Second, they could possibly expand their operations in related industries such as travel guides, partnering with airlines or car rentals, house cleaning, and travel insurance(). This could increase the number of customers using Airbnb, as well as intruding new demographics to the company. Threat: Airbnb has a simple business structure, they are a community marketplace for people to list, discover, and book unique accommodations around the world (). Because their idea is so simple, companies such as Wimdu, VayStays, and HouseTrip have easily copied their ideas. Customers may decide to use a company other than Airbnb because there are so many companies similar to it.
The offers of accommodations via Airbnb are currently available in 192 Countries and in over 34,000 cities worldwide (O 'Toole, 2014). The valuation of Airbnb, the home-rental platform, is worth of $10 billion after it raised $450 million from private investment firm TPG in 2014 (Spector, Macmillan & Rusli, 2014). The type of business of Airbnb can be categorized to social networking service which focuses on the accommodation-rental service. The concept of Airbnb is actually a sharing economy which enables the customers to become the micro-entrepreneurs at the same time. Airbnb aims at not only providing the accommodation opportunities but also the experiences for people to interact with others all around the world and get to know how the local people live in a certain city and have some culture exchange experiences with international guests and hosts.
An Airbnb experience is a more adventurous experience that lowers the traditional expectations that travelers would have regarding hotels. Even though, hotels are trying their best to be as personal as possible, the experience will not be comparable to an AirBnb experience. Hotels
Consumers have the ability to share almost anything in today’s economy, including houses, cars and clothing. You can also take advantage of the sharing economy with your next peer-to-peer (P2P), business-to-business (B2B) or business-to-crowd company. What is the Sharing Economy? Sharing brands, including Uber and Airbnb, grow every year in part because 68 percent of people like the idea of renting their resources, services and goods for a short time, and 66 percent of people are willing rent those items. These consumers understand that sharing offers numerous social, economic and environmental benefits.
However, despite of the high growing value, Airbnb is still facing a massive challenge in the current market. According to Bloomberg report, in 2015 Airbnb end up nearly with $900 million, but despite of the high revenue, the company is yet to make a profit. The reason behind this is that Airbnb put a lot of investment to expand more of their presence everywhere around the globe where today it has expanded its presence in over 34,000 cities across 191 countries globally. By this extreme expansion, Airbnb is projected to earn as much as $3, 5 billion in profits a year by 2020. There is a subtle fact that nobody had thought about before that is a low cost strategy only as long as you have a high cost competitor in your market.
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.
On one hand, there are people like Mary Dejevsky who has written the article “Uber and the “sharing economy” are leaps into the past, not the future”, that believes the sharing economy is unfair, and it’s not a positive trend, since it only benefits certain groups in society. And that especially the poor and the elderly miss out, as they primarily don’t have the technology, which allows them to access it. Personally, I understand the author 's frustration, but I must admit that I don’t agree with him. Now that the opportunity for the sharing economy is available, and people have the chance to pay less and get an experience, they should definitely exploit it. But the truth is also, it 's actually sad that it 's not everyone who gets access to it, but just because there are some people in society who will not benefit from it, that should not affect everyone
Taxi driver are also not rated on a rating system and their location is not tracked by their company. The vision of Uber (6): Uber works in more than 300 towns and 58 nations throughout the global making it the most important private company in the world. During Ubers 5th birthday
Uber may be a fast growing company, but what does the growth benefit, when they do not research the legality of potential markets? Uber risks being portrayed as arrogant and uneducated, hence if they continue to challenge the laws of countries. Undeniably, the arrogance could destroy their brand and ruin their opportunities of cornering the market, before they even have tried
Another benefit is the internet, the social media aspect makes you almost portray, reconstruct and relive their trips. Pudliner 2007. This excessive interview with pudliner makes the essence of social media much more clear as why it’s such a good tool to use. Although ones opinion may differ from someone else’s it is still a great way to advertise as there are more than one reviews available. I have spoken mainly about get a ways a and hospitality, but social media also has an intense impact on tourism as, The tourism industry is an information intense industry says: (Sheldon 1997 and Werthner and Klein 1999) It is crucial to understand in technologies and consumer behaviour that impact the distribution and accessibility of travel related information.