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The Key Factors of The Future Success Or Failure of Airbnb

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The Key Factors of The Future Success Or Failure of Airbnb essay

Being successful in the Sharing Economy means building a business style that’s based on trust, authenticity and transparency with your customers. Airbnb has been successful in the Sharing Economy by several key factors. First, Airbnb opened a new kind of lodging by allowing hosts to offer spare rooms or entire homes to potential guests, in a peer-reviewed digital marketplace. Their business is increasing at an impressive rate and was recently valued at $30 billion which makes them currently the World’s largest hotel group without possessing a single hotel. By leveraging the abundant usage of smartphone and the continual technology costs decreasing, Airbnb provided a platform for individuals to instantly share several resources. As a result, a homeowner with an extra room could offer it for rent. The individual can simply sign up through the platform and began to offer the service. User therefore can rent that space. Next, Airbnb is the middle man between hosts and guests. This is from where the company earns its share of revenue from two different sources. The company charges 11% commission from hosts upon every booking done through the platform and a percent of the booking amount as transaction charges from traveler upon every confirmed booking.

They also decouple revenues from the considerable operating expenses of traditional lodging businesses and provided it with significantly smaller amount of operating cost than hotels, motels and bed and breakfasts. Rather than expenses related to owning and operating real estate properties, Airbnb’s expenses were that of a technology business. Therefore, Airbnb made a change in the consumer experience. They believed guests desired a community and a closer relationship with the host. If the hosts help the guests live like a resident and help them to explore lesser known secret places, guests feel welcome and at home. This is one of the areas where Airbnb blows away competitors with their meaningful content. Visiting the website and going to the stories section will enable users to get an understanding into the world of hosts and guests and their stories and experiences. These stories are meant to engage and build an emotional attachment with the readers.

I would recommend Airbnb to spend more money in research and development to find more ways to expand its business to more than a bed-sharing app. The company should increase its market share in the industry, as the company will face an aggressive reaction from its competitors plus Airbnb today is valued more than many hotels that are asset-based companies which is an advantage for the company right now. Airbnb should try to provide more services to its customers than just providing a bedroom, as the company should make the customers experience more interesting than just that. Airbnb should expand more in other places around the world to attempt to cover as many geographic areas that are dominated by their competition. The company’s main weakness is to ensure that their customers are in the safest areas and hosted by the safest hosts.

It is not advisable to have strangers in your house at night and vice versa. Theft, destruction of property, kidnapping are the reasonable threats which are related with the AirBnB bed-sharing and thus the customers prefer to stay in hotel. In fact, most of the insurance companies are not providing coverage for AirBnB host. The attempts should be made by AirBnB to prepare some comprehensive insurance plans which can mitigate the risk away from the insurers. They should expand in making the customers experience safer by running more background checks on the both parties, making sure of the safety of the host and the customer. Also, give incentives or provide insurances to protect their customers from inconveniences such as theft of loss of their belongings.

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The Key Factors Of The Future Success Or Failure Of AirBnB. (2019, September 13). GradesFixer. Retrieved September 29, 2022, from
“The Key Factors Of The Future Success Or Failure Of AirBnB.” GradesFixer, 13 Sept. 2019,
The Key Factors Of The Future Success Or Failure Of AirBnB. [online]. Available at: <> [Accessed 29 Sept. 2022].
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