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Pestel Analysis Of Airbnb

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1. Introduction of Airbnb

Airbnb is an online platform where people can list and book their accommodations all around the world. It is founded by Nathan Blecharczyk, Brian Chesky and Joe Gebbia in the year of 2008 in California. The types of the accommodations offered in Airbnb vary from an apartment, a villa, a castle to even a tree house. 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 …show more content…

PESTEL Analysis

In this study, the PESTEL analysis will be applied to analyze how Airbnb interfaces with the six different factors in the Singapore context – political, economic, social, technological, environmental and legal levels so as to detect the opportunities and threats in the general environment.

2.1. Political …show more content…

A big initial capital is not needed to enter the industry. The economy in Singapore is under good development as well as the tourism industry is highly developed. These factors would encourage more competitors to enter the market and compete with Airbnb and the threat of the new entrants is high. Airbnb would need to develop its brand as a credible brand and improve its service constantly to compete with other new entrants.

3.2. The Threat of Substitutes

The possible threats for Airbnb could be Couchsurfing, Hostelworld as well as hotels. Airbnb could be seen as a fee-charged version of Couchsurfing. However, Couchsurfing doesn’t fall under the regulations of HDB and URA since it is free of charge. People may turn to Couchsufing for the same experiences for free. Hostelworld could be a substitute for Airbnb because it offers cheaper accommodations than Airbnb which could be favuored by the students or budget travelers. The threat of substitutes is thus high for Airbnb. 3.3.

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