Pestle Analysis of Airbnb PDF

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PESTLE Analysis of Airbnb

1. Political Political factors that are responsible for affecting a company include a country’s laws and regulations, political stability, taxation system and more. Unregulated housing laws Housing laws of different countries is one of the main political factor faced by Airbnb. Airbnb operates by complying with the housing laws of the countries from where it operates. Airbnb is a unique business, where people offer to rent to rent their spare homes, apartments or rooms to strangers. However, the company has faced legal issues because some of the locations listed on their portal did not follow the state housing laws and regulations. For instance, in some states, an owner must also live on the property to legally rent apartments for a short period of time. Additionally, these locations are required to pay hotel or tourist taxes when renting out their homes during the holidays. Instead, it was found that people started buying houses/ apartments with the sole intention of renting them for Airbnb which ultimately led the organization to face legal issues. Airbnb has faced fines and court proceedings in Barcelona, New York, and New Orleans. Because they’ve failed to follow local tourism laws. Airbnb needs to ensure they are following each state’s housing guidelines. Otherwise, they open themselves up to further legalities. Opposition from local governments and residents Airbnb has faced a lot of opposition and criticisms from the local governments and local residents. One of the major concern raised by the local communities was the significant increase in the local housing prices. People started investing heavily in apartments/ houses in the main cities for renting it for Airbnb. This has made it difficult for the locals to buy properties and eventually led to an increase in the homelessness and the local council had to deal with it. There are evidences to support this viewpoint. For example, a study conducted in Los Angeles found that in 2014, “almost half of Airbnb listings were clustered in seven neighborhoods, where rents increased a third more quickly than the city average. The wider US study suggested a 10% increase in Airbnb listings led to a 0.42% increase in rents and a 0.76% increase in house prices.

Deconstruction of Airbnb Business Model Canvas. 1. Key partners Definition: Key partners describes the list and network of suppliers and partners that are crucial for the business model to work. (Osterwalder, Pigneur, & Clark, 2010)

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Hosts who give rental accommodation Hosts who offer experiences Investors/venture capitalists like Y Combinator, Sequoia Capital, Google Capital, Tiger management, etc. Corporate Travel Partners & Managers. Insurance companies (Home protection) Professional Photographer Services Info Tech- Experts- Website designer, web master, hosting company, Database management Outsourced Customer service representatives Local/regional Interior Designers Local/regional Government- Collabo with a government of major tourism attractions and buy their outdoor ad spaces, then post Airbnb ads Payment Processing Channels/Mediums- Major bank/credit card, Venmo/Paypal Local/regional Real Estate Agencies- for renting out their properties like hotels for extra revenue Lifestyle Media Sources- TV, Radio, Internet, Printed material channels covering or featuring lifestyle/ travel editorials Local/ Regional cleaning company

(Note: We can cut down or combine some of the points mentioned above)

Airbnb brand; - Platform; - Information about hosts and travellers (global network); - Human capital (e.g., marketing

professionals, IT specialists, Airbnb community members). Airbnb brand; - Platform; - Information about hosts and travellers (global network); - Human capital (e.g., marketing professionals, IT specialists, Airbnb community members). Key Activities Definition: Key activities describes the most important things a company must do to make the business model work. (Osterwalder, Pigneur, & Clark, 2010)

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Updating the platform and development Sales and Marketing Online Advertising, Offline Advertising, Collaboration with Celebrity agencies and sponsorships

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Customer service Research and Development Collaboration with celebrities and local vloggers/bloggers Expanding the number of hosts Public relations management

Key Resources Definition: Key resources describes the most important assets required to make a business model work

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Airbnb- The brand itself The website and the mobile app Guest information (global network) Employees (Marketing professionals, IT, specialists, Airbnb community members) Millions of listings from the hosts...