of different places with the help of their hosts.
TOWS matrix
Source: (Gürel and Tat 2017)
Internal
factors
Strengths (S)
S1-Well established and
good customer retention.
S2-Cheaper as compared to
hotels (Meleo, Romolini and
Weakness (W)
W1-Violating the laws and
regulations of various
houses.
W2-Presence of bad hosts.

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External factors
De Marco 2016).
S3-Presence in social media.
W3-Easily copiable business
model
Opportunities (O)
O1-Can expand easily in
emerging markets.
O2-The company can
increase its product
varieties.
O3-Introduction of App in
mobiles.
S-O strategies
S1-O1: owing to its
excellent customer retention
the company it can easily
expand in the newer market.
S2-O2: since the company
offers cheaper rates than
other hotels, it can increase
its product varieties.
S3-O3: with the introduction
of mobile apps and the
presence of the company in
social media, it is attracting
a lot of customers.
W-O strategies
W1-O1: if the company does
not violate the various
regulations of a country, it
will facilitate its growth in a
new market (TAKACS and
VADUVA 2017).
W2-O2: the company needs
to be more customer-
oriented before increasing
its product varieties.
W3-O3: the structure of the
company needs to be
changed so that it can
compete with other
competitors.
Threats (T)
T1-Laws and regulations of
various countries.
T2-Facing lawsuits and fines
across the world.
T3-Presence of competitors
like VRBO, tripping and
others.
S-T strategies
S1-T1: if the company
adopts the laws and
regulations of various
countries along with its
excellent customer retention,
it will be very successful in
future.
S2-T2: since the lawsuits
and various fines around the
world might be faced owing
to its lower price, and the
company needs to revise its
cost according to various
countries (Lehr 2015).
S3-T3: with various
companies competing with
Airbnb, the presence of the
company in social media is a
boon for the company.
W-T strategies
W1-T1: the company needs
to overcome the central
problem of not following the
laws and regulation of
different countries to survive
and thrive in the market.
W2-T2: the company needs
to be strict on its host's
policies so that better
customer satisfaction is
provided so that they do not
face the various lawsuits
around the countries (Aznar,
Sayeras, Rocafort and
Galiana 2017).
W3-T3: the company needs
to change the business
model so that competitors
like VRBO cannot copy it.

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Conclusion
To conclude, Airbnb has been a great company in providing rent hotels for various
customers around the world. The introduction of this new concept in the business market by
the company is the main reason behind the success of the company. The various threats and
problems need to be looked at by the company so that it thrives in the future. Owing to the
brand reputation of the company and better customer satisfaction than its competitors, the
company can easily thrive more in the future.

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Reference list
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