BM628: Airbnb's Challenges & Impact of COVID-19 Pandemic

This report explores the challenges faced by Airbnb during the COVID-19 pandemic. It identifies key issues such as cancellations, reduced customer footfall, dissatisfied employees, and profitability decline. The research utilizes both primary and secondary data to analyze the impact of the pandemic on Airbnb's business operations and financial performance. Recommendations and an action plan are provided to help Airbnb mitigate losses and successfully navigate future crises. The report also includes a literature review highlighting the research gap concerning the specific challenges faced by Airbnb during the pandemic, and a discussion of research methodologies employed to gather relevant data. The findings emphasize the need for Airbnb to adapt to changing customer behavior, implement robust safety measures, and address employee concerns to ensure long-term sustainability.

CHALLENGES FACED BY AIRBNB DURING THE
PANDEMIC COVID 19
Contents
Contents...........................................................................................................................................1
BACKGROUND AND REVIEW OF THE PROBLEM FACED..................................................3
Background of the topic...............................................................................................................3
Research questions.......................................................................................................................3
Research aim and objectives........................................................................................................3
Problem statement.......................................................................................................................4
Rationale of the research.............................................................................................................4
Structure of the report..................................................................................................................4
Issues which AirBnb faced during the pandemic of Covid 19....................................................5
LITERATURE REVIEW................................................................................................................1
Pandemic situation has influenced the profitability of the organisation......................................1
DISCUSSION OF THE SECONDARY AND PRIMARY RESEARCH.......................................4
Research methodology.................................................................................................................4
Primary research..........................................................................................................................5
Discussion on secondary basis...................................................................................................11
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CRITICAL REVIEW OF THE RESULTS...................................................................................13
RECOMMENDATION AND ACTION PLAN............................................................................15
Recommendation.......................................................................................................................15
Action plan.................................................................................................................................16
REFERENCES..............................................................................................................................18
APPENDIX....................................................................................................................................20
Questionnaire.............................................................................................................................20
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BACKGROUND AND REVIEW OF THE PROBLEM FACED
Background of the topic
Covid 19 is a pandemic situation that has negative impact on business performance of an
organisation (Das, 2022). This research is based on Lodging Hospitality industry of United
Kingdom. The industry encompasses an extensive range of activities and services such as
lodging, food services, convention centers and restaurants. The lodging industry consists of
resorts, motels, bed, hotels and breakfasts. Within this research, AirBnb is a chosen American
organisation that operates an online marketplace for lodging, mainly homestay for tourism
activities and vacation rentals. Company was founded in 2008 by Brian Chesky, Joe Gebbia and
Nathan Blecharczyk. AirBnb is headquartered in San Francisco, California, U.S. Covid 19
starting at the end of 2019. This situation directly or negatively impacted on hospitality industry
throughout the world (Datta and Mitra, 2022). The AirBnb faced the issue of rapid drop in
bookings that turn to impact on their sales and profitability in negative manner. Along with this,
the hospitality industry has been clobbered, from cruises, flights and lodging. AirBnb has
decreased their sales and revenues that turn to impacted on their business performance and
productivity.
Research questions
 What are the issues which AirBnb faced during the pandemic of Covid 19?
 How the pandemic situation has influenced the profitability of the organisation?
Research aim and objectives
Research aim: Main aim of the current research is “To identify the impact of pandemic situation
on the context of AirBnb”.
Research Objectives:
 To identify the issues faced by AirBnb during the pandemic
 To determine the influence of Covid 19 pandemic on the profitability of and business of
AirBnb
 To recommended strategies for AirBnb for reducing the losses and execute their business
successfully
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Problem statement
Today, Covid 19 is a pandemic situation that negatively impact on lodging industry by
reducing their sales, performance etc. There are various challenges or problems faced by lodging
industry during the period of Covid 19 (Elshaer and Azazz, 2022). These are decreased sales,
reduced number of customers, reduced business performance and many others. These are major
challenges faced by Lodging industry that turn to impact on their corporate brand image in
negative manner.
Rationale of the research
Main rationale behind conducting this research is to identify the impact of pandemic
situation on the context of AirBnb. This is a main reason regarding doing this research in
effective and systematic manner (Gul and Susanli, 2022). There are different stakeholders that
are benefited from the current research. These are AirBnb, students, researcher and many others.
For researcher, present investigation is essential for them by improving their different types of
research skills that are data collection, time management, decision making and many others. For
AirBnb, current investigation is significant for increasing their understanding about the ways for
overcoming the impact of Covid 19. For students, this research assists them by improving their
knowledge about the impact of pandemic situation on the context of lodging industry of UK
(Kim and Liu, 2022).
Structure of the report
There are various activities that are essential in completing full report effectively and
systematically. These are defined below;
Activities Descriptions
Introduction This is a first activity that includes information about the research
topic. There are certain information that are included in introduction
activity including background of the topic, research aim and objectives,
research questions and many others.
Literature review This chapter is important in collecting secondary data from
various sources that are books, journals, articles and many others.
These sources are effective in gathering secondary information
effectively (Nair, 2022).
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Discussion of
primary and
secondary research
This is a methodology chapter that assist in gathering secondary and
primary data through various methodologies. These methodologies are
research approach, research philosophy, research choice and many
others.
Results of the
research
This section helps in evaluating both primary and secondary data from
research analytical tool. Within this research, frequency distribution
analysis and thematic analysis (Pal, 2022).
Recommendation
and action plan:
This is last activity that helps in recommending some information
about the topic to the AirBnb.
Issues which AirBnb faced during the pandemic of Covid 19
As per the view of Bailey and Breslin, (2021), travel and tour industry hit were hard after the
pandemic rise in the world. The profit of the organisation impact a lot as their revenue and sale
reduced a lot. The global crisis has proven as one of the greatest challenge that any company
faces during their past business operation. The issue that they face are:
Cancellation and reimbursements: When the Covid 19 announced in the world all the
activities are stopped. The companies also need to refund their customer payment which was
made by them for availing their service. Organisation has to announced that they are refunding
their buyers amount for the reservation they made for certain time. Cancellation the package and
deciding the amount is the most difficult task because they need to provide proper reason for the
amount they will deduct and many more. They need to evaluate the service amount they charge
from their buyer for the service they will be rendering. There are many buyers who lately inform
that about the cancellation they will be doing. This become issue as they need to effectively
communicate their employee about the reimbursement they are providing so that communication
gap between them can be reduced.
Reduce in customer footfall: Another issue that they face is there customer base reduce
as a lockdown was announced in the organisation. This affect them as customer are cancelling
their tour or travel that they planned. In fact, after the unlocking was started than to buyers has a
fear to go out and enjoy. This impact them as their customer base reduces which affect their sale
and revenue. Decline in the buyers is the major issue for every company because major part of
income is earned by them.
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Dissatisfied employees: The next issue that they face is there employee are not satisfied
by the policy that are being designed after the pandemic. The whole working scenario of the
companies alter a lot. Remote working has started which affect the staff as they are not getting
proper working environment. The employee is getting frustrated while working at home which
affect their productivity and performance. They are not able to maintain their personal and
professional life. Company had to lay off their staff because of the crisis so that they can protect
the business environment (Alam, 2020). This layoff becomes the burden as the pressure
enhanced on those employees which are there. They need to do diversified work which affect
their performance and motivational level.
Risk factor: Organisation has faced so many risk at that time which are providing proper
sanitizing facility, following social norms in more effective manner is the problem that they need
to face so that they can protect their stakeholder from the infection. They need to properly
analysis the situation so that they can form strategy that best suit them and help them to fight
with their competitor in more effective manner in the time of Covid 19. Avoiding risk is the
major concern so that they can provide service in the best manner.
Failing to abide by laws: The company provides service to other national also for that
they need to abide them by the local laws and regulation that is being designed by government
after pandemic hit. This becomes problem as they need to critically evaluate laws before renting
any property or service to their consumer after the crisis. There are many laws which also differ
from one place to other this situation is also need to be analysed properly so that they can fulfill
their buyers need.
Reduce in Profitability: The major issue that they face after the pandemic hit is that
their profit margin reduces because the customer is getting low. The purchase that will made
before is high but after that it lower down which affect their profit. The sales reduce which
impact their revenue. The revenue margin is low which in turn reduces their profit. Profit
reduction is the major concern because their financial performance will see a decline and the
company do not have enough liquidity which can be used for business operation.
Increased cost due to adoption of safety and hygiene measures: Cost of production is
increased with the pandemic arose. Companies need to adopt various safety tools and methods so
that proper sanitising facility can be provided by them. This becomes a major concern because
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company does not have enough cash at that time and increasing the cost of production means
charging high from the buyers. This will be issue for them because the revenue will be low.
Issues in understanding customer buying behaviour: The needs and wants of customer
is so dynamic that keeps on changing. Earlier it is possible to understand their perception as
communication is easy but when the pandemic hit all the sources becomes difficult. This
becomes there concern as the buyer’s behaviour in the current time is so negative that it becomes
challenges to turn this consumer behaviour in more positive way (Pallangyo and et. al, 2020).
The buyers are responding in so low manner that it becomes vogue for organisation to know
what they want in the recent time from the companies. There motivational level after the hit of
Covid is demoralise because they are not feeling safe.
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LITERATURE REVIEW
This refers to the process used for gathering in-depth information through available
secondary sources. These are articles, books, magazines, journals, publication research and many
others relevant to the topic. Main purpose of the literature review is to determine the research
gap. In this research, main gap is the impact of pandemic situation on the context of AirBnb. In
previous studies, there was lots of data available regarding the impact of Covid 19 on hospitality
industry, but there was lack of information regarding the challenges faced by AirBnb during
Covid 19 (Xiong, Chen, Okumus and Fan, 2022). This chapter contain the secondary information
of the topic selected by researcher. It is the most important part while conducting any
investigation. The past public data are being used discuss here so that investigator can gain
insight knowledge of study. This section also addresses the gap between past and present
research.
Pandemic situation has influenced the profitability of the organisation.
As per the view of Abd-Alrazaq and et. al, (2020)., after the pandemic the period of
investing in organisation has becomes a concern for the organisation. Their profitability has
reduced a lot which effect their organisational performance as well as productivity. There is a
negative impact of the situation on profit margin of the company. The profit amount reduced a
lot which becomes a major issue. Whole world is fighting with the disease and the business
activities are shut down. There are some factors which affect the profitability of organisation,
some of them are:
Shortage of customer: When Covid came all the countries imposed a strict lockdown in
their country so that they can protect their economy. This becomes problem because the travel
and tourism activity shuts down which impact the profit margin of hospitality industry where the
major source of income is the capital received by tourist. Even when the lockdown was stopped
then to buyers are not planning for any tour. They are more concern towards their health. So the
amount that they spend on travel are being utilised on other manner. This effect the profit of the
company as they are not getting enough income for the hospitality service. The customer is more
keen towards their health.
Reimbursements strategy: The another component that affect the profit amount of the
hospitality industry is the reimbursements policy that was announced by the government. As
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company are not getting customer in this time, their sale is low and at this time they need to pay
the amount that is received by customer for the earlier booking. This becomes a major issue
because the capital is still low and in that time they need to refund the amount to their buyers.
This reduce their profit margin.
Reduce in investment: Another issue which impact their profitability situation is the new
investor are not ready to invest their capital in the company. There is no new investment that is
made by the investors on the hospitality industry. This impact their profit as companies cannot
expand their business because investment is low (Marra and et. al, 2020). The shareholders have
a fear of getting their capital lost. This is the main reason that company is not able to enhance
their capital at the time of Covid 19. Investor has the risk that this company can be shut anytime
because the pandemic is so bad that the financial stability is low everywhere.
Not able to generate leads: The companies are adopting various innovative marketing
strategy to promote their brands but not able to generate leads because customer is not getting
attractive and book their tour. The health is becoming the major issue for the company as buyers
are not generate any leads. The amount of capital they are investing on publicity is the problem
that they are expanding more but not getting result from it. Generating leads is must because it
enhances the customer base as well as organisation can better know what strategy will be best for
them.
Increased amenities: The concept of work from home has enhanced which enhance the
cost of production for the company as they need to provide extra amenities to their employee so
that smooth functioning can be done. This is the another issue as sales is low than to company
need to pay amount for the facility they are providing to their staff. Facilities like laptops,
internet facility, proper broadband, health equipment and many more. This creates burden
because having the devices is must in hospitality sector so that they can track their work and can
run their businesses.
Market competitors: Another factor that impact the profitability of the organisation is the
degree of competition the firm faces. There are so many rivalries in the travel and tour industry
which design so many innovative ideas that can help them to attract more customer towards
them. the market if hospitality industry is not a monopoly market. There are larger number of
seller available in that industry. So competitors approach in the time of Covid impact the firm
profit margin.
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There are some major that can be implement by the companies if they want to enhance their
profit margin at the time of pandemic some of the approaches that they can adopt are:
Keeping additional focus on managing hygiene: Hospitality industry can follow proper
hygiene in their property which help them to attract more buyers towards their company as
compare to their competitor. If this is strictly follow by the companies, then customer will have
low concern for the health and they will book their tour in the brand. This will help the to boost
their sale, earn more revenue. Keeping focus on hygiene is must if they want greater revenue.
Developing employee engagement: In the time of pandemic companies cannot hire new
employee, so for this they need to develop effective interaction with their staff so that they can
retain in this time. Retention is more because recruiting and hiring new employee need time and
money. Brands are not such a position that they on regular basis hire new staff and provide them
training in the Covid situation. So they need to make attractive communication so that employee
feels motivated and will work for the company and reduce their extra cost.
Emphasising over developing customer loyalty: The another strategy that can be
design by hospitality sector is Emphasising over developing customer loyalty. If customer is
loyal towards the hotel or traveller agency than they will not switch to any other brand for
making any booking (Ahmed and et. al, 2020). In the time of any crisis, if companies want to run
their business and earn income then customer loyalty is must for their survival. The company
should develop many innovative ideas which can help them to enhance more consumer loyalty
within the organisation.
Conclusion of literature review:
From the above literature review it is being noted that the hit of pandemic was so hard for
the companies as their survival in the market becomes difficult. The sector has face so many
challenges which impact their performance and profit. The major issues that they face at the time
of crisis is providing the best safety measures to their stakeholders, so that they can earn revenue
and compete with their competitors. Some of the problems that are being faced by them are
reduce in their customer base, generating leads through social media, reducing cost of production
and many more.
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DISCUSSION OF THE SECONDARY AND PRIMARY RESEARCH
Research methodology
Research philosophy: The methodology of research philosophy is a set of beliefs and principles
for evaluating information. There are three major sorts of philosophies: positivism,
interpretivism, and realism (Ledford and Gast, 2018). The investigator chooses the positivist
philosophy so that numerical data can be analysed and assessed in a methodical and appropriate
manner over a set period of time. As a result, positivist philosophy is relevant and appropriate for
systematic information analysis.
Research approach: The research approach is a methodology that aids in the implementation of
the selected philosophy so that goals can be reached in a systematic manner. Inductive,
deductive, and abductive approaches are the three main types of approach. The deductive
strategy was chosen by the researcher because it aids in the analysis of quantitative data
acquired, allowing study to be conducted using reliable and meaningful numerical data. The
advantage of the deductive technique is that it only examines numerical and statistical data over
a specific time period.
Research strategy: The process that aids the investigator in collecting relevant data is referred
to as the research strategy. Action research, case study, survey, interview, systematic literature
review, and many other methodologies are available. In order to compile important pieces of
information, the researcher relied on a survey and a thorough literature study. The purpose for
doing a survey is that numerical and primary data can be collected in a certain amount of time,
and the goals may be met in a methodical manner (Pandey and Pandey, 2021). A questionnaire is
created as one of the survey instruments so that information from the chosen human participants
can be recorded. On the other hand, the investigator may choose to conduct a systematic
literature review in order to collect secondary data from sources such as books, articles, journals,
newspapers, and other publications. As a result, the investigator chooses a systematic literature
review and survey so that pre-determined objectives and goals can be easily met.
Research choice: The methodology that gives the type of information needed to conduct the
entire inquiry is known as research choice. Mono method, mixed technique, and multi-mixed
method are the three main options. The investigator chose the mono approach since it allows
them to choose between two major types of research: qualitative and quantitative. The
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investigator has chosen quantitative research as a method of achieving set goals. It has been
determined that the investigator chose quantitative research in order to collect numerical and
statistical data. The benefit of quantitative research is that it allows for the collection of
numerical data in such a way that statistical facts and figures can be given more weight.
Data collection: Data collection is a practise that includes two types of data collection: primary
and secondary data. The investigator has chosen both data gathering methods so that the research
objectives can be addressed properly. The investigator chooses the primary data collection
method so that first-hand data can be gathered (Papachristos, 2018). The term "first hand" or
"raw data" refers to information obtained for the first time by addressing a fresh source. The
questionnaire was chosen as the major data instrument since it includes both raw and numerical
data. On the other hand, secondary data collecting is chosen because it aids in the utilisation of
previously published information.
Sampling: Sampling is a research methodology that aids in the selection of a specific number of
human participants for the collecting of valuable data. Probability and non-probability sampling
are the two types of sampling (Hoon and Singh, 2019). Probability sampling is selected by
researcher because it helps in selecting large number of participants. 30 participants are selected
by investigator from the industry of travel and tourism because they have great knowledge
regarding this (Snyder, 2019).
Primary research
Frequency distribution table
Q.1. What is the impact of COVID-19 over lodging industry? Frequency
a) Positive 0
b) Negative 30
Q.2. What are the issues faced by AirBnb during global pandemic of COVID-
19?
Frequency
a) Decreased customer footfall 9
b) Increased cost due to adoption of safety and hygiene measures 8
c) Issues in understanding customer buying behaviour 7
d) Dissatisfaction among employees 5
5