Case Assignment: Airbnb in 2018
-1-
Monroe College
Case Assignment: Airbnb in 2018
Dr. Roberta Harris
MG800
5/9/2021
Case Assignment: Airbnb in 2018
-2-
In these times as we watch the growing importance of social media and technology. The
need to stay connected becomes greater with every new platform. This need has transformed
within business creating new business models based on sharing, collaborating and lending with
strangers. Airbnb was able to see the viability in the sharing economy and used that model to
achieve success. Airbnb was founded by Brian Chesky and a friend of his when they decided to
rent out their apartment to guests while a local convention was in town. It was from that
experience that they were able to expand on that concept that began in their own apartment and
develop it to the billion dollar room share company it has become. The company now operates in
over 190 countries in its 10 year existence. Airbnb has more than 4 million listed properties and
has been valued at $31 billion. The success of their company is due to their mission of “helping
create a world where you can belong anywhere and where people can live in a place, instead of
just traveling to it”. Airbnb’s business model is centered on connecting individuals with
something to offer with others who need what they have. While Airbnb is primarily an online
platform its objective it to change the way people feel about sharing and traveling through
community. This is in far contrast to their competitors such as large hotels such as the Marriot
and bed and breakfasts. The large hotel chains may offer long standing brand recognition,
equipped staff and amenities. But they cannot cultivate the specialized experience that Airbnb
hosts can curate. Bed and breakfasts have a more homelike feeling with workers that feel
genuine and helpful. But they do not have the same level of brand recognition as large hotel
chains.
The concept of peer to peer room sharing was a brand new business model that entered
the hotel and tourism industry. Airbnb was not welcomed and was met with resentment by city
officials, hotels, motels and bed and breakfasts. As the room sharing platform continued to grow
Case Assignment: Airbnb in 2018
and expand expeditiously. Many of the traditional brick and mortar establishments were up in
arms because unlike Airbnb they have to adhere to regulations and taxation. The regulations
concerning Airbnb have been heavily discussed as political, economic, social, technological,
environmental and legal factors (PESTLE) can impact business operations. Airbnb has impacted
political competition amongst various state governments, cities and the hotel industry over short
term rental regulations in the United States. In cities in both Europe and America they have
violated laws regarding tourism and illegal hotels. This has led to adaptation of new regulations
imposed on any room sharing rentals in many different countries. Since Airbnb is an
international business they have to abide by the laws present in each country they operate in.
Airbnb enables individuals who want to offer their homes or spare rooms in exchange for
monetary gain to earn an income which impacts the local economy. In cities where there isn’t
