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Discussion QuestionsHow would you illustrate and compare the business models for Airbnb, large hotels chains such as Marriott and Hilton, and bed & breakfast operators? Use the example chart in the textbook for business models as a guide (Concepts & Connections 1.1).NameAirbnbLarge HotelsBed & BreakfastValuePropositionAirbnb does not own any rooms itself but itoffers a technologicalplatform for listing and renting local homes.Individual hosts are able to offer their homes for a fee and guests can book rooms and apartments easier with a lower price.Provide rating and reviews for hosts and guestsAccommodating guests in single or multiple rooms with additional amenities such as spa facilities and fine diningProperties offering spectacular views, bolstering a hotel as thevacation destinationThey are small, usually where owner-operators offered a couple ofrooms within their own home to accommodate guest.Offering bed & breakfast with great allure and ambience for the guests’ experienceMany are in rural areas, or with a historical background.Airbnb, large hotels like Marriot and Hilton, and bed and breakfast vary in size and destination. Airbnb connects hosts and travelers and facilitates the rental process without owning rooms, whereas large hotels and bed and breakfast are subject to city, state, and federal regulations.What are the general strengths and weaknesses of large, hotel chains such as Marriott and Hilton, bed & breakfasts, and Airbnb? Explain how you would compare and contrast thosebusinesses.StrengthWeaknessLarge hotels- Invested heavily in additional amenities as they competed for all - Significant operating cost: total cost aspercentage of revenue in 2015 is 85%,while BNBs’ is 82%; wages accounted
segments in travellers: on-premise spa facilities and fine dining. - Also offer spectacular views, bolstering a hotel as the vacation destination.- Quicker access to the roadways and highways - Better choice for business (18%,compared to 12% of B&Bs) andother, including meeting (12%,compared to 8% of B&B)- Including both domestic andinternational travellers, while B&Bsonly focus manly on the domesticmarket.for 26%, which is 3% higher thanB&Bs; - Higher price - Tax and regulation- Consumer preference is shifting fromfocusingonownershiptosharing/renting to save their money:“Goldman Sachs study showed thatonce someone used Airbnb, theirpreferencefortraditionalaccommodation was greatly reduced”Bed and breakfasts- Offer a more personalized, quieter atmosphere- Rural location (as a competitive advantage since big hotel may have been cost prohibitive) – tourist attraction, offer great allure and ambience for the guests’ experiences- Medium operating cost- Can cut a huge amount acquiring orrenting a property to be used forbusiness- Tax advantage/incentive whenrunning a self business- Limited number of rooms = limitedamount of sales- Lack of services, breakfast options areoften fixed or limited- Can lack of amenities and privacy- Primary domestic marketAirbnb