Posts Tagged ‘hospitality’


Airbnb corporate social responsibility is closely associated with business model of the travel industry disruptor.  It can be argued that travelling via Airbnb instead of hotels results in significant reduction in energy and water use, greenhouse gas emissions, and waste, and encourages more sustainable practices among both hosts and guests.   CSR Programs and Initiatives Airbnb Supporting Local Communities Airbnb employees receive four hours of paid time off every month to volunteer in their local communities.[1] Global Citizenship Champion program launched in 2013 involves organizing charitable contributions to causes important to their local communities in 20 cities around the world Champions within the scope of Global Citizenship Champion program completed more than 17000 hours of service in 2016. Airbnb runs Open Homes program that provides homes for free to those affected by conflict, disaster, or critical illness. The program has helped more than 25,000 people in need to find temporary housing and in 2019 the company is investing USD 20 million to grow the platform. Airbnb aims to house 100,000 people by 2022.[2]   Airbnb and Gender Equality and Minorities Diversity is one of the core values at Airbnb. 48.94% and 43.85% of employees are female, globally and in the US respectively. The figure 10 below illustrates race and ethnicity representation at Airbnb in the US. Ethnicity representation at Airbnb in the US Airbnb has “Diverse Candidate Slates” rule. For every open position, women and underrepresented minorities must be included on candidate slates before those slates are presented to hiring managers and the manager is allowed to proceed with filling the position.[3] The peer-to-peer lodging company has a wide range of Airfinity groups that create more awareness and advocacy around the issues employees value. Airfinity employee groups include Able@ for employees with disabilities, AirPride@ for LGBTQ people, Asians@, Black@, Foreignairs@, Juntos@,…


September 24, 2019
By John Dudovskiy
Tags: ,

People-to-people platform of Airbnb benefits all its stakeholders, including hosts, guests, employees and the communities in which it operates. According to its CEO, Airbnb is “a more vertically integrated, end-to-end, full-stack ecosystem powered by people.”[1] Generally, Airbnb ecosystem can be divided into two groups: narrow and broad. Narrow Airbnb ecosystem comprises services that directly generate revenues for Airbnb, while broad ecosystem contributes to the development of peer-to-peer lodging, travel and experiences industry in general. Airbnb ecosystem in a narrow level integrates the following types of services: Accommodation Experiences Adventures Restaurants The travel industry disruptor supports stakeholders in its narrow ecosystem in various manners. For example, in a rare event of accidental damage, the property of every Airbnb host is covered up to a million dollars.[2] Airbnb has caused an ecosystem of new start-ups that produce products and services for peer-to-peer lodging industry. This can be specified as broad Airbnb ecosystem and includes a range of products and services.  Table below illustrates the most popular types of such services referring to notable examples: Products and services within Airbnb ecosystems Notable examples Cleaning services of properties FlyCleaners: On-Demand Dry-Cleaning App Proply: Full-service cleaning, key delivery, welcome gifts and restocking Porter: laundry, cleaning, restocking Property management for hosts Guesty: responding to guest inquiries, screening potential guests, coordinating key exchange etc. Urban Bellshop: check-in, listing management, cleaning Nest: controlling temperature, Analytics Beyond Pricing: automated pricing suggestions Smart Host: pricing advice Everbooked: pricing suggestions based on a wide range of factors Services within broad Airbnb ecosystem Additional products and services within Airbnb broader ecosystem include automating check-in process, providing keyless entry around the clock, concierge services and welcoming guests and software products such as data presentation and analytics. Moreover, physical products such as toiletries, remote locks, and noise signallers and financing services for Airbnb hosts…


September 18, 2019
By John Dudovskiy
Category: Strategy
Tags: ,

Airbnb McKinsey 7S model illustrates the ways in which seven elements of businesses can be aligned with positive implications on the overall effectiveness of the business. According to this framework strategy, structure and systems are grouped as hard elements, whereas shared values, skills, style and staff are considered soft elements. According to McKinsey 7S model, there are strong links between individual elements. Specifically, a change in one element causes changes in others. As it is illustrated in figure below, shared values are positioned at the core of Airbnb McKinsey 7S model; they guide employee behaviour with implications on their performance. Airbnb McKinsey 7S model Hard Elements in Airbnb McKinsey 7S model Strategy. Airbnb business strategy is associated with platform business model and accordingly, instead of owning the services it offers, the company engages as a broker between suppliers and consumers, receiving a commission of 9% to 15%. Moreover, increasing level of technological integration into various aspects of the business can be specified as one of the critical features of Airbnb business strategy. The global hospitality service brokerage company also places its community and trust among organizational stakeholders at the forefront of its business strategy. Structure. Airbnb organizational structure can be classified as matrix. The workforce is divided into teams of up to 10 people. Importantly, teams support each-other to a great extent. Team leaders and members feel free to ask other teams if they need resources or capabilities. Airbnb organizational structure can be also branded as holocratic, because decision making power is given to teams throughout organization to a great extent and majority of teams are self-managed. The corporate structure of Airbnb is highly dynamic due to rapidly increasing scale of the business worldwide. Systems. Airbnb business operations depend on a wide range of internal systems such as employee recruitment and…


September 17, 2019
By John Dudovskiy
Category: Strategy
Tags: ,

Airbnb value chain analysis is an analytical framework that assists in identifying business activities that can create value and competitive advantage to the global rental and experiences platform. Figure below illustrates the essence of Airbnb value chain analysis. Airbnb Value Chain Analysis   Primary Activities in Airbnb Value Chain Analysis Airbnb Inbound logistics In traditional businesses inbound logistics involve receiving and storing raw materials to be used to manufacture products. Inbound logistics is different in service industry in general and online service in particular due to differences between products and services that include inseparability, intangibility, perishability and heterogeneity. From this perspective, Airbnb inbound logistics can be divided into two groups: 1. Inbound logistics related to core services. Core services for the company comprise peer-to-peer listings of accommodation, experiences and adventures. Airbnb inbound logistics for its core services takes a few minutes thanks to purely online nature of its business. Specifically, hosts can list their properties or experience services on the website of the lodging colossus on a matter of a few minutes. Therefore, inbound logistics of each new addition to its website comes for no extra cost for Airbnb. 2. Inbound logistics of resources and items that are used to aid the facilitation of core services. The global hospitality service brokerage company also uses a range of physical resources such as stationary items for its offices. Moreover, products like pillows and mugs, distributed to hosts occasionally to motivate them can also be mentioned as resources acquired by the travel industry disruptor to aid the facilitation of core services. Economies of scale can be specified as the main source of value addition in Airbnb inbound logistics of items that aid in facilitation of core services.   Airbnb Operations Generally, operations involve the transformation of raw materials into finished products in manufacturing…


September 16, 2019
By John Dudovskiy
Tags: ,

  Porter’s Five Forces analytical framework developed by Michael Porter (1979)[1] represents five individual forces that shape an overall extent of competition in the industry. Airbnb Porter’s Five Forces Analysis are illustrated in Figure 1 below: Figure 1 Airbnb Porter’s Five Forces 1. Threat of new entrants in Airbnb Porter’s Five Forces Analysis The threat of new entrants into pear-to-pear lodging industry is low. Theoretically, setting up a website should suffice to enter the industry. However, in practice there is a number of barriers to potential new entrants into peer-to-peer lodging industry. These include the following: 1. The time of entry. In e-commerce the role of the first mover advantage is usually paramount and it is usually very difficult if at all possible for the followers to even get close to the market disruptor. Once their business model proved to be viable, internet-based market disruptors such as Amazon, Facebook and Uber were able to gain large market share in the global marketplace in a short amount of time. Funding from investors, word-of-mouth, effective management and hype usually play an instrumental role in assisting e-commerce disruptors to secure their niche and strengthen their position in international markets. This was the case with Airbnb as well. Founded in 2008, the company became a leading global hospitality service brokerage company within a matter of a few years. As of summer 2019, Airbnb boasts More than 6 million listings in more than 191 countries and regions worldwide.[2] The word Airbnb became a synonym for peer-to-peer lodging, leaving little room and market for potential new entrants. Nevertheless, it would be naive to claim that the threat of new entrants does not exist. There is no limit on the numbers of times that a market can be disrupted and as such, any new company with another innovative idea…


September 15, 2019
By John Dudovskiy
Tags: ,

Airbnb marketing communication mix as a framework explains how the global lodging company uses individual elements of marketing communication mix. Elements of marketing communication mix according to this framework consist of print and media advertising, sales promotion, events and experiences, public relations, direct marketing and personal selling. The patterns of use of these elements by Airbnb is explained below.   Airbnb Print and Media Advertising Despite the purely online nature of its business model, Airbnb uses print and media advertising extensively. The accommodation and experience marketplace launched Airbnb Magazine in May 2017 distributed in the U.S., with the exception of a small number of copies that will be available for sale in London priced at USD 3,99.[1] Airbnb magazine is a highly dynamic print media platform that responds to the interests of the company’s target customer segment. It has been noted that if Airbnb “algorithms see that users are increasingly searching for ‘Paris’, it notifies the magazine’s editorial staff to whip up a story or two on the French capital.”[2] It has also been speculated that the global hospitality service brokerage company has plans to create its own TV shows in order to encourage people to travel more. As a starting point “Airbnb has reportedly worked on a TV show called Home for Apple’s new TV Plus subscription service; the show focuses on unearthing unique living spaces around the world and the people who reside there”[3] Although Airbnb did not use celebrity endorsements up to date, the global rental and experiences platform effectively uses the use of its services by celebrities as a part of its marketing strategy. For example, the lodging company promotes luxury mansions and villas where celebrities such as Arianna Grande, Lady Gaga,  Britney Spears and Channing Tatum have stayed using Airbnb. Viral marketing is also used by Airbnb…


September 11, 2019
By John Dudovskiy
Category: Marketing
Tags: ,

Airbnb segmentation, targeting and positioning consists of a set of consequent activities that divide customers into different groups and identify specific groups to be targeted. The accommodation and experience marketplace positions its services in a way that best appeals to the needs and wants of members of this group. Airbnb uses the following types of positioning:   1. Multi-segment positioning. The global lodging company uses multi-segment type of positioning targeting more than one segment with different service packages. For example, the company lists cost-effective apartments for rent for cost-conscious customer segment, whereas Airbnb Plus package targets customers who value advanced quality and design and are willing to pay more. Recently, the platform launched its Airbnb Luxe line of premium apartments that has been positioned as ‘extraordinary homes with five-star everything’ targeting premium customer segment.   2. Anticipatory positioning. Airbnb uses anticipatory positioning, launching services for a market segment that has low turnover with the anticipation that the turnover will increase in the future. Adventures services such as ‘Around the World in 80 Days’ and experiences of “Becoming a Beekeeper” can me mentioned as examples of Airbnb services with anticipatory positioning. The following table illustrates Airbnb segmentation, targeting and positioning: Type of segmentation Segmentation criteria Airbnb target customer segment Accommodation Experiences & Adventures   Geographic Region More than 191 countries and regions and about 100000 cities More than 30000 experiences worldwide Density Urban/rural Urban   Demographic Age 18-45 18-60 Gender 54% Females & 46% Males[1] Males & Females Life-cycle stage Bachelor Stage Newly Married Couples Full Nest I Full Nest II Full Nest III Empty Nest I Empty Nest II Bachelor Stage Newly Married Couples Full Nest I Full Nest II Empty Nest I   Occupation Students, employees, professionals, Students, employees, professionals, senior manager, executives Behavioral Degree of loyalty ‘Hard core…


September 10, 2019
By John Dudovskiy
Category: Marketing
Tags: ,

The concept of marketing mix (also known as 7Ps of marketing) comprises elements of the marketing mix that consists of product, place, price, promotion, process, people and physical evidence. Airbnb marketing mix (Airbnb 7Ps of marketing) below involves the analysis of these elements for the global hospitality service brokerage company. Product Element in Airbnb Marketing Mix Airbnb can be used to find places to stay and various tourism experiences around the globe. It is important to note that Airbnb does not own places or does not host the experiences it offers. It is only a platform between service providers and consumers. The global hospitality service brokerage company has been increasing the range of its services regularly. Started only as s website that can be used to find bed and breakfast type of accommodation in 2008, today Airbnb offers a wide range of hospitality services. These include places to stay for various tastes, purposes and budgets, concerts, adventures, experiences and restaurants. Place Element in Airbnb Marketing Mix There are more than 191 countries and regions and about 100000 cities with Airbnb listings[1]. Airbnb offices are located in 34 cities worldwide.[2] The listings of the accommodation and experience marketplace are not concentrated in any single market. Less than 3% of all active listings are in New York City, London, and Paris. No one city accounts for more than 1% of our listings worldwide.[3] Price Element in Airbnb Marketing Mix Airbnb pricing strategy can be described as economy pricing. Airbnb is widely recognized as the most affordable option of finding an accommodation. The global lodging company charges hosts only 3% booking fee and guests are also charged a service fee (which Airbnb collects directly), and it may collect a VAT (value-added tax) in some jurisdictions. Guests usually have access to common facilities such as their…


September 9, 2019
By John Dudovskiy
Category: Marketing
Tags: ,

Cycles of Failure and Cycles of Success and their Implications on Service Profit Chain. This article outlines the key drivers of success for service organisations exploring issues in the works of Schlesinger and Heskett (1991) “Breaking the Cycle of Failure in Services”. The implications of these issues on the Service Profit Chain are analysed in the report using the case of The Savoy hotel and a range of other service organisations.   Key Success Drivers for Service Organisations A service organisation can be defined as “two or more people are engaged in a systematic effort to provide services to a customer, the objective being to serve a customer” (Wright and Race, 2004, p.4). Characteristics used to distinguish between manufacturing and service operations include tangible and intangible nature of output, consumption of output, nature of work, degree of customer contact, customer participation in conversion, and measurement of performance (Mishra, 2009). It has to be stressed that “the ability to manage skills and resources more effectively and efficiently was always the critical driver of success for any service organisation” (Magilo et al., 2010, p.438). Moreover, due to the specific characteristics of service organisations as described above, the role of human resources and personal interaction with customers is greater in service organisations compared to manufacturing businesses. Accordingly, the levels of employee skills and capabilities can be justly specified as crucial success factor for service organisations. Service organisations like Savoy hotel have traditionally relied on consistent quality as a key success driver, whereas for other organisations such as investment banks such JP Morgan effectively micromanaging the corporate culture has proved to be a significant driver for success. Generally, additional success drivers relevant to most types of service organisations include effective leadership, establishing strategic relationships with customers, creativity and others (Forgas et al., 2008).   Cycles…


November 27, 2012
By John Dudovskiy
Category: Management
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