Avid Travellers will Know Airbnb, an Online Lodging Rental Platform: Contemporary Management: Issues and Challenges Case Study, NTU, Singapore

Case Study Details:

Company overview

Avid travellers will know Airbnb, an online lodging rental platform. People can become a host on Airbnb by listing their spare rooms while travellers can search for their holiday locations and ideal accommodation. Brian Chesky and Joe Gebbia, both graduates of Rhode Island School of Design, founded AirbedandBreadfast in 2007 to rent out air mattresses and provide breakfast options in their apartment to visitors attending a design conference in San Francisco. They did so to pay for their own rental fees.

The idea was to offer visitors a way to save some money by not having to pay prices charged by hotels. A concept totally unheard of in those days, they only managed to interest three guests. In 2008, they were joined by Nathan Blecharczyk, a computer engineer trained in Harvard who was also Gebbia’s roommate before Chesky. Their initial intention was to target visitors at large-scale events and conventions, where hotel rooms were expensive and alternative accommodation was scarce. This effort produced a few thousand listings in 67 countries. Advertising on Facebook together with email campaigns worked well during the events.

Mode of business operations

Airbnb does not own the listed properties but simply charges both the hosts and guests for using its website. Travellers are able to make inquiries or bookings directly with the property owners. Suffice it to say trust is of pivotal importance here. The founders identify this element very early in the process and instituted many steps to cultivate trust amongst users as well as their trust in Airbnb.

High-quality photographs of listings now distinguish Airbnb’s properties from its competition and evoke a sense of prestige (Munger as cited in Helm, 2015). The company also pays close attention to the needs and experiences of its hosts in an attempt to improve Airbnb’s services. For example, Chesky lives in Airbnb’s listed properties to gather insights into the true Airbnb experience.

Question 1: What is the company selling? What is its value proposition?

Question 2: What was/were Airbnb’s business growth strategy(ies) in the United States? Could the same business growth strategy(ies) be used internationally?

Question 3: Could an online lodging rental platform business be sustainable in the long run?

Question 4: Discuss the entrepreneurial qualities of Brian Chesky, Joe Gebbia, and Nathan Blecharczyk. Do you think they have the ability to drive Airbnb’s growth? Why?

Question 5: Would it be viable to develop a local version of Airbnb? If yes, why? If no, why? A successful case study analyses a real-life situation where existing problems need to be solved.