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Bed & Breakfastsa.Strengths-Existing as a unique, high quality brandname-The use of internet web sites to reach international markets-Offering a whole new take on budget-friendly gateaways with severals kinds of services in one with the lower price than hotels-Offering a quiet, customized and personalized atmosphereb.Weaknesses-Small size and limited number of rooms-Little amounts of sale3.Airbnba.Strengths-Peer to peer collaborative consumtion business model that allows the public to share their resources-A powerful and ‘cool’ image and reputation as Airbnb connects hosts and travelers and facilitates the process of renting without owning any rooms itself; while large hotels and bed & breakfast were subject to city, state, and federal regulation-Online trust and verification system for users and travelers-Good value for customers belongs to the cheaper price than traditional hotels with conveniences when looking for rooms, furthermore offering travelers more opportunities to stay with local hosts for vacation or so on with reasonable priceb.Weaknesses-Airbnb faces regulatory problems in places like San Francisco, where the local government is worried about the company's side-effects on the housing marketQuestion 3: How has the consumer changed and how does Airbnb’s customer value-proposition meet this change?How Airbnb Makes Money ?With listings in over 65,000 cities spread out in more than 190 countries, Airbnb’s reputation and revenues have rapidly grown. The primary source of Airbnb’s revenue comes from service fees from bookings. Depending on the size of the reservation, guests are required to pay a 6-12% non-refundable service fee. A more expensive reservation will result in lower service fees for guests. Airbnb reasons that families or groups with larger reservations can save money for other travel expenses. With every completed booking, hosts are also charged a 3% fee to cover processing of guests payments. When a reservation is booked, guests pay the service fee unless the host cancels or retractsthe listing. If the reservation is altered, Airbnb adjusts service fees to accommodate users.5
Depending on local or international tax laws, users are also subject to a value-added tax (VAT). A value addedtax is a tax assessed on the final sale of goods and services. For guests seeking accommodations in the European Union, Switzerland, Norway, Iceland and South Africa, Airbnb charges a VAT in addition to its service fees. Due to different tax laws, Airbnb does not charge a VAT to every guest across the board. In particular, guests with reservations in the EU are subject to taxes based on the rate found in the guest’s home country. Furthermore, guests paying for bookings in a currency different than the one the host has chosen are subject to varying exchange ratesdetermined by Airbnb. Likewise, hosts are also subject to a value added tax which is deducted from income earned from booking reservations.