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Airbnb SWOT & PESTLE Analysis

ID : 52617353| Sep 2020| 15 pages

COMPANY PROFILE -Airbnb

Business Sector :Hospitality

Operating Geography :United States, North America, Global

About Airbnb :

Airbnb is an online lodging marketplace founded in 2008 by Brian Chesky, Joe Gebbia and Nathan Blecharczyk. It is headquartered in San Francisco, USA. The company has 7 million places of accommodation in 220+ countries. The accommodations are all managed by local hosts who sign up on the platform to provide rooms on rent for people looking for lodging. The company basically acts as a broker that receives commission on each booking. It has offices in 34 cities across the world and around 12,700 employees as of early 2020.
To cut down the high cost of rent in San Francisco, the current founders and former roommate Brian Chesky and Joe Gebbia came up with the concept of setting an air mattress in their living room transforming their apartment into a bed and breakfast (a lodging that accommodates overnight stay and breakfast). Thus, Airbnb, an abbreviated version of its original name, AirBedandBreakfast was formed. Today, Airbnb hosts offer millions of listings in more than 220 countries and regions and over 100,000 cities, and many of these listings are only accessible on Airbnb.
As the entire world is fighting hard against the pandemic, Airbnb also plays an important role in aiding the fight against the coronavirus outbreak. On 26th March 2020 the company launched a global initiative to provide free, clean, and convenient places to 100,000 healthcare providers, relief workers, and first responders, allowing them to stay imminent to their patients and safely distanced from their own families.
Airbnb's mission is “to help create a world where you can belong anywhere and where people can live in a place, instead of just traveling to it.” Airbnb’s vision statement reads “Belong Anywhere”
Airbnb's USP or unique selling proposition lies in being one of the world’s largest online marketplaces for unique, authentic, and alternate accommodations.

Airbnb Revenue :


$ 4.3 Billion- FY ending March 2019 (y-o-y growth of +21%)
$ 3.6 Billion - FY ending March 2018

Competitive Analysis of Airbnb

SWOT
PESTLE
Designating itself as an "Economic Empowerment Engine", Airbnb has helped millions of hospitality entrepreneurs to live their passion and monetize their spaces. Hosting more than half a billion guests till date, Airbnb has successfully promoted people-to-people connections and built a global community of trust with no space for discrimination.
Accordingly, the SWOT analysis of Airbnb manifests a discussion on the greatest strengths that the company enjoys as a competitive advantage over its competitors in the hospitality and lodging industry. The analysis further highlights the opportunities in the external environment that can be consolidated to further strengthen the assets that generate surplus cash. The SWOT report of Airbnb also confers intelligence on the internal weaknesses and external threats that the company confronts being in such a highly competitive environment.
One of the core competency of Airbnb that presents the company with an edge is its pricing model; the company is well known for its cheaper alternatives to expensive hotels. Airbnb being online-based allows travelers to compare and pick from various cheaper alternatives in their desired location. Furthermore, internal factors like strong brand reputation, global presence in 220+ countries, influential social media presence, additional features on website to enhance travel activities, unique and appealing business concept, 24/7 customer service, etc. are some of the most exceptional strengths of Airbnb.
However certain negative experiences of customers and incidents like discrimination, theft of valuables, invasion into privacy, compromised safety, rape and murder, unhygienic lodging, unprofessional host, etc., are the weakness of Airbnb that damage the brand reputation.
Airbnb is no more just an alternate accommodation provider, the company is grabbing the opportunity to extend its business model by increasing its products and services, entering into emerging countries, developing a mobile-based application to connect guests and hosts, etc.
As the business model of Airbnb is considerably mere to replicate the competition threat seemingly increases. With existing players including similar features in their business models and new entrants coming up with cheaper services, the competitive threat is escalating in this industry.
The SWOT analysis for Airbnb is presented below in the matrix followed by detailed analysis:
Strengths
Weaknesses
1. Variety of lodging options at cheaper price than hotels
2. Large worldwide presence built by thinking glocal
3. The local experience provided to guests is a key differentiator from other lodging options
4. User-friendly and personalized website
1. Controversies affecting the company’s image
2. Company is vulnerable to fraudsters who scam customers through fake Airbnb websites
Opportunities
Threats
1. Major sporting events and the Olympics partnership deal
2. China is the world’s largest sharing economy
1. Risk of losing identity by competing in the hotel business
2. Damage to properties by guests would upset hosts
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Detailed SWOT Analysis of Airbnb

 

Strength

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Weakness

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Opportunity

1. Major sporting events and the Olympics partnership deal: Major sporting events like Summer and Winter Olympics, FIFA World Cup, Euro Football Championship, Cricket World Cup etc. are huge opportunities for companies like Airbnb due to the huge influx of fans from other countries. Also, there is a high chance of locals opting to sign up as hosts in order to grab the opportunity of earning some extra money during the events, thereby increasing the accommodation options available to visitors. Airbnb has entered into a $ 500 million sponsorship deal with the International Olympic Committee for Summer and Winter Olympics and Paralympics from 2020 till 2028. This deal helps Olympic organizers cut down on event hosting costs. Also, the venues of Olympic games during this time period: Beijing (2022), Paris (2024), Milan (2026) and Los Angeles (2028) are all major rental hotspots for Airbnb. As part of this deal, Airbnb would provide accommodation to visitors, families of athletes and officials. Athletes can also directly benefit by using Airbnb to sell personal Olympic experiences and access to training regimes to their fans and earn revenue during the process. The Rugby World Cup 2019 has also given Airbnb a second chance at reviving its struggling business in Japan ahead of Tokyo Olympics. Airbnb has been struggling in Japan due to strict rental regulations. The 2014 FIFA World Cup was also an opportunity for Airbnb to introduce the sharing economy in Brazil.

2. China is the world’s largest sharing economy: The sharing economy has grown at a fast pace across the world in the last decade. Especially in China, which is currently the world’s largest sharing economy. The driver of the Chinese sharing economy is the rising consumption by Chinese people. A good proportion of consumer spending is in the sharing economy. In 2016, growth in Chinese domestic consumption was 64% of domestic GDP growth and 20% of global GDP growth. In 2015, the sharing economy was estimated to be worth $ 229 billion and expected to grow at 40% till 2020. By 2020, the sharing economy is expected to account for 10% of domestic GDP and increase to 20% by 2025. In 2016 the transaction volume of the Chinese sharing economy grew by 103% to $ 500 billion. Airbnb has estimated that 40% of its business is likely to be generated from emerging markets by 2030, especially China and India. In 2016, Chinese travelers accounted for 66% of Airbnb guests in China, which surged to 91% in 2018. The company’s listings grew 106% in China. The company plans to bring 1 billion users onto the platform during the next 10 years by focusing on China and India.

Threat

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Major Competitors :

  • HomeAway
  • VRBO
  • Flipkey
  • TripAdvisor
  • Booking.com
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TABLE OF CONTENTS
DELIVERY AND FORMAT
WHY CHOOSE US?

• Applying the fundamental evaluation models, SWOT and PESTLE analysis to assess the internal and external factors and their consequences on the company's micro and macro environment.
• The SWOT analysis is a structure, employed to evaluate Airbnb's competitive stance by recognizing its internal strategic factors like strengths and weaknesses, external strategic factors like opportunities and threats.
• Cataloging Airbnb’s innovative strategies that catapulted its position to a market leader in the alternate accommodation industry and bestowed the company with an edge over its competitors.
• The PESTLE analysis of the Hospitality industry helps to recognize its current trends and external factors that impact Airbnb’s business.
• The PESTLE / STEEPL / PEST analysis report is a structure to study the effects of external factors like political, economic, social, technological, legal and environmental, and their impression on the hospitality industry and in precise, Airbnb.
• A complete illustration of Airbnb's business model and business diversification with further categorization and review of key business segments and business case study
• Synopsis of the acquisitions, mergers, capital raising, equity transactions, alliances or partnership ventures that Airbnb consented with deal valuations to achieve its milestones, business aims, and synergies.
• Comprehensive company analysis to compile information about company profile, value proposition, revenue jumps, business model, business plans and marketing strategy.
• Understanding of Airbnb's USP or unique selling proposition, mission statement, and vision statement
• Identifying the core values, core competencies, key performance indicators and success factors that contribute to the fullness of the company
References used in Airbnb Analysis Report

1. Airbnb About Us - https://news.airbnb.com/about-us/

2. Airbnb 2019 Business Update - https://news.airbnb.com/airbnb-2019-business-update/

3. Airbnb’s Growth Strategy: How they attract and retain 150 million users - https://www.growthmanifesto.com/airbnb-growth-strategy

4. Security Threats All Airbnb Users Need to Know About - https://www.makeuseof.com/tag/security-threats-airbnb-users-need-know/

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Airbnb SWOT & PESTLE Analysis - SWOT & PESTLE.COM

SWOT & PESTLE.com (2020). Airbnb SWOT & PESTLE Analysis - SWOT & PESTLE.com. [online] Available at: https://www.swotandpestle.com/airbnb/ [Accessed 24 Nov, 2020].

In-text: (SWOT & PESTLE.com, 2020)

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Airbnb SWOT and PESTLE analysis has been conducted by Nipunn V and reviewed by senior analysts from Barakaat Consulting.

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