Airbnb SWOT Analysis

SWOT is an acronym for strengths, weaknesses, opportunities and threats related to organizations. The following table illustrates Airbnb SWOT analysis:

Strengths

1.      First mover advantages

2.      Cost attractiveness for customers

3.      Impressive growth rate

4.      Airbnb adventures

Weaknesses

1.      Inability to control service quality

2.      Vulnerability of brand image

3.      Replicable business model

4.      Absence of reception, housekeeping and room service

Opportunities

1.      Brand extension

2.      Further international market expansion

3.      Further technological integration

4.      Formation of new strategic alliances

Threats

1.      More legal issues

2.      Scandals

3.      Emergence of new competition

4.      Loss of key members of workforce

 Airbnb SWOT analysis

Strengths in Airbnb SWOT Analysis

1. Airbnb has a first mover advantage in peer-to-peer lodging industry. First mover advantage has played an instrumental role for Airbnb in terms of establishing strong brand recognition and achieving private brand valuation at USD 35 billion.[1] Thanks to first mover advantage coupled by effective leadership by founders Brian Chesky, Joe Gebbia and Nathan Blecharczyk, the word Airbnb has become synonym for peer-to-peer lodging practices. Moreover, it can be argued that first mover advantage immensely contributes to Airbnb brand loyalty by rapidly expanding its customer base.

2. Airbnb is more cost attractive compared to traditional hotels and this is one of the major strengths points of its customer value proposition. As it has been illustrated in figure below, as of January 2018 average room prices per night are considerably lower at Airbnb compared to average room prices of hotels and this difference is the biggest in New York at USD 119. Operating rooms via Airbnb does not require 24 hours check-in desk, concierge, administration office and management apparatus like hotels, therefore at Airbnb a part of the cost advantage is passed to consumers.

Airbnb SWOT Analysis

 Average room prices in selected major cities in January 2018[2]

3. Airbnb has been growing at impressive rates at the global scale for the past 10 years. The travel industry disruptor has more than 6 million listings in more than 191 countries and regions worldwide.[3] There are about 100000 cities with Airbnb listings and 500 million Airbnb guest arrivals all-time.[4] Moreover, more than 2 million people on average stay on Airbnb each night and there are more than 30000 Airbnb experiences worldwide.[5] Between July 1, 2018 and May 15, 2019 alone, Airbnb added more than 1 million listings. Such an impressive growth rate has positive implications to the bottom line of the business and achievement of its primary objective of profit maximization.

4. Airbnb adventures refer to hosted journey service packages offered by hosts to travellers on Airbnb platform. Similar to peer-to-peer lodging, the company does not organize adventures and trips and it merely provides Airbnb platform for hosts and guests to interact. Airbnb adventures are versatile and they range from tracking lions on foot with Sabache Warriors in Kenya to hunting for UFOs with Nate in Arizona, travelling around the world in 80 Days, searching for Sasquatch or living with a nomadic tribe. Adventures services is a major point of strength for the global hospitality service brokerage company due to the absence of direct competition for this type of service, as well as, immense potential it offers.

 

Weaknesses in Airbnb SWOT Analysis

1. Due to its platform business model Airbnb is not in the position to control the quality of accommodation, experiences and adventure services provided by hosts to users of Airbnb services. The global rental and experiences platform can only encourage hosts to provide quality service to guests. If guests fail to provide quality service they can get low score and negative reviews from guests, meaning that it will be more difficult for them to attract new guests. Such a quality control system sounds fair, however, the absence of tools that Airbnb can use to ensure high quality of service proactively, rather than reactively, remains as one of the major weaknesses associated with Airbnb operations.

2. Airbnb brand image is highly vulnerable to various scandals. In most cases, the root cases of potential scandals are outside of control of the global lodging company. The list of the most notable scandals include but not limited to hosts putting cameras on rooms where guests sleep, discrimination by hosts towards guests, properties being used as brothel by guests and properties being trashed by guests. Such cases have inevitable negative impact on Airbnb brand image. Vulnerability of the company to these and similar incidents is one of the main weaknesses of Airbnb.

Airbnb Inc. Report contains a full version of Airbnb SWOT Analysis. The report illustrates the application of the major analytical strategic frameworks in business studies such as PESTEL, Porter’s Five Forces, Value Chain analysis, Ansoff Matrix and McKinsey 7S Model on Airbnb. Moreover, the report contains analyses of Airbnb leadership, organizational structure, business strategy and organizational culture. The report also comprises discussions of Airbnb marketing strategy, ecosystem and addresses issues of corporate social responsibility.

Airbnb Inc. Report (2019)

[1] Schleifer, T. (2019) “Airbnb sold some common stock at a $35 billion valuation, but what is the company really worth?” Recode, Available at: https://www.vox.com/2019/3/19/18272274/airbnb-valuation-common-stock-hoteltonight

[2] McCarthy, N. (2018) “Is Airbnb Really Cheaper Than A Hotel Room In The World’s Major Cities?”Forbes, Available at: https://www.forbes.com/sites/niallmccarthy/2018/01/23/is-airbnb-really-cheaper-than-a-hotel-room-in-the-worlds-major-cities-infographic/#146f178778ac

[3] Fast Facts (2019) Airbnb Press Room, Available at: https://press.airbnb.com/fast-facts/

[4] Fast Facts (2019) Airbnb Press Room, Available at: https://press.airbnb.com/fast-facts/

[5] Fast Facts (2019) Airbnb Press Room, Available at: https://press.airbnb.com/fast-facts/