Airbnb: Making Hospital Authentic

Case Study in Principles of Marketing

Submitted by: Ferdjaymer T. Redillas

Pauline Alexandria Go

Teofilo M. Jr Homoc

Jay Lumucso

Submitted to:

Mrs. Kristine Joyce Rodriguez

Company Profile

Airbnb is a company that provides an online marketplace and hospitality

services. The company enables consumers to lease or rent short-term lodging,
including vacation rentals, apartment rentals, homestays, hostel beds, and hotel rooms.
It allows users to book accommodations for various time periods via its websites and
mobile apps. Airbnb is a company that provides an online marketplace and hospitality
services. The company enables consumers to lease or rent short-term lodging,
including vacation rentals, apartment rentals, homestays, hostel beds, and hotel rooms.
It allows users to book accommodations for various time periods via its websites and
mobile apps.

Airbnb is one of the world’s largest marketplaces for unique, authentic places to
stay and things to do, offering over 7 million accommodations and 40,000 handcrafted
activities, all powered by local hosts. An economic empowerment engine, Airbnb has
helped millions of hospitality entrepreneurs monetize their spaces and their passions
while keeping the financial benefits of tourism in their own communities. With more than
half a billion guest arrivals to date, and accessible in 62 languages across 191 countries
and regions, Airbnb promotes people-to-people connection, community and trust around
the world.

Case Summary

Like many services industries, hotel companies have done a tremendous job of
ensuring the quality of the customer experience through standardization. People
booking rooms through any of the major hotel chains can be pretty much assured of
certain basics. They’ll enter the 13-by-25-foot room into a short hallway with a bathroom
and closet on one side or the other. In the bathroom, they’ll find the basics along with a
sterile display of soaps, hair care products, and other toiletries. The room features a bed
or two flanked on both sides by nightstands with a reading light by each. An upholstered
chair and ottoman sit at an angle in the far corner with a desk opposite.
 A dresser topped with a flat-screen TV sits across from the foot of the bed.
Visitors might also discover a mini-fridge and a microwave oven.The artwork and décor
are fairly contemporary although impersonal and nondescript. Other details throughout
the hotel property are equally predictable. And although luxury level across these
features varies from chain to chain, the vibe is the same. Many travelers count on this
standard experience—it assures that their experience will be within a set of narrow,
expected boundaries.

Minimizing the risk of negative outcomes typically results in a satisfactory lodging

experience for most guests most of the time.But one lodging provider is targeting
travelers who have a different set of needs and expectations. Airbnb is turning lodging
services upside down by promising a hospitality experience that is the complete
opposite of the one provided by major hotel chains. A major player in the new sharing
economy, Airbnb is an online community marketplace that connects people who want to
rent out space in their homes with those who are looking for accommodations. Like a
true online marketplace, Airbnb doesn’t own any lodging properties. It just brings buyers
and sellers together and facilitates transactions between them. But Airbnb’s promise of
value is what really sets it apart from the hospitality world’s status quo. The new-to-the-
game lodging provider pitches an authentic experience—a true sense of what life is like
in the place you visit. Whereas the hotel industry has spent decades sculpting its
standardized offering, in just eight years Airbnb has built a global network of more than
2 million listings and 60 million guests throughout 34,000 cities in 191 countries. It has
also built a market value of more than $25 billion. Although these numbers may sound
impressive on their own, in its brief existence Airbnb has managed to exceed the
accomplishments of the largest hotel chain in the world – 100 year-old Hilton Worldwide
with its 765,000 rooms, 4660 properties, and a market value of $22 billion.

How did Airbnb pull of this amazing feat? According to Brian Chesky and Joe
Gebbia—the start-up’s founders—Airbnb simply recognized that the travel industry had
lost touch with its customers by offering only one cookie-cutter option—ticky-tack rooms
in antiseptic hotels and resorts. This standardized model seemed to dictate an
unintended goal for the entire hotel industry—to ensure that nothing remotely interesting
happens. Once Chesky and Gebbia recognized this, they set out a strategy to bring
authenticity back into the hospitality industry.

It all started when the founders had a hair-brained thought on how to generate
some extra income to help pay the rent on their modest San Francisco loft apartment.
During a major convention that had every hotel room in the city booked, they rented out
three air mattresses on the floor of their apartment for $40 a night each. In the process,
they discovered that the people who booked that real estate got more than just a place
to stay at a time when they needed it most—they got a unique networking opportunity.
From that moment, Chesky and Gebbia moved quickly to develop and formalize the
business concept.

Today, using Airbnb to either list a property or rent one to stay in is relatively
simple. For hosts—Airbnb’s official term for property owners who want to rent out
space—it’s a simple matter of registering and being vetted to ensure legitimacy. Listings
can be pretty much anything from a couch, a single room, a suite of rooms, or an
apartment to a moored yacht, a houseboat, an entire house, or even a castle (Airbnb
currently claims more than 1,400 castle listings). Some hosts even rent out space in
their yards for guests to pitch a tent. With more than 2 million listed properties for rent,
each is as unique as its owner. Because listings are in private homes and apartments,
they are typically located in residential neighborhoods rather than commerce centers
where national and global hotel brands abound. Bookings can be offered by the day, the
week, or the month, and hosts decide on price and the other details of their service and
listings. Airbnb keeps only 3 percent of the booking fees and returns the rest to the host
within 24 hours.

For guests, the process is about like buying or booking most anything online.
Registered users search by city, room type, price range, amenities, host language, or
various other options, including entering their own keywords. Most listings provide
photos and details that give potential guests a reasonably accurate idea of what their
stay will be like. Guests can contact potential hosts with questions before booking. On
top of the fee for the property, guests typically lay down a security deposit and pay a 6
to 12 percent service fee to Airbnb. Bookings are made through Airbnb, so money
changes hands only through a secure interface. When guests arrive at the chosen
property, the host either greets them or arranges for entry.

As the founders were getting Airbnb off the ground, they constantly faced a big
challenge. Many people—investors included—were skeptical. In fact, during Airbnb’s
first year, the founders were turned down by every venture capitalist they approached.
“When we started this company, people thought we were crazy,” said Chesky. “They
said strangers would never stay with strangers, and horrible things are going to
happen.” They also had a hard time convincing guests; few people were willing to risk
staying with someone they’d never met.

But Airbnb overcame these concerns through various means. First, it set up a
standard rating system for both hosts and guests, allowing each side to assess the
other and reviewing what others have said about prior experiences. A “superhost” status
gives an assurance of extensive booking experience and high-quality service. A
“business travel ready” badge notes that the host provides specific amenities like Wi-Fi,
a desk, and basic toiletries. Airbnb also puts guest and host minds at ease with its
verification process, tips for safe and satisfactory bookings, and a 24-hour Trust and
Safety hotline. Hosts are further protected by an included insurance policy that protects
their property from damages of up to $1 million. Airbnb admits that although these
measures do not guarantee that nothing bad will ever happen, the likelihood of a
negative outcome is no greater than it is for staying at a chain hotel.

Current Situation

Today, we are providing a brief update regarding our company, our community,
and our work to fulfill our mission. Airbnb’s mission is to create a world where anyone
can belong anywhere and we are focused on creating an end-to-end travel platform that
will handle every part of your trip. As we work to achieve this goal, we are focused on
building for the future, driving strong sustained growth, and creating new businesses
that will power long-term success.
 In 2018, we saw strong growth throughout our company: our core homes
business enjoyed robust growth, Airbnb Experiences are now available in more than
1,000 cities, and we continued to optimize our platform to support the expansion and
development of new business units. At the same time, Airbnb put in place senior
leaders who are focused on investing in growth and long-term profitability. Airbnb is
poised to build on this momentum in 2019 and beyond.

Rationale/Background

 Airbnb platform is fueled by hosts and guests who are loyal to Airbnb because
they treat them like members of a community and not commodities.

 Airbnb hotel companies have done tremendous job of ensuring the quality of the
customer experience through standardization.

 Airbnb community has created a truly global network effect. Guests who are
seeking unique listings and experiences around the world find what they want at
Airbnb. That demand generates greater opportunities for even more hosts.

 Airbnb community offers unique, high-quality accommodations and experiences

that have created a new way to travel that did not exist before and cannot be
found anywhere else.

 Airbnb CFO Dave Stephenson joined Airbnb in January. He said “will use his
experience in growing large businesses quickly at scale to ensure we are
investing for both growth and long-term profitability”.
 Airbnb COO Belinda Johnson has used her extensive knowledge of the company
to design an operating system that is making us more efficient and continues to
ensure that our company keeps up with our growing community. In this role,
Johnson leads the Airbnb Customer Experience, Payments and Trust and Safety
Teams, three critical functions that help drive Airbnb’s growth.
  Airbnb is turning lodging services upside down by promising a hospitality
experience that is the complete opposite of the one provided by major hotel
chains.
 Airbnb sets and builts a global network of more than 2 million listings and 60
million guests throughout 34,000 cities in 191 countries.

Issues and Concern

 As the founders were getting Airbnb off the ground, they constantly faced a big
challenge. Many people – investors included – were skeptical. In fact, during
Airbnb’s first year, the founders were turned down by every venture capitalist
they approached.

 “When we started this company, people thought that we were crazy, “said
Chesky. They said strangers would never stay with strangers, and horrible things
are going to happen”.

 They also had a hard time convincing guests; few people were willing to risk
staying someone they’d never met.

 Set up a standard rating system for both hosts and guests, allowing each side to
assess the other and review what others have said about prior experiences.

 Airbnb Company must influence hosts to follow certain guidelines toward creating
the best guest experience possible.

Point of View

Third Persons Point of View

Statement of a Problem

How to set up a standard rating system for both hosts and guests, allowing each side to
assess the other and review what others have said about prior experiences?

Objectives:

1. This study aims to give possible solutions to the problems that arise,
among both hosts and guests in Airbnb and also how to influence hosts to
follow certain guidelines toward creating the best guest experience
possible.

2. To come up with an action plan that the company might consider.

Area of Consideration

1. The challenge that many people, and investors were faced, during the Airbnb’s
first year has been raised.

2. Airbnb started their company and it has to being forecasted that it might never
grow but many horrible things are going to be happen.

Alternative Courses of Action (ACA)

ACA 1

The company must create and strive for further research to avoid problems that may
arise for both hosts and guests including investors.

Advantages:

1. There is a great chance that guests may recieve the most comfort that company
or hosts give.
 2. Great advantage and strength for Airbnb among other hotel companies, that
they will meet customer preference and build stronger relationship between
them.
3. Great opportunity for the Airbnb Company to gain more and high profit from their
customers.
4. Researchers may help the Company to influence their valued customers and at
the same time by maintaining their Company image.

Disadvantages:

1. The assurance that the customers will be satisfied or dissatisfied, accept or reject
the good and bad feedback from the customers.
2. Taking risk without assurance that the result will be successful or not.
3. A new plans needs for further classifications whether it will be accepted to their
value customers.

ACA 2

Initiate advocacies that advocates and helps guest experience from Airbnb to feel
authenticity and uniqueness from other Company.

Advantages:

1. This will be a great help to their customers to stay and continue to patron their
company.
2. Helps not only for investors, guests but the favor is unto the Company that holds
in it.
3. Developers of their company are beginning to build hotels in many places where
they normally would not give.
4. The access of their valued customers is at ease.

Disadvantages:
 1. Despite all the success, it can still finds legitimacy and authenticity from their rival
Company.
2. Requires unity from other companies, government and people to be success.
3. Possible criticism will arise from its rivalry.
4. Costly to implement and less assured to success.

Recommendation

ACA 2

Plan of Action

Activities Actions to be Persons Time Bound Percentage

taken Involve Compliance

Step 1. Problem should Chief Executive

Organize a be tackled and Officer (CEO),
meeting the possible Chief Operating
solution will be Officer (COO).
imposed.
1st Month
The Project Manager
must have
allocated
budget in order
to be
presented. All other
Department
The Objective Managers
and plan must
be will agreed
 by everyone.
Step 2. The company
First action stars the Research 2nd month
project and Department
creating further
researches.
Step 3. The data
Analyzing the gathered is Research 3rd month
data analyzed and Department
proceed to next
plan.
Step 4. Gaining
Unity with other Supports from CEO and all the
companies other company Department 4th month
in initiating Managers
advocacy for
building up
great success.
Step 5. Product Innovating
Development hotels for Operation
and Distribution guests. Finding Manager and
possible Marketing
suppliers, Department 5th month
suggestions
that Airbnb’s
mission goes
beyong
providing an
authentic guest
experience and
into the realm
 of establishing
great efforts.
Start of
spreading the
information of
the advocacy
Step 6. by means of CEO and all the
Impose advertising or Department 6th month
Advocacy any information Managers
media to gain
more supports
with other local,
government,
and
international.
Finding the
appropriate
Step 7. marketing Marketing
Marketing strategy and Manager 7th month
launching of the
new innovated
features of the
product.
Step 8. The advocacy
Evaluation and the
launching of the
product will be Research
evaluated by Department
the use of
research, 8th month
observation,
 feedback and
other source of
information.

Evaluation of CEO and all the

the objective if Department
it is achieved or Managers
not? To
continue the
plan or change
another plan.
Step 9. After the
Presenting the Evaluation it
result and will be
planning presented in all
members of the CEO and all the 9th month
board. And Department
creating Managers
another plan of
action plan and
objective for the
company
improvement.
Step 10. After all the
Finalizing the evaluation and
plan planning of CEO and all the 10th month
action it will be Department
finalize before it Managers
was
implemented,
References:

Airbnb and the Hotel Industry: The Past, Present, and Future of Sales, Marketing,
Branding, and Revenue Management
https://www.bu.edu/bhr/2018/10/31/airbnb-and-the-hotel-industry-the-past-present-and-
future-of-sales-marketing-branding-and-revenue-management/
Retrieved: November 18, 2019

Airbnb 2019 Business Update

https://news.airbnb.com/airbnb-2019-business-update/
Retrieved: November 18, 2019

Airbnb: The Growth Story You Didn't Know

https://growthhackers.com/growth-studies/airbnb
Retrieved: November 18, 2019