Airbnb Case
Tyler Gendron
661082631
Airbnb Case
There are several key issues that Airbnb faces throughout the case. The biggest key issue that the company faces is maintaining the trust of their market participants, both hosts and guests. It became hard for hosts to trust who they were renting their room, apartment, or house to after several previous hosts had their places destroyed and valuable items stolen. It also became hard for guests to trust the room that they were renting after several previous guests were unhappy and mislead by the host. Both resulted in the reputation of Airbnb to significantly decrease and they began to lose customers fast. The other key issue that Airbnb faces is their online reputation system. There is a lot of missing information in their online system that makes for worried and discomforted customers. Users on the Airbnb site would have incomplete profiles, some with even only a first name. The company also had a weak consumer review system and it lacked common features. In their system they even penalized hosts that turned down reservation requests for a posted room by making that host appear lower in the search results. This makes no sense as a host should be able to reject a guest’s request if he or she feels uncomfortable with that guest without a penalty. In addition, the company’s online system did not prescreen hosts or guests at all and they don’t provide insurance for hosts or guests. There are a lot of key issues that Airbnb faces in this case, critical decisions need to be made immediately to build up the company’s reputation and regain people’s trust.
To understand the external environment of Airbnb there are a few things that you must know. The defined industry of Airbnb is a social networking service for people to rent out lodging. Within this industry, they are a big player, as of July 2011 the company was reportedly valued at $1 billion and had rented over 2 million rooms. Their chosen competitive strategy is
661082631
Airbnb Case
There are several key issues that Airbnb faces throughout the case. The biggest key issue that the company faces is maintaining the trust of their market participants, both hosts and guests. It became hard for hosts to trust who they were renting their room, apartment, or house to after several previous hosts had their places destroyed and valuable items stolen. It also became hard for guests to trust the room that they were renting after several previous guests were unhappy and mislead by the host. Both resulted in the reputation of Airbnb to significantly decrease and they began to lose customers fast. The other key issue that Airbnb faces is their online reputation system. There is a lot of missing information in their online system that makes for worried and discomforted customers. Users on the Airbnb site would have incomplete profiles, some with even only a first name. The company also had a weak consumer review system and it lacked common features. In their system they even penalized hosts that turned down reservation requests for a posted room by making that host appear lower in the search results. This makes no sense as a host should be able to reject a guest’s request if he or she feels uncomfortable with that guest without a penalty. In addition, the company’s online system did not prescreen hosts or guests at all and they don’t provide insurance for hosts or guests. There are a lot of key issues that Airbnb faces in this case, critical decisions need to be made immediately to build up the company’s reputation and regain people’s trust.
To understand the external environment of Airbnb there are a few things that you must know. The defined industry of Airbnb is a social networking service for people to rent out lodging. Within this industry, they are a big player, as of July 2011 the company was reportedly valued at $1 billion and had rented over 2 million rooms. Their chosen competitive strategy is