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Case 1: Airbnb in 2018 1.How would you illustrate and compare the business models of Airbnb, large hotel chains such as Marriot and Hilton, and bed & breakfast operators? Use the example chart in the textbook for business models as a guide (concepts and connections 1.1)a.The business model of Airbnb is entirely based off of their digital platform, and their location ratings are personal accounts from previous guests. Airbnb also features accommodations that can suit a group of any size, generally at a much lower cost compared to hotels and bed & breakfast operators. Airbnb is 6% to 17% cheaper than hotels in the top 25 markets in the United States (Bustamante, 2019). They also add value by occasionally including tours or additional services. Comparatively, the business model of large hotel chains is centered on having a universal appeal coupled with name-recognition. Most hotel chains have been around for a long time and are quite well-known. They also offer amenities such as onsite gyms, pools, and spas which contribute to their higher price point. Many hotel chains feature great views and onsite parking, adding to their appeal. An additional aspect of their business model is utilization of commercial media advertising which Airbnb and bed & breakfast operators usually do not produce. Lastly, the business model of B&B’s is generally word-of-mouth advertising assisted by convenient locations in high-traffic tourist areas. They focus on giving the home-away-from-home feeling that draws in customers. Prices for bed & breakfasts can range to fit a variety of budgets and expectations.
2.What are the general strengths and weaknesses of a) large hotel chains such as Marriott and Hilton, b) bed & breakfasts, and c) Airbnb? Explain how you would compare and contrast those businesses. a.Large Hotel Chains i.Large hotel chains have the strengths of brand recognition, expected complete service, well-trained staff, and attractive amenities such as pools, spas, and gyms. On the other hand, some weaknesses are that nicer hotels can be expensive and that the average guest does not receive specialized treatment of any kind. The average guest also does not have any brand