Airbnb in 2018 Case 1.docx - Allison Grube GBA 490 \u2013 911 Joyce Meyer Case 1 \u2013 Airbnb in 2018 1 The business model for Airbnb centers around their

Airbnb in 2018 Case 1.docx - Allison Grube GBA 490 u2013...

This preview shows page 1 - 2 out of 3 pages.

Allison Grube GBA 490 – 911 Joyce Meyer Case 1 – Airbnb in 2018 1. The business model for Airbnb centers around their peer-to-peer review system and room sharing offered on a media platform. Feedback can benefit or damage the likelihood of rental prospects depending on ratings left from previous experiences. Such a business model allows the experience to be personalized to the guests liking and will enable them to choose the amount of exposure they have in the area's culture. Hosts can profit significantly from space in their own home or a second property they own by enrolling in the media platform. Large hotel chains such as Marriott and Hilton follow a more traditional business model that takes on large numbers of guests per night and how much revenue they can bring in. By offering luxury amenities to any guest, they can separate themselves from competitors and, in turn, can raise nightly rates knowing they will still maintain the same level of occupancy. They can also rely on their name and the notoriety that is carried by their reputation. Many travelers are willing to spend more per night to stay somewhere that is widely recognized and respected. Bed and breakfasts operators follow a business model that lies between Airbnb and hotel chains. They specialize in a personalized, smaller-scale operating method that fits the guests' needs. Most operate out of an owner's home with a reduced staff with fewer amenities offered. Establishments of this industry primarily are located in rural areas allowing the guest a more relaxed, peaceful, and romantic atmosphere that a hotel chain cannot offer. 2. Large hotel chains such as Marriot and Hilton have dominated the accommodation market for roughly a century, attributed to their focus on consumer experience, additional amenities available to guests, and widespread name recognition. Guests can benefit from on-location spa facilities and fitness centers, fine dining establishments, and spectacular views that depending on where the hotel resides. Name recognition goes a long way in the industry by carrying a particular reputation that gives consumers a sense of confidence when booking at higher-end locations even if lower prices are available. Despite the success that had boded from their business models, large hotel chains face weaknesses, including significant operating expenses, regulations, and impersonal visits that hinder their earning potential. Large establishments need to have a large staff available to maintain the presence and appearance for their guests, which profoundly impacts profit margins. Operating costs account for almost sixty percent of the industry's
Image of page 1
Image of page 2

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture