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Airbnb Strategic Analysis

Introduction

Airbnb is an international marketplace specializing in hospitality by offering arrangements of temporary and short-term lodging in cities around the world, most commonly for tourists and individuals traveling to the city for business. The platform was revolutionary and heavily disrupted the established hospitality industry, challenging major hotel chains while providing an opportunity for property owners to earn additional income. The purpose of this report is to evaluate Airbnb’s growth and strategic positioning by considering a broad industry analysis (PESTLE and Porter’s 5 Forces), internal analysis (SWOT and VRIO) highlighting a competitive advantage, and a discussion of strategic options for the company.

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Business Background

The company had its humble beginnings, when the co-founder Joe Gebbia and Brian Chesky, designers by education, had the idea of offering their apartment for visitors for an overcrowded design conference in San Francisco led to all the nearby hotels being fully booked. This laid foundation to the business model of Airbnb which connects hosts of various locations that can range from cheap apartments to entire mansions with potential renters. Hosts establish the cost per night and may offer additional perks or rules for the renters. Meanwhile, consumers choose the properties which best fit their price range, location, and amenities. Airbnb charges up to 15% of the booking that is included in the overall cost and split between hosts and travelers (Angwin, 2017).

As the Airbnb concept gained popularity and the company expanded to over 8,000 cities worldwide, it was able to utilize economies of scale to become a monopoly and leader in the segment of short-term private property rentals and in some cases exceeded major hotel chains. The company’s valuation in 2019 prior to its IPO was noted at $35 billion (Sherwood, 2019). It is currently experiencing a downturn as most industries related to tourism and travel due to the COVID-19 pandemic; however, the company remains in a solid position and will likely rebound once travel resumes. Airbnb is attractive to both guests and hosts as its listings are verified, offer a wide range of quality and price in addition to being available around the world, and have a more personal touch while being generally lower-cost than hotel offerings. Airbnb positions itself in the market as the direct competitor to the hospitality industry known for overpricing while also offering the personal touch of “belonging” as part of its messaging. The company wants its customers to find a ‘home’ outside of the home when traveling and finding belonging and authentic experiences, a critical strategy addressing the shortcomings of the impersonal hotel industry. As a company, Airbnb is continuing to seek expansion to more cities, provide more possibilities that the foundation business model can offer, and cross-sell experiences to enhance the quality of stay for travelers (Ghaffary, 2019).

Industry Analysis

Airbnb operates in the lodging and hospitality industry as its primary sector, while also remaining a technology company due to its online marketplace platform. Both industries are extremely competitive and challenging. The hospitality industry is highly volatile and low-margin, depending on traveling behaviors around the world and consumer service trends that are constantly shifting. Meanwhile, the technology industry requires high investment and presents technical challenges on multiple levels. Both industries are susceptible to socio-economic environments as well as political regulation. Airbnb has managed to find success navigating the industry and external environments that will be examined in this section.

PESTLE

Political Airbnb is a unique business that brought forward the concept of the sharing economy, which has not yet been well regulated. Furthermore, many locations have differing laws on housing and renting as well as temporary leases. Taxation has also become a complex issue as Airbnb is facing fines and lawsuits in various cities around the world for failing to follow local laws for tourism, lodging, and taxation. The business model that Airbnb utilizes conflicts with many regulatory guidelines, nor are their protection mechanisms in place for consumers or hosts. The company is forced to consider local policies and constantly participate in lobbying or court trials while policies are developed.
Economic Airbnb is a leader in the shared economy space, which means it must consider the economic needs of both guests and hosts as well as how it influences local economies. Being in the lodging and hospitality industry, Airbnb is strongly influenced by economic factors such as consumer spending on travel which commonly drops significantly in times of recessions. The company is also in economic competition with hotels, making it intimately connected to the industry and economic forces affecting it. Other factors to consider are housing and renting costs that vary based on economic tendencies as well as potential changes in currency fluctuations.
Social From a social perspective, Airbnb relies strongly on the trend for authentic and cheaper non-traditional lodging rentals. Notably, this may be a social trend that passes through the years. The popularity of the platform, particularly its presence on social media and the hosting community is dependent on a variety of social factors. The concept of the sharing economy, particularly for lodging, is highly dependent on social responsibility and trust. The company’s reputation also plays a role in this context. Without acceptance and stability of said social factors, Airbnb would not be able to engage a large platform. Furthermore, considering that Airbnb operates in more than 190 countries, there are various cultural factors to consider, including respect for hosts and ensuring that cultural norms are not violated in the process.
Technological Technology is the foundation of the Airbnb platform. Stability and the high quality of its internet services are key to Airbnb operations for both the website and application. The millions of people that rely on the platform to communicate their plans and make arrangements require that there is the security of information, backup of data, and consistent uptime. Furthermore, new technologies such as additional features on the platform, matching/search algorithms, and implementation of artificial intelligence are key to the success of Airbnb as an online marketplace that remains informational and relevant in the sector to its traditionally younger users.
Legal Airbnb must meet the legal regulations and requirements of the numerous jurisdictions where it operates. There are also unique and different laws for guests and hosts independently. Airbnb must have its own terms and conditions for its users while also considering the minutia of legalities in areas of operation. Airbnb must also consider and abide by corporate laws at its headquarters in the United States. Airbnb also faces several legal challenges in regard to misuse or lack of safety at some of the properties that were hosted on the platform. Some hosts misuse the platform in violation of local laws as well, such as real estate owners posting listings of apartments meant for permanent residence in New York (Coldwell, 2014).
Environmental Airbnb uses a home-sharing model which has been attributed to a beneficial environmental impact in comparison to traditional hotels. The concept allows reducing waste and energy usage, leading to a long-term positive impact on the environment. The sharing economy helps in making the best use of existing resources and traveling in a more ecological manner. Airbnb also uses its large platform to spread awareness regarding environmental sustainability for its hosts and guests. The company operates following all local environmental regulations.

The PESTLE analysis demonstrates that Airbnb as a company and the industry faces a myriad of factors. Major factors to consider are regulatory guidelines which are both political and economic, significantly challenging the legal elements of Airbnb as a revolutionary shared economy giant. The business model is beneficial from a social, technological, and environmental perspective, but faces barriers in policies and regulation, alongside dependence on economic spending of consumers. As the shared economy model expands to other sectors, it is likely more progress will be made in terms of policy, but housing, lodging, and tourism remain some of the most challenging policy and legal aspects in any jurisdiction.

Porter’s 5 Forces

  1. Threats of new entrants – weak force. The threats to a new entry into the peer-to-peer lodging sector is virtually non-existent due to the challenging barriers to entry. The only potential entries to the industry are already existing companies in the space, attempting to expand into the online marketplace model. Several aspects prevent new entrants. First, the time of entry for the sector has passed, with the market share already overtaken by Airbnb and others following the explosion of e-commerce and online services in the late 2000s. Second, the capital requirements are significant that without major investments companies would not be able to tackle the challenges of creating an online platform and customer acquisition, a hurdle that Airbnb had barely been able to overcome without any competition in place. Finally, there are legal and regulatory barriers, which Airbnb struggles with still in order to operate this type of business in cities around the world, that entails legal costs and lobbying power (Sherwood, 2019).
  2. Bargaining power of buyers – moderate force. There are few substitutions to the peer-to-peer lodging service that Airbnb offers that ensures an authentic and direct communication experience. Hotels are indirect substitutions while other existing platforms either do not have hosts or do not allow such contact, removing the highly authentic feel of belonging. However, consumers are the sole profit for Airbnb and their satisfaction and participation allow the platform to exist. The size and concentration of buyers are much higher than suppliers in the global hospitality industry, allowing buyers to dictate certain terms in terms of satisfaction and demands, but at the same time, the limited supply is also imposing certain limits on bargaining power.
  3. Bargaining power of suppliers – weak force. Suppliers in this case are represented by hosts who post their listings on the Airbnb platform. Due to the popularity and outreach of Airbnb, hosts have few other alternatives in order to ensure their listing translates to bookings by guests. Any suppliers working with Airbnb, either hosts or 3rd party service providers, cannot contractually operate on other platforms. Furthermore, Airbnb holds significant control over suppliers, requiring an operation, even at a loss if a booking is canceled. Suppliers on the platform cannot form any sort of union to advocate for their demands. Airbnb’s brand name and influential power in the industry provide hosts with little choice. However, it should be noted that the company takes extensive steps to communicate and listen to the concerns of their hosts to remain a welcoming and inclusive platform that hosts are happy to participate in with their listings.
  4. Threat of substitute products or services – weak to moderate force. This element depends on what is perceived as substitute products. Traditional hotels are indirect substitutes to Airbnb but will be the first alternative for most consumers. Consumers have no switching costs in between various alternatives which creates pressure on Airbnb. At the same time, the monopoly on the authentic peer-to-peer lodging service that the company holds prevents the customers seeking that experience from looking elsewhere since listings on other platforms are significantly limited or niche, eliminating the aspects of finding the best accommodation based on price or needs.
  5. Industry rivalry – moderate to the strong force. The rivalry in the combination of the lodging/hospitality industry and the peer-to-peer rentals sector is relatively strong. The rate of growth in the industry has been increasing prior to 2020 with many existing players seeking to increase their market share. Hotels began shifting their offerings and dynamics while existing platforms began offering peer-to-peer rentals. There is a diversity of competitors which have emerged in their positioning as direct competition to Airbnb or taking away niche consumer segments that Airbnb has not yet reached. HomeAway positions itself as a refined version of Airbnb’s platform while competitors like Flipkey focus on group bookings to destinations. Airbnb’s strong brand equity which is globally recognized and has become synonymous with peer-to-peer rentals is the strong force keeping down the pressure of industry rivalry for the company. The name recognition commonly translates to goodwill and higher sales volume for Airbnb, more so than most of its competitors.

Competitors

While Airbnb remains the primary leader and mainstream name in short-term and peer-to-peer property rentals space, various competitors have risen to challenge the company seeing the success of the business model and shared economy trend. First, it is important to consider that being in the lodging and hospitality industry, Airbnb indirectly competes with hotels. When hotels began to lose market share, although they had little flexibility on their traditional business models, the facilities shifted focus. The lodging industry has always been based on scarcity and financially benefited from it. With the rise of Airbnb, the supply of lodging increased, particularly surrounding large events. Hotels have taken strides to mimic the benefits of Airbnb, including offering a more personal feel and service, bundling services, monitoring market dynamics, and using data to track capacity and traveler behavior. This has allowed the industry to remain competitive in the context of the modern hospitality industry (Aznar et al., 2018).

Meanwhile, Airbnb has direct and indirect competition in the context of online marketplaces for peer-to-peer rentals. The biggest competitor to Airbnb is a company named HomeAway with one million listings globally which also runs various national subbrands including VRBO, vacationrentals.com and OwnersDirect in the UK. HomeAway has virtually a similar business model to Airbnb, but guests usually do not directly interact with hosts. Traditional vacation platforms that usually book spaces for hotels have also entered the space. Major websites such as Booking.com and Trivago are offering serviced apartments, vacation homes as well as bed and breakfasts and hostels. They offer significantly more inventory than Airbnb and the listed properties are professionally managed, having no issues with hosts for travelers (AirbnbReview, 2016). Therefore, despite Airbnb having a strong brand name in the space, a variety of other platforms and competitors either seek to take away the market share or offer their own take on the peer-to-peer rental experience, most of them being relatively successful with large user bases.

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Internal Analysis

SWOT

Strengths
  • Strong brand name equity and recognition
  • Wide range of product offerings
  • Strong social media and marketing presence
  • Cheaper and more authentic alternative to hotel accommodations
  • A large number of listings on the platform
  • The trustworthy and tight-knit community
Weaknesses
  • Marketplace model leads to hike in prices
  • The business model can be easily replicated
  • Constantly challenged by local regulations
  • Company reputation depends on hosts which may not always follow guidelines.
  • Company success depends highly on brand reputation
  • Expansion to new markets requires a constant influx of cash
Opportunities
  • Improving cooperation with cities in legal and economic aspects
  • Improving communication with the community as well as between hosts and guests
  • Provide additional types of offerings that appeal to various niches and populations
  • Improve security, safety, and quality of host properties
  • Appeal to business travel and older audiences who may not resonate with the platform currently
  • Mobile use
Threats
  • Competitors in the form of similar platforms and hotels
  • Legal aspects challenging operations
  • Negative reputation caused by incidents or disruptions associated with Airbnb
  • Decrease in travel or listings destroys the value of the platform

Airbnb has significant strengths, the main one of which is brand name recognition which is synonymous with the peer-to-peer rentals segment. The brand has a good reputation, has the trust of the public and its community, and remains a major consideration for travelers. This is due to the customer-first approach that the brand has taken, offering support and ensuring the quality of its listings as well as strong marketing efforts, including a social media strategy that builds on the strengths of the company in terms of authenticity. The company remains the leader in the number of listings which allows travelers to see significantly compared to hotels. However, through years of operations, there are some weaknesses that challenge the company. The brand name which offers the company its popularity is solely dependent on the reputation that also depends on hosts. With bad press, the company’s reputation will fall, resulting in the deterioration of trust. Furthermore, the business model is not unique since Airbnb does not offer a proprietary service or product, which has allowed other major travel sites or competitors to simply copy the model. Finally, the company continues to face legal challenges in regards to regulations, which along with host tendencies have led to price hikes on the platform, making it less affordable, a principle on which the company was founded.

Airbnb must take opportunities to expand into new markets in order to grow. This may include niche offerings as well as targeting more professional or luxury travelers along with appropriate services and accommodations. Airbnb can modify and expand its product mix to serve the customers better. In order to do this, the company must continue to improve the quality and reputation of its host properties by focusing on safety and security. Airbnb must take opportunities to enhance communication with all stakeholders including cities on legal matters, investors, and its customers and hosts to ensure competent communication of policies. The biggest threats to the company remain legal matters both from cities and private lawsuits against the company which may disrupt functional operations. The rise of competitors in the segment utilizing the shared economy model is threatening to challenge the dominance of Airbnb in the sector.

TOWS

S-O Strategies
  • Strong social media and marketing presence can contribute to improving communication among users and stakeholders
  • Existing product offerings can be expanded in their respective categories to address niche consumer needs
  • Cheaper rates and authentic feel can be marketed to business travelers and older adults if done competently
  • Utilize positive brand name associations to cooperate with cities and get them to welcome the platform to the regional markets
W-O Strategies
  • Decrease legal challenges by communicating with authorities
  • Reduce capability for replication by adding new offerings to target niche consumer segments
  • Decrease reliability on brand name and hosts by diversifying offerings
  • Protect brand name by communicating efficiently with stakeholders
S-T Strategies
  • Use strong brand equity and a wide range of product offerings to maintain an edge over competitors
  • Use community connections and social media presence to address controversies head-on
  • Prevent decreases in listings or usage by maintaining low prices on platforms to challenge hotels and potentially cut fees
  • Legal challenges can be navigated with communication with authorities that commonly support companies with positive brands
W-T Strategies
  • Ensure local laws and regulations are met before entering markets
  • Working to diversify the platform to prevent replication
  • Improve and incentivize host listings to increase the number of available properties and decrease marketplace prices

The TOWS matrix is an enhancement by proposing strategies to address various combinations of strengths and opportunities and apply them for the betterment of the company strategy. Despite the company having some glaring weaknesses and threats in terms of legality issues, business model replication, potential issues with reputation and others, they can be addressed with strengths and opportunities. The company maintains a strong brand name, good communication and social media ties, tight-knit communities, and an already respectable range of services and listings. These are a foundation for strategy in targeting the listed threats, mostly through expanding Airbnb’s platform and offerings, capitalizing on communication mediums and targeting new markets that will reinforce the company’s position as a leader in the peer-to-peer rentals space and establish the hosts as legitimate entities within jurisdictions.

VRIO – Sustainable Competitive Advantage

Resources Valuable Rare Imitability Organized
Brand equity Yes Yes No Yes
Product/service offering Yes Yes Yes Yes
Technological platform Yes Yes Yes Yes
Marketing Yes No Yes Yes
Customer loyalty Yes No Yes Yes

Based on this VRIO analysis, it can be concluded that Airbnb holds a temporary competitive advantage. The competitive advantage that Airbnb holds is largely due to its position as the market leader and the first platform to implement the peer-to-peer marketplace for rentals. This allowed it to build a loyal customer base, strong brand equity, and focused marketing campaigns. It also has a varied offering of services that are embedded into its technological platform. Airbnb has given significant focus to these, ensuring its platform is user-friendly, stable, and can make navigation of its offerings easier. The company is also continuously seeking to increase its offerings and welcome new hosts to the platform. All the elements in the VRIO are highly valuable to the organization, and some, such as the platform and services are quite rare in the industry. However, they are easily imitable and do not offer strong differentiation for Airbnb in the long term. The biggest competitive advantage for Airbnb is its brand recognition that continues to attract users and hosts to the platform, solidifying its market leadership. Without the brand name, it would be similar to many other travel booking and accommodation platforms. However, Airbnb is attempting to continuously improve and build small competitive advantages through expanding service offerings and the technological capabilities of its platform.

Internal Culture

Airbnb maintains a strong and inclusive internal culture. Based on its mission, Airbnb strongly values inclusivity and acceptance. The culture is welcoming for employees as well as potential guests regardless of worldviews. Inclusivity is a staple of the core corporate culture at the company. The firm facilitates employee resource groups and encourages employees to find connections through groups that highlight common backgrounds and interests. The company continues to grow and expand into offices around the world, hiring local staff and customer support staff to be available at all times to hosts and guests (Bajer, 2016). The international nature of the organization allows it to maintain a tight-knit and welcoming atmosphere.

Strategic Options Analysis

Airbnb has been a company for 11 years and has been largely recognized as successful with its business model and capabilities as an example that should be emulated. Albeit having been in the industry for a prolonged period and having reached extensive reach, the company continues to grow. However, the company is facing two main strategic goals which are to ensure current hosts and guests remain with the company platform as well as find methods to continue their growth.

Transformational Process

Airbnb is a unicorn start-up that seemingly came out of nowhere, taking on a rapid growth trajectory of many technology start-ups. It is important to consider that Airbnb is not directly a hospitality company, it is a technology company and its technology platform is the foundation to its success and effectiveness. The company was able to capture the zeitgeist of technology start-ups and filled a critical gap in the market when globalization was rapidly expanding. Airbnb maintained an objective of aggressive growth utilizing smart technology to fund commercial elements such as advertising and expansion. Furthermore, the brand seeks to focus on customer needs and allow hosts and travelers to emphasize their own experiences. Airbnb is never going to overtake the hotel industry since the offering does not appeal to all customers, but it will continue to increase its market share because of its focus on the customer experience and highly targeted positioning.

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Growth Strategy and Strategic Capabilities

From early days, the key to the success of Airbnb was ensuring that hosts list properties on their platform. The business model is based on a two-sided marketplace, which must have consistent supply in order to remain operational. It has also addressed key issues with expansion, where they saw demand remain low in certain areas initially, largely due to mistrust of the consumers and poorly presented properties on the platform. The company resolved this problem by hiring photographers that take an appealing image of the properties that can be exhibited on the marketplace, with higher-end properties even having professional photographers involved, a practice it uses to this day (Al-Saad, 2019).

Organizational Complexity

Airbnb maintains an open, transparent, and largely horizontal structure. Its founder and CEO Brian Chesky believes in a strong personal culture with as little corporate influence as possible to maintain passion and value. The company’s vision and mission play a crucial role in the company culture, driving its daily business. Airbnb employs individuals whose personal values resonate with the company mission and core values which is are aimed at creating a world where anyone can belong anywhere, providing healthy, sustainable and authentic travel. The belong anywhere vision is seen in the work process as employees are given significant freedoms. Airbnb attempts to connect with employees by building a healthy and responsible organizational culture. Communication is emphasized as during meetings; employees are encouraged to bring up any issues or challenges without repercussion. Events and communication take place within the company to encourage collaboration and creativity (Bajer, 2016).

IT Platform

As mentioned in the technology element of the PESTLE analysis, the IT platform is key to the company’s success. The IT platform ensures communication between users and hosts, authenticates information, matches properties to users, and other numerous options available. Airbnb has evolved multiple times, including a large rebrand, while continuously improving its online platform, interfaces, adding new products, and modifying strategies to drive the growth of the business. One of the main growth strategies as a consumer business for the company sought to understand the needs of both hosts and guests. Airbnb began offering new services such as Airbnb Plus which is targeted at a higher-end hotel-like tier of accommodations that offer additional services, quality checks, and the existence of certain amenities on the property. The company also cooperates with boutique hotels and bed-and-breakfasts, enticing lower listing fees but expanding the availability of choices for travelers (Maliczowska, 2015).

Consumer Base

The company also capitalizes on the values that its customers perceive, which are commonly lower prices for significantly more space. As said by a partner at Hamilton Hotel Partners, Frank Croston, “Consumers will do what they always do for all other purchases. They will look on social media, TripAdvisor and so on. They will… shop on price. If you are choosing between a regular hotel room and accommodation owned privately, the value proposition might be quite compelling from a consumer’s point of view” (Maliczowka, 2015). Airbnb is able to differentiate itself because of its highly engaged community. Both travelers and hosts rate each other, establishing communication and building trust for both sides. Since travelers do research online before contacting vendors, and with the majority of buying decisions already made, the transparency and highly informative nature of the Airbnb platform makes it a perforce marketplace for consumers.

To attract a larger client base, Airbnb offers specialized locations as well ranging from mobile homes and tree houses to beach houses, that can be found based on customizable choices such as events (i.e. weddings) that the guests may be interested in. As part of its growth strategy, Airbnb acquires companies that may benefit its mission. For example, it acquired its UK-based competitor prior to the London Summer Olympics in 2012, tremendously increasing revenue. Recently it has acquired Luxury Retreats, gaining the resources and expertise to expand into the luxury ultra-rich segment for custom experiences and world-class service. Thus, the platform is seeking to serve all levels of the socio-economic consumer base and provide offerings but capitalizing on economies of scale at lower levels while taking advantage of higher fees for high-end properties (Hunter, 2015).

Despite Airbnb clients often citing cost savings as the primary reason for choosing host accommodations over hotels, research shows they spend more because their stays are extended, as well as contributing more money to local economies rather than corporate hotel chains. While at first, there was skepticism around a shared economy for something as private as home accommodations, it has become an open and comfortable element of the peer-to-peer network (Maliczowka, 2015).

Key Strategic Positioning and Marketing

Airbnb is a successful hospitality and accommodations brand that has introduced and taken advantage of the sharing economy, turning the industry upside down. It is a simple idea of peer-to-peer accommodation rental via a cloud technology problem. The sharing economy is based on putting independent buyers and sellers together and has been integrated into a variety of industries ranging from car-sharing (ZipCar) to general sales (eBay, Craigslist) or investments (Kickstarter). This is a critical aspect to Airbnb’s positioning which emphasizes its challenge to the corporate status quo in the hospitality industry and promotes an ‘authentic’ experience with Airbnb.

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Recommendations

In terms of Airbnb’s growth strategy, the company remains solidly consistent and achieves excellent results in terms of consumer acquisition and creating supply in all segments. However, Airbnb has struggled with minor particulars that are the key to the service and ultimately affect its reputation, these being quality and safety. It is fundamental to the mission of Airbnb which is based on trust. Some bad actors and highly public events including Airbnb rented homes have caused an erosion of trust for both hosts and guests of the platform. The platform has implemented and will continue to provide 100% verification of properties, neighbor reporting hotlines, and human review of high-risk areas. Airbnb will also benefit from quality standard enforcement such as safety, basic home amenities, and cleanliness in order to compete with hotels as without a guarantee of safety and quality, guests are not going to be satisfied or trust the company (Airbnb, 2019).

Despite Airbnb being a globally recognized brand, even by those who have never used it, there are marketing opportunities of which the company takes advantage. Airbnb may benefit significantly from using its large base and exposure to partner with certain brands for commercial interests. Particularly in the properties that are more hotel-like, Airbnb directly challenges hotel chains that consistently use exclusive brand deals on elements ranging from shower soaps to drinks in the room fridge. That can bring significant revenue to the company that has largely attempted to remain independent. While there are benefits to this, as part of its ‘belonging’ marketing platform, Airbnb needs to shift its marketing strategy, It may benefit significantly from using user-generated content in its extensive content-marketing efforts. Approaching user content marketing competently can lead to greater brand awareness, feel authentic, attract new customers, and strengthen relationships with the existing community.

Strategic Options

Airbnb must prioritize a range of strategic options. Despite the company having a significant advantage in the segment of the peer-to-peer market for living spaces, it must maintain a competitive advantage and ensure optimal positioning to continue experiencing financial stability and growth. First, the company must increase usage and expand in both existing and new markets. Despite Airbnb’s widespread popularity, there are millions of untapped cities and regions where the platform is not well-known, either due to local competition or language barriers. Advertising focus should aim at providing localized service and educating the population about the peer-to-peer marketplace and collaborative consumption which is a unique business concept to this day.

While Airbnb is unique, there is no specific factor that provides a sustainable advantage, it simply was able to utilize first more advantage and aggressive expansion to reach its place. Therefore, the company should continuously focus its resources to develop offerings and strategies that differentiate it from competitors, otherwise, it may quickly lose its traction. The accommodation rental market is similar in many ways to hotel rental. Airbnb should integrate its platform with other external outlines, forming potential partnerships to bundle goods with its accommodations. Partnerships can be formed with other platforms such as travel and airline agencies, review services, cleaning services, and car rentals among others. By integrating platforms, it is possible to promote collaborative consumption and integrate processes that can lead to large collective savings, for both the company and consumers.

Conclusion

Airbnb is a highly unusual company that revolutionized an established industry with its peer-to-peer marketplace for short-term rentals. It quickly became an industry leader while challenging many conventions. Nevertheless, the company is still affected by various industry influences and must continually adapt to remain highly competitive. The company successfully navigates competition with other platforms as well as the traditional players in the hospitality industry, whilst being a technological company. Internal analysis shows that Airbnb has a strong competitive advantage, capabilities, and culture to address any challenges and build on its strengths. Strategic options analysis discusses Airbnb’s strategic approach and positioning that has been successful but can be improved on various elements to ensure the company is successful in the long-term in both domestic and international markets.

References

Airbnb. (2019). In the business of trust.

AirbnbReview. (2017). Top 10 Airbnb competitors and alternatives 2020 (updated). Web.

Al-Saad, T. (2019). Airbnb’s Growth Strategy: How they attract and retain 150 million users.

Angwin, D. (2017). The rise of a unicorn – Airbnb. Case study.

Aznar, P., Sayeras, J.M., Segarra, G., & Claveria, J. (2018). Airbnb competition and hotels’ response: The importance of online reputation. Athens Journal of Tourism, 5(1), 7-20.

Bajer, J. (2016). On culture: An interview with Mark Levy, head of the employee experience at Airbnb. Strategic HR Review, 15(6), 278-279.

Coldwell, W. (2014). Airbnb’s legal troubles: what are the issues? The Guardian.

Ghaffary, M. (2019). Marketplace checklist: How Airbnb built a $35 billion business on its brand strength. Forbes.

Hunter, M. (2019). Airbnb launches $1,000+ per night luxury rental tier. CNN.

Maliczowska, E. (2015). Learning from Airbnb: positioning, customer experience and cost.

Sherwood, H. (2019). How Airbnb took over the world. The Guardian.

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