Airbnb Case Study 1 PDF

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Case study for Meyer's GBA 490 Airbnb Case...

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Dakota Callaway GBA 490 Airbnb Case Discussion 9 June 2021

1. The target market for Airbnb, large hotel chains, and bed and breakfasts all differ greatly. While Airbnb attracts the experience-driven travelers looking for a more personal connection, bed and breakfasts were targeted at tourists in rural areas seeking a cozy, homey ambience. Large hotels, on the other hand, sought out all segments of the travelers' market. Operating costs also varied, large hotels coming in at the most while Airbnb had the least, similar costs to that of a technology startup. Hotels competed with varying amenities, trying to attract travelers of all kinds. Bed and breakfasts and Airbnb could only offer an experience in attractive locations. Below is a table comparison of the three categories mentioned previously:

Customer value proposition

Weaknesses

Airbnb  Feedback is rated by other Airbnb users  Customer service 24/7 because of its technological platform

Hotel Chains  Names are well known because they’ve been used around for years  Offers guests amenities like pools and gyms and dining, baggage service, valet parking  Have single and multiple rooms available  Views  Can often be expensive depending on location and season

Bed and Breakfasts  Local and often right around tourists sights  Have at home feel



Prices may increase depending on demand

2. Airbnb suffered significant losses, just as its counterparts did. In response, it

implemented stricter cleaning protocols and created a fund to help long-time hosts that were suffering financially due to lost income from decreased renter traffic. While many hotels had to close indefinitely and massive layoffs were seen, Airbnb continues to trudge along. Instead of layoffs, It is offering financial aid to its hosts. 3. Large, chain hotels have great amenities, better and safer security and policies in place. They also have a room service and a quieter atmosphere, oftentimes with in-house dining. Bed and breakfasts have better access to rural areas of attraction that large hotels cannot justify the means for its expenses. They offer a home-like environment that stiff hotels cannot replicate. Airbnb can offer all of this, at a cheaper rate. While it may lack security and safety protocols, it offers a unique experience for travelers seeking adventure, whether it be in a remote mountain cabin or a large metropolitan loft. 4. Gone are the days where the everyday traveler simply seeks out a place to lie their heads. Now the typical consumer is eager to indulge in new experiences. The sharing economy is exploding, and today's tourist is ramping it up. The consumer wants to pay for the experience, rather than pay for ownership. Instead of renting the same old rooms in hotels, all carbon copies of each other, Airbnb provides a wide variety of unique rooms and environments in places hotels can't reach. They also seek a deeper personal connection with the hosts. 5. Success factors include market share and net profit. Airbnb swiftly overtook many top, long standing hotel chains. Its great success spurred these chain to take action. In an effort to buy back its lost consumers, chains invested in villas and bungalows to replicate the small mainstays Airbnb offers, especially in places where hotels are extremely expensive. In the end, a successful company needs to be liable for its corporate social responsibility, by paying the taxes its due and coordinating with local authorities to ensure all regulations are followed, while allowing for a safe environment for its customers. It must also simply make more money than its operating costs. 6. Because many competitors and local governments would be satisfied, I recommend Airbnb worked to regulate itself across the board, creating an equal playing field for all accommodation businesses. This would greatly mitigate risks and ensure its hosts and guests alike are safe from physical and legal distress. I also recommend that Airbnb...