Airbnb: An Innovative Empire

Executive Summary
Airbnb is an online platform which provided homes, flats and other places for rent
and lease depending on what the customer wants. They don’t own any real
estates or properties but acts as a broker between the customer and property
owners and collect commission on that deal. They operate the deals using
websites and apps and are available in all mobile, computer, watch and tablet
platforms.

1)Market Capitalization of Airbnb

Airbnb has one of the best business models in the world. Airbnb has been using
the asset sharing model which is reason why Airbnb has high revenues and high
profits. It has the largest market capitalization in the hotel industry in the world.
One of the main reasons for this is the early adoption of technology and best
business strategy used to conquer the market.
Another system the Airbnb used is the peer-to-peer rating system which is used
to rate the guest and properties owners, so Airbnb knows where the problem is,
and they can solve the problem quickly.
2)Some threats facing Airbnb are-
 Strangers hosting homes can lead to dangers and legal violations
 Airbnb fining hosts can lead to reduction in people hosting homes and can
lead to losses.
 Issues with local housing and rent market in each country as each country
has different laws and regulations so it can lead to legal issues.
 Social media and horror stories about Airbnb houses can lead to decline in
business.
 Illegal listing in Airbnb as some can be fake.
 Guest leaving the homes uncleaned and dirty after using can destroy the
business reputation.
3)Competition of Airbnb
 9flats.com
 wimdu.com
 clickandrent.com
 travelrent.com
 tvil.ru

4)Strengths of Airbnb
 It is cheap than hotels
 Low operating cost
 Well established brand and public image.
 Huge growth potential worldwide
 Huge investing potential due to its huge global presence

5)Weakness of Airbnb
 Violating housing laws
 Poor host can destroy Airbnb reputation
 The business model is easy to replicate
 Internet Connectivity and app issues
 Payment issues
6)Key factor that determine Airbnb success

 Using of Click through rates which will result in lower prices

 Acceptance and commitment rates
 Listing copywriting and language usage of listing
 Messaging and booking response rate of customers and hosts
 Featured images of room, homes and hotels.
 Global payment
 Online platforms and apps
 Reliability and scalability

7)Recommendations to improve Airbnb

 Help host price their property by themselves and not by Airbnb
 Flexibility in choosing the number of days to stay by the guest and not by
the Airbnb.
 Improve the user interface experience in the apps and online platforms
 Put realistic photos of hosts and listing
 Create an automated messaging system for the guests to use when host is
not available.
 Instant booking deals and promotions
 A guide to Airbnb app and online platforms
 Improve Customer service to solve any problem of the guest and host.

8) How has the consumer changed and how does Airbnb’s customer value-
proposition meet this change?
Consumer has changed a lot due to advancement in technology as people want to
spend less and want more services for less money. Airbnb meets this change by
giving consumer homes at low costs and providing more online services than
competitors.