Airbnb was established in 2008 in San Francisco, California, by its founders Joe Gebbia, Brian Chesky and Nathan Blecharczyk, who were not able to find any free rooms in a hotel while attending a conference. As a consequence of that, the idea to offer private rooms online emerged, where clients could book them easily via their smartphone, tablet or computer. ‘On one side the platform enables people to list their available space and earn extra income in the form of rent. On the other, Airbnb enables travelers to book unique home stays from local hosts, saving them money and giving them a chance to interact with locals. Catering to the on-demand travel industry, Airbnb is present in over 190 countries across the
Individual Assignment Akim Tahirov Global Corporate Strategy Instructor: Professor Stuart Dixon EMBA 2017 ADA University & MSM Baku 2016 CONTENT Executive Summary Introduction Industry overview Company overview and history Airbnb international expansion Business Model, Mission and Value External analysis Macro environmental analysis (PESTEL analysis) Competitive forces (Porter’s Five Forces) Internal analysis Business Strategy (Cost leadership) Corporate Strategy (Mergers and Acquisitions) RECOMMENDATIONS REFERENCES Executive Summary Company overview and history Airbnb is an online marketplace connecting travelers with local hosts. On one side, the platform gives an opportunity to people to submit their available rooms or apartments and take profit from rent. On the other side, Airbnb enables travelers to book unique accommodation from local hosts, saving them money and giving them a chance to interact with locals. Airbnb was founded in 2008 in San Francisco, California by Joe Gebbia, Brian Chesky and Nathan Blecharczyk and continues to be privately owned. In 2009, Airbnb was able to join Y Combinator’s incubator program.
Marriott International vs. Airbnb Although Marriott International has a competitive advantage of being the largest hotel company in the world, experiencing years of remarkable growth with the acquisition of Starwood Hotels, and ranking at number 163 on this year’s Fortune 500, it operates in a highly competitive market. The recent success of Airbnb, for example, has had major effects on the hotel industry as it has quickly become a threat. Airbnb, founded in 2008, is an online hospitality service that provides short-term lodging and unique travel accommodations around the world with more than 3,000,000 lodging listings in 65,000 cities and 191 countries. Having a value of over $10 billion, Airbnb “exceeds that of well-established global hotel chains like Hyatt” (Hospitality Net). This proves that this online service is significantly surpassing these stable hotel chains that have been competing in the industry for over 60 years.
This acquisition allows Expedia and HomeAway to deliver best-in-class experiences to an even wider set of travelers all over the world. Management team pitched well by giving respect for the HomeAway team and the business they have built. With their expertise in powering global transactional platforms and industry-leading technology capabilities, Expedia look forward to partnering with them to accelerate their shift from a classified marketplace to an online, transactional model to create even better experiences for HomeAway’s global traveler audience and the owners and managers of its 1.2 million properties around the world. Also they added about that they have long had their eyes on the fast growing ~$100 billion alternative accommodations
This created more than $30,000 for the company and also appealed Y Combinator’s Paul Graham, who invested $20000 to meet new users and establish their market in New York. After three months they had a gainful business model to attract West Coast investors. Since then the site has prolonged from air beds and shared spaces to private islands, igloos, tree houses, castles, tipis, boats and many other properties. (HELM, 2014) Marketing strategy of Airbnb: - Airbnb recognized that they basically need two components host and traveler and the only medium to collaborate host with traveler was to enhance the digital media aspects in which Airbnb is dealing. So a clever strategy was implemented involving two digital marketing.
An Airbnb I stayed at in Tokyo was just across from Sugamo JR Station, a train station very close to the heart of Tokyo, which saved us around 51,250 JPN (500 USD) in accommodation. Despite it's convenience, it was very compact and not the most spacious of living arrangements, with a small futon area to sleep and the smallest of bathroom space. However, an additional benefit to using an Airbnb is that you tend to have extra amenities like your own kitchen and washing space - things that aren't available in your average hotel or hostel, as well as portable wifi and a mini television. Although compact, the apartment has exactly what you needed and cut the accommodation costs by half. This alone allows you to cut back on restaurant spending by being able to buy groceries for your apartment, souvenirs, tourist attractions, and other
These partnerships will bring increased usage, promoted traffic, and growth in revenues, that will benefit not only Airbnb but also the outside providers. When browsing for choices of accommodation providers, partnerships such as car rental services, review services, and airline agencies are all practical options for Airbnb. Further more, the “peer to-peer online marketplace” industry also presents as potential advantage for other partnerships. With this people could then, instead of just selling their free room go on to provide other rental goods from the same host, such as, the opportunity of renting someone’s car or rent a spare digital camera. The usage of services these services can then be promoted through incorporating the two together and collectively pushing the potential of the collaborative consumption
A major conference is to be happen in the town and these two recent university graduates had used a simple website to successfully advertise their apartment as an “Air Bed & Breakfast” for conference delegates to save money by avoiding city’s high hotel prices. This concept grow slowly at first initially focusing on major events. And after enjoying some moderate success the website was relaunched in 2009 as Airbnb.com and services were expanded beyond shared accommodation to the rental of full residence. Airbnb has grown exponentially since and now their property listings rival the world’s largest hotel firms by promoting the concept “Live like a
What is the attraction of Airbnb to market segment? 7 Experience economy Experience economy was displayed by B. Joseph Pine II and James H. Gilmore in 1988 as a new economic era. They state, that in the modern society’s customers seek for memories and experiences, therefore they are willing to pay more for a comprehensive and lifelong experience than for the constantly depreciating goods and services. In the tourist and hospitality industry simple services seem to be pushed into the background. Airbnb and Cabinn share a customer segment: the experience seekers who look
In 2014, Airbnb launched a creative campaign through Instagram social media. The rule of this campaign is that each user will film a short video to introduce and attract others to visit his place, and post it on Instagram with hashtag #AirbnbShorts (Speier, K 2016). With widespread influence of social media, people could know more about the appealing regions, especially potential but less well-known area, and then completely boost the demand for travelling. Consequently, the cheap-renting service like Airbnb definitely gains more benefit as well as