Airbnb Business Model 4k1r2i

AIRBNB BUSINESS MODEL AIRBNB: Business Model Development and Future Challenges

The CASE • In 2007, the founders of Airbnb were looking to solve a problem and ended up transforming their idea into a $10 billion company • What started as a quick website to an overnight stay on their apartment airbeds eventually grew into an online accommodation booking business that spanned the world • Airbnb used its business model to carve out an extremely important space in an already crowded industry • However, along with success came challenges in of the scalability of its business model • In 2014, Airbnb was also facing legal challenges by state attorneys general that could make its business model suspect. The founders had to decide whether to defend their business model in a court of law and in the court of public opinion, or change it

Problems • How to leverage Social Media better? • Scaling model? • Industry Landscape - Competitors

• Legal Issues

Competitors Copycats

Competition Vacation rental

• Over 500 imitator sites  future threats • Some sites are backed by investors in EU market  then sell back to original founders (Ebay, Groupon) • Look and felt like Airn BnB, even copy listing from AirBnB • Using deceptive marketing practice • Expanding using substantial upfront capital • Heavily funded sites • Owned by TrpAdvisor and focus on vacation rental • Aimed at families and individuals • Use fund to acquire other websites • Strong-arm the competition then sell out

• Existing large sites: Hotels.com Travelocity • Focus o and dominate hotel booking • Use capital to take over smaller sites to cater different segment and One-Stop price advantage (give awards if found cheaper price) Vacation Services

Competition and response to competition through Stakeholder Management

• Competition from the peers (same and different geography) • Vacation rentals (HomeAway, VRBO, Flipkey, etc.) • Hotel aggregator sites (Hotels.com and Travelocity)

• Address customer and host concern (24/7 , liability guarantee, s) • Fostered engagement between stakeholders (encouraging interactions between host and guest and Vayble) • Fast, easy booking (website improvement) • Expose imitator sites: To gain customer loyalty and feel like they part of Airbnb

Face competition with stakeholder’s involvement to get competitive advantage

Recent Legal Issues • Unlike hotels and lodges, there is no defined set of laws for renting residential properties for less than 30 days • This was hurting hotel business and government was loosing tax share on the business taken away by Airbnb • This lead State of New York to issue a Subpoena • This subpoena was made public and was received with strong voice of displeasure (similar to what Uber does)

Future Plans • Infinite future opportunities in of allowing people to put-up anything for rent – • Boats • Experiences • Tailor made tours

• Missteps – • Unofficially targeting competitor's source of Listing