Introduction
Air Bed & Breakfast (AirBnB) is an online commercial center providing people with a channel to find and lease an apartment. AirBnB is a company which provides the rooms, hotel and hostel accommodation online at cheaper prices and was launched in August 2008 . The concept was initially foreseen by Joe Gebbia and Brian Chesky during a conference on industrial design. Their innovative site provided short span living quarters with breakfast. It also provided an exclusive networking business opportunity to attendees unable to have an opportunity booking a hotel in the inundated market. The two converted their living room in San Francisco to accommodate three guests and afterwards providing breakfast. During inception, their focus was on high profile occasions where lodgings were scarce.
The site was launched officially on August 2008, and to get funding they came up with breakfast cereals referred to as special edition with inspiration from presidential candidates John McCain and Barrack Obama generating about $30,000. AirBnB not only empowers voyagers to book remarkable home stays from nearby houses, sparing them cash and allowing them to associate with local people but also empowers individuals to list their accessible space and procure additional salary as rent. Obliging the travel industry, AirBnB is available in more than 190 nations over the world .
Customer Segment.
AirBnB is a C-to-C e-commerce platform that aims to find accommodation places for a short period of time. AirBnB segmentation of customers can broadly be categorized into business travelers and personal travellers. Personal travelers are presumed to be the core of AirBnB travelers since they generally are sensitive to prices and flexible in their schedules in regards to where the customers stay. The business traveler being viewed as the highest paying client also tends to be heading towards AirBnB’s platform due to the fact that it allows the customers to appreciate and get value for their money. AirBnB is deemed to do well among their business travelers, in the sense that they stay in one place for a longer period of time same way as the project-based travelers who include people such as; consultants, who always settle for a place that feels more like home as opposed to just a hotel.
Channels.
AirBnB gets its clients through the following primary channels: Online publicizing, PR, and verbal communication.
a) Online advertising is a major channel as AirBnB is quite determined in utilizing online marketing with their ads on an extensive network in partner sites and also on major search sites.
b) Public Relations is one of the greatest capabilities in its inception. Almost everybody has heard of the story on how the initiators sold cereal in the US elections in order to bootstrap their beginning company. Thus the founders have been participating in press events and conferences continuing to be visible in the media to date.
c) Word-of-mouth is another component that AirBnB focuses on and the outcome has been exceptional. The founders understood that providing users with noble experience, the probability was the word would be spread fast. Thus a lot of effort has been put in order to provide users with an outstanding experience both before and after booking. They have also provided users with social sharing tools facilitating the spread the word.
D) The reason why AirBnB never focused on SEO is the team understood that optimizing it would mean trading it off with user experience and great design. AirBnB desired to scale quickly and knew organic traffic to be difficult and slow to reach many areas in which it operated. It knew that sites like virtual tourist and trip advisor were much ahead in terms of user generated content and had operated for a long time in the market hindering their scale to the top in terms of popular searches.
5. Value Proposition
The principal value of AirBnB is making use of underutilized assets for this case a house and letting owners make an income from it. AirBnB offers a platform which is easy and due to its pervasiveness has gained a lot of trust. This is of importance to homeowners who naturally worry on letting strangers. AirBnB tackles this by compelling users log in through their social networks, providing insurance and establishing credibility through user reviews. Thus this value is not addressed by other smaller sites.
6. Key Activities
The key activities that AirBnB incorporate in their routine are; product development, community management and marketing of their property holders. AirBnB is on a number of countries and has a team that understands the key associate partners in different key markets. AirBnB is known for having one of the best groups in the tech business as they are consistently enhancing their stage utilizing the front line methods. AirBnB has country administrators who perform the task of carrying out offline events and ongoing online events creating a form of community and the interaction of apartment and home owners. By making an effort to listening to the input of these gatherings, they thus expand loyalty to the AirBnB stage .
7. Key Resources
One of the best assets AirBnB has is its well-networked founders who have figured out how to get a large portion of the best known assets in Silicon Valley to contribute. This has permitted them raise a huge amount of capital and thus work easily without worrying about cash outflows and without pressure of investors exit. AirBnB has been able to attract among the very best design and technical talents competing with major firms such as Facebook and Google.
8. Key Partners
One of the key partners for AirBnB is the tourism ministries in different countries. The laws and regulations around AirBnB are still exceptionally dubious and thus frequently represent the deciding moment issue for a significant number of their home and condo proprietors on the stage. For instance in New York, AirBnB has been battling in the courts for quite a sometime fighting that AirBnB property holders are not subject to the same principles and assessments as hotels, as this would basically execute the business.
9. Taking a toll Structure
AirBnB guideline costs can be categorized under gatherings, innovation, showcasing and bargains. Improvement incorporates those liabilities from claiming main developers, server space and different modifiers that they tolerate. Assertive incorporates are paid to publicize by utilizing the public relations that they do in limitless businesses all around the world. A bargain usually incorporates the country administrators and their gatherings which they keep up in their considerable businesses.
AirBnB is essentially a business that focuses on point of action; those that run off the company component of such models only gain little time with respect to the business segment. This is the motivation behind AirBnB which is precious with budgetary specialists . Also the motivation behind AirBnB will be essential later on with the greater part concerning issue confronted. Eventually perusing travellers or hosts using AirBnB is the trust component. Considering all things giving your space to a stranger is an illustration to being a host and existing from the outskirts a voyager will not have a chance to be straightforward. Whichever the case, AirBnB needs an outweighing procedure set up for every host and voyager with respect to its stage. Apart from checking identification, AirBnB correspondingly inspires people to join with their Facebook account for security purposes.
Association in the AirBnB might have been during those Y-hatchery, Paul Graham lessons which recognize "it's perfect gas to need 100 people who appreciate you over hosting a million people that are against you". Therefore, AirBnB condensed once "making what people need" and creating a feeling about "Hosting a place". Towards interfering with its assembly through story-inviting so concerning illustration on stake on the AirBnB site Also customers were invited to make a logo update. AirBnB also cooperated with the close-by gathering secret word ‘the virtual space’, through acquaintanceships with city overwhelming presences clinched alongside San Francisco, also, Portland over recognizing hosts with assistance uprooted people in the event of an emergency.
This particular essay focuses on analyzing the AirBnB specific characteristics, substantial fundamentals of working patterns, as well as examining future potential business outcomes in terms of financial approaches to develop AirBnB program further . Consequently, AirBnB program is considered to serve as a primary source of searching a convenient place to temporarily live in a certain community, especially exchange and international students from abroad. AirBnB program serves as an initial basic option to provide and promote a variety of different rooms, apartments, and places to live for a limited amount of time – taking into account the advantages of financial opportunities and comfortable attributes.
AirBnB business model canvas explains the key sources, key activities, value propositions, customer segments, key partners and the channels followed. The revenue streams and cost structure are also part. The five step model on the operations of AirBnB is:
Details on the host’s property are listed with factors such as amenities provided and prices taken into consideration.
High quality pictures of the property location are taken by a professional sent by AirBnB.
Travellers begin their search of property in their desired cities considering the options at hand.
Traveller pays after booking via AirBnB as decided by the host incurring some transactional charges.
The host will finally approve the booking and AirBnB deducts their commission and pays off the host.
Revenue model
The business model usually used is where the monetary transactions and bookings are on AirBnB policies. It offers property listings usually free and allow travellers search choose the one that suits them. A commission of 10% is charged by AirBnB from host for the case of any booking through this channel. The travellers are charged 3% as transaction charges upon confirmation of booking .
AirBnB finds customers via a website they created, social media, digital marketing, word of mouth, promotional offers and affiliate models.
The major problem encountered by AirBnB is trust problem since there are always differences between the host and the traveller. AirBnB has tried counter this by putting in place a verification process.it provides badges and encourages people sign up with their online accounts for transparency. Traveller retention is also another major problem. AirBnB has countered this by giving credits, promotional codes and offers to frequent travellers. Hosts are also given
This business idea supports and provides different international students from different cultural backgrounds with the required and convenient information. This is to be able to easily and availably figure out the potential approaches in finding an all-rounded comfortable place to live. This is for a while when the particular student will study and live in that foreign country. Furthermore, this business facet of the Internet business is generally comprised of an awful lot of different opportunities to enhance and evolve further. Also, this idea could potentially bring and attract a great amount of financial investments, including local and international investments, respectively. Thus, those distinctive financial investments would hugely devote Airbnb’s further development. This is in different types of facets of the Internet business along with social community life’s aspects of convenience. One of the other possible characteristics of the AirBnB program is the business model pattern that works in a specific approach of C-to-C (customer-to-customer), which enables a variety of other business development opportunities in different directions. Hence, this particular business program approach would allow different parts of the business process for customers to interact with other customers. To sum up, this program would dramatically and gradually improve as well as enhance and evolve the differences along with features of this particular business model in the end.
Promotions such as motivating them go on holiday and dwell in an AirBnB in their preferred destination.
References
Dissecting AirBnB’s Business Model Canvas. (2014). Retrieved February 26, 2016, from http://www.kenontek.com/2014/02/09/dissecting-airbnbs-business-model-canvas/
Eisenberg, S., & Lamalfa, A. (2015, November 4). The Sharing Effect: Airbnb's Impact on Real Estate Market. Real Estate Weekly.
Ribbers, J., Kapadia, H., & Airbnb, Inc. (2014). Get paid for your pad: How to maximize profit from your Airbnb listing.
