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MGMT449

THAO HO

Assignment Questions

1. Compare and contrast the general strengths and weaknesses of large, hotel chains such as
Marriot and Hilton, bed & breakfasts, and Airbnb.

Airbnb, hotels and bed & breakfasts competed within the accommodation market. All business
operating within this sector offer lodging but were differentiated by their amenities. Both have
less attrition rate and high employee.

Hotel chains

a. Strengths
- Extensive experience and a vast scope of the business
- Effective customer retention schemes
- Strong property portfolio
- Consistency and fully investment on additional amenities by competing in all segments of
travel: hotel rooms, fine dining and spa services
b. Weaknesses
- Fees are high with overloaded number of guests in travel seasons
- The operating cost keeps high-High level of debts
- Little global market share despite the large portfolio of brands

Bed and Breakfast

a. Strengths
- Have great location and facilities
- Owners who are passionate about their work
- Relatively small and easy to manage business
b. Weaknesses
- Poor brand recognition and reputation
- Limited facilities mean limited amount of sales
- Owner struggle to take care of everything because the low number of employees

Airbnb

a. Strengths
- it appeals to the more “free-sprit”, their website makes it easy to book the day before
arriving and the ability to stay in almost any location.
- giving the consumer all the power, if they want 4 bedrooms, a kitchen, or to rent a room
from a large family
- their idea of local authentic experience.
- an opportunity to stay or “live” in an actual house/apartment.
b. Weaknesses
- does not have operational control therefore the experience is inconsistent
- endure that their customers are in the safest areas and hosted by the safest hosts.
- Cleaning standards not uniform
- Meeting and group friendly facilities and services are not available

2. How has the consumer changed and how does Airbnb’s customer value-proposition meet this
change?

How has the consumer changed?

- Instead of focusing on ownership like in the traditional economy, consumers seemed to prefer
sharing or renting from luxury watches to clothing, cars, houses, apartments and so on.
- Not owning- assets seemed to be on the rise.
- have desired a community and a closer relationship with the host and there to be support for
this assertion.

How does Airbnb’s customer value-proposition meet this change?

- a community-based, two-sided online platform that facilitates the process of booking private
living spaces for travelers: enables owners to list their space and earn rental money and
provides travelers easy access to renting private homes.
- peer- to- peer rating system greatly minimized the otherwise significant task and expense of
Airbnb staff accessing and rating each individual participant within Airbnb’s platform.

3. What key factors may determine the success of Airbnb?

- Creating and combining the two elements of a business model: customer value proposition
and profit formula (Sell the Experience rather than the venue).
- Airbnb confirmed its position in hotel industry by applying sharing economy.

4. What recommendations would you make to Airbnb to improve?

- Has at its fingertips a wealth of data that it’s not yet leveraging as well as it could. Hosts, guests,
and Airbnb can all benefit from the company better mining data and making valuable insights
available to users.
- Help host price their property: has a massive collection of data around rental prices.
- Flexibility in dates: Give guests with flexible itineraries the option to add a plus-or-minus range
to their requested dates.
- Should build and release a feature to address the instances of someone requesting a booking
that was listed as vacant but then getting informed that it wasn’t available.
- Should formed a team of engineers, data scientists, researchers and designers whose full-time
jobs are to promote diversity and eradicate racism and bias from the Airbnb platform.
- Provide more services to its customers than just providing a bedroom.