Airbnb has been on the leading edge of what has become known as the sharing economy. The sharing economy can be defined as “an economic system based on sharing underused assets or services, for free or for a fee, directly from individuals” (Botsman). The sharing economy is also referred to as a collaborative economy, which is an “economic system of decentralized networks and marketplaces that unlocks the value of underused assets by matching the needs and haves, in ways that bypass traditional middlemen” (Botsman). For the purposes of this paper, the term sharing economy, or share economy, will be understood to include the definition of collaborative economy unless otherwise stated. Since the shared economy is a comparably new experience, a …show more content…
Airbnb is now valued more than the Hyatt chain of hotels (Cannon and Summers). Airbnb has been able to change the balance of power in the hotel industry, allowing home owners with a spare room to connect with short-term renters, creating “a peer-powered business with virtually no overhead” (Ingram). Airbnb is also making progress into the corporate travel market. In the U.S., companies are projected to have $310 billion in business related travel costs (Ruch). With Airbnb saving business travelers an average of 41%, or $102 per night, over hotels, they are gaining more and more of the business travel market (Ruch). Further proof of this is given by Concur, a top travel-management company, that “reported in July 2014 that Airbnb transactions in their expense reports had increased by 27x year-over-year while Uber transactions had climbed 5x” (Ruch). With the Airbnb business model that charges between 6%-15% per transaction, traditional hotels cannot compete because of the overhead and infrastructure costs they have. The situation faced by traditional hotels in response to Airbnb can be illustrated by the cost- based pricing strategy. This strategy is based “on an understanding of production- and marketing-related costs as the key elements in determining a product’s initial or standard price” (Finch). The standard price is the price floor of the room, and any costs …show more content…
Airbnb has developed Airbnb Neighborhood guides that “provide destination-specific tips and information, which not only help advise users as they go through the booking process, but also extend Airbnb-consumer interaction” (Hoeltje). The neighborhood guides help people decide where to stay by providing local information for popular cities, allowing people to experience different cultures and unique travel experiences they may have not otherwise done (Hoeltje). Airbnb has also developed a Hospitality Lab for property owners that provides online and offline workshops, along with hospitality tips, that allows for consistency and improves the customer experience. The company also offers a blog, short films and Airbnb Social Connections, which allows users to sync their Facebook accounts with their existing Airbnb accounts. Once connected, Airbnb Social Connections helps users find a place to rent within their personal network (Hoeltje). Airbnb not only revolutionized the hospitality industry and kickstarted the sharing economy’s P2P marketplace, but the brand’s storytelling has proven to be its greatest strength. The company recently introduced Pineapple, a print magazine that is “a tangible collection of our community’s stories and inspirations” (Wegert). The steps taken by Airbnb have not only created value for its customers, they align with the
These tokens are representative of another commodity that we all have, but are unable to trade between people – time. For every good or service that is available, we have two options for their means of gain. We can either invest our own time in the production and development of a good or service, or...
Social Media is an economic system as well. But, Ford capitalized on a completely different way of influencing the people to target them as their initial agents, by shaping it into a ‘Gift Economy’.
Hilton Worldwide carries out business through three segments: (1) management and franchise; (2) ownership; and (3) time-share. These business segments enable management to capitalize on strengths like brand recognition and economies of scale. The company focuses primarily on the management and franchise segment which consist of 3,918 hotels with 610,413 rooms. Managing the properties, rather than owning them, allows the company t...
Sharing economy is ability to share information, data and services around the world. This information sharing should be accessible by all. This information sharing increases companies visibility of their goods and services. This visibility increases the company’s value as well as
Amy Westervelt’s article “Bike Sharing Grows Up: New Revenue Models Turn a Nice Idea into Good Business” explains bike sharing programs that you could rent a bike for a day, take it anywhere you wanted, but return it to any bike station. Paris has started a bike-sharing business in 2007, they had cool bikes, reasonable prices, and good placement of the bike stations. The bike program has 50 million rides annually. In the United States launched a bike- sharing program in 2008 in Denver which lead to other cities launching programs in 2010. Washington D.C. created a new problem, they had too many riders and not enough bikes. Portland, San Francisco, and Chicago are planning on releasing a bike-sharing program. Over time the bikes got cooler and
Commercial products have been around since the beginning of time. Manufacturing millions of products such as Ketchup for consumers to use daily. One might argue that buying house hold items can be such a hassle even for consumers who barely have time to get ready for work, let alone clean after themselves. The need for more items influences consumers to evolve from prehistoric cave dwellers into item entrepreneurs through introducing multiple platforms to spread news about a product, appealing visually for customers to go buy it, and demonstrating why traditional ways of doing things helps improve modern cultures to expand newer ideas for buyers to sell or buy as they please.
Each year, America’s travel and tourism industry generates approximately $1.5 trillion dollars in economic output, or about 2.6% of the country’s gross domestic product (Select USA, 2016). Nearly 20% of this economic activity is directly related to accommodations, which serve the short term lodging needs of pleasure and business travelers. Unlike other American economic sectors, this lodging industry is a highly fragmented, diversified market with an incredible variety of suppliers. Temporary overnight lodging can range from undeveloped campsites, hostels, and capsule hotels all the way up to mansions and incredibly luxurious five store hotels. Price ranges run the gamut from just a few dollars a night to thousands of
Internet Marketing News and Know-How. Hotel Marketing. 18 Feb. 2011. Web. 19 Apr. 2011. .
This company provides accommodation facilities with hospitality for people who come from other areas but this is not a hotel service. This is called first unhotel hospitality product which enable guest to live like locally by experiencing luxury facilities. This concept has gone beyond the hotel service and it is called as vacation home. This great business concept was created in 2009 on the mind of Grey Marsh who is the CEO of this company. They are keeping their relationships with two parties to be success in their business and to make high profit in the market place. In here, they provide their service to typical high market home owners by giving the opportunity to let them out their home for people while the home is
The economic theory of supply and demand dictates that an excess of supply (hotels) to demand (customers) leads to a lower price consumers are willing to pay. This creates inelasticity within hotel pricing and places substantial pressure on management to meet the pricing needs of customers while providing an attractive and unique service. Hotel services are also intangible in nature, placing increased burden on hotel owners to utilise all available rooms through discounts and deals.
Airbnb is a company that was founded in 2008 and has been booking people to stay in apartments, houses or even villas while on vacation or just in need of a place to stay. Their company is about more than just having a nice place to stay while away form home. Airbnb cares about their guests and wants them to feel like they are at home.
After enjoying much initial success by utilizing the internet and a patented technology which connected buyers to sellers, priceline began to suffer growing pains early on. Initially priceline was successful because it concentrated solely on airline seats. Airlines were more than happy to fill empty seats for any price rather than fly with an undersold plane. Copying its success, priceline quickly followed into offering hotel rooms, another commodity in which hotels would rather book a room at a minimal price than have it empty. As priceline spread out to encompass more areas such as home mortgages and groceries, it faced a diluted image to shoppers. Some ventures were huge resource drains to the company both financially and in talent. As employees tried fixing what was wrong with problem areas, profitable areas such as hotels and airfare began to receive direct competition from the airlines and hotels themselves as well as other websites such as expedia.com.
Thanks to these factors, pricing becomes one of the primary uses with which hotels attract customers. However, due to customers’ independent nature, there influence over industry players is limited. In the high-end segment of hotels, price influence becomes even less as hotels find it easier to differentiate themselves from the competition and customers become less price sensitive coming to expect higher prices as a symbolism of superior quality and services. Lastly, corporate business and tour operators can exert more influence due to their large purchases but this affect is of a limited nature and does not extend across the whole
Moreover, the InterContinental Hotels & Resorts is considered the first international hotel brand in the world, as it began operations in the year 1946 (About InterContinental Hotels Group Brands, 2015). Over time the hotel group has evolved to encompass quality hotel rooms not only in North America, but in Central and South America, Europe, the Middle East, Africa, Australia, and Asia-Pacific (IHG – InterContinental Hotels Group, 2015). In addition, they have acquired extended stay facilities and the Hualuxe Hotels & Resorts, which specifically “celebrates the essence of Chinese hospitality” (About InterContinental Hotels Group Brands, 2015). In my opinion, this shows that their target market has changed by expanding their scope of travel, which means they are traveling to farther and farther locations and require the familiar surroundings with equivalent product quality at the final destination. The InterContinental Hotels Group is in the fourth and final stage of the product life cycle, which is the decline stage (Editorial Board, 2014, p. 212). Indeed, the brands lengthy history indicates it has loyal customers, but its addition of innovations indicates the targeting of new customers for the organization, which are clear signs of a business in the decline stage of the product life cycle (Editorial Board, 2014, p.
Airbnb, a short form of Air, Bed & Breakfast, defined itself as a “trusted community marketplace for people to list, discover, and book unique accommodations around the world online or from a mobile phone or table” (Airbnb,2017). It allows people to rent out their rooms or properties as an accommodation alternative for tourists through a secure online platform. The company mission is “to create a world where people can belong anywhere they travel, connecting with local cultures and enjoying unique travel experiences” (Airbnb, 2017). Airbnb consists of guests and hosts through online offering on website (www.airbnb.com), and mobile applications for both Android and iOS customers. The website is helpful and simple to use like other bookings