International

Marketing

Group B3
Asmita Chakraborty 2015011 || Paulomi Basak 2015100
Pratyay Mukhopadhyay 2015106 || Ankita Singh 2015193
Sautrik Joardar2015233 || Soumasish Chakraborty 2015238
 Case Facts - Airbnb

Business Domain Short term home rent / rental accommodation

Established August 2008
Founders Brian Chesky, Joe Gebbia, Nathan Blecharczyk
Head-Quarter San Francisco, California, US
International Presence 25 million guests, 900,000 listings, 34000 cities, 190
countries
Business model Collaborative consumption & peer-to-peer property rental
business model

Timeline
2007 2008 2009 2010 2014 2015
Unable to Airbnb was $20,000 $7.2 million $10 billion $850
afford rent, found (angel & $112 valuation million
owners investor) million (March) forecasted
offered rent $600,000 venture $13 billion revenues
to (Venture funding valuation
strangers Capitalist) (October)
 Business Model- Airbnb

Airbnb Third party Technology platform

Facilitates hospitality arrangements between hosts and guests
Implemented customer verification, theft/damage insurance, authentic guest reviews, social
media presence
Hosts Guests

Free Sign up and register with personal
and property details
Revenue: 3% host fee, service (during
reservation)
Segment: middle income bracket, self
employed (freelancers / entrepreneurs)
Free sign up, search and book
accommodation, contact host and make
payment
Segment:
Leisure traveler (majority) vs. business
travelers (minority)
Urban vs. Rural
International vs. Local. vs Regional
travelers
Revenue: : 6% - 12% transaction
 Peer-to-Peer Property Rental Industry Analysis

Sharing economy
Sharing of human and physical resources by different people and organizations
Airbnb - Individuals interact with each other on two-sided marketplace platform, maintained by
third party
Competitors - Airbnb (market leader), HomeAway (US), Wimdu (Germany), Booking.com
(Netherlands)
ExcessProposition
Value of idle Govt.
- Variety operations
of properties, Population
trust, authentic Social
cust. reviews, 24*7 cust. service,

Technology drivers
Political drivers
Economic drivers

Social drivers
inventory
payment security. Legal systems
Legal systems density Networking
Inaccessibility to Taxation Sustainability Increase of
luxury mindset mobile phones
Licensing
Venture Independent Online payment

Technology
Capitalist Youth Lifestyle systems
funding Source of Airbnb Online
income marketing
Craigslist,
Google (SEM),
 Issues - Airbnb

Uncertainty (stagnation/decline)
in online hospitality market in
Spain posing a threat to
sustainability of the industrys
future growth in Spain
 Issues - Airbnb

House prices Deprive Govt. of Threat for the Non-interference

Non-interference

Technology
Economic

Political

Social
going up for taxes (rental local residents in the kind of
locals as people income due to explosion digital content,
buy houses to generated) of tourist No regulations in
rent out as Violate accommodations case of safety,
vacation rentals, consumer rights, Many hosts have theft, damage of
leading to security and more than 1 property
scarcity of quality issues listings Non liability
properties about the
Harm image and Most visits take
reputations of place in central authentication of
tourist areas of the the hosts or
destinations cities, locals guests
Banned by few being pushed
countries out
Locals cant find
homes to rent,
pushed out of
Challenges - Airbnb

Criticism of shared economy

Deprive Govt. of taxes, increase illegal employment, violate consumer rights, security
and quality issues, harm image and reputations of tourist destinations
Unregistered accommodation tax, health and safety issues

Cannot expand in certain destinations banned by few countries

Unique local challenges: Credit cards arent supported in Cuba, and the island has limited
Internet coverage
Threat of dissolving legal immunity
Online sites might have to face liabilities of brick and mortar organizations. Eg. Uber, if
treated as a transport company might have to own assets and pay taxes that is
analogous to any transport company. In brief, tax regulations and reducing legal
immunity might disrupt online business model

Financial Dilemma: Taxes will certainly affect the revenues. How to compensate ? Can
the taxes be carried forward to the end consumer or the hosts need to bear the cost ?
Solutions

Transition into an immersive travel experience company rather

than being just an accommodation provider : Airbnb Trips
Book experiences designed and led by local experts
Discover secret spots / offbeat places recommended by local
insiders & host communities
Co-hosts to help with listings while primary host is away

Advantages:
Strengthens Airbnbs positioning of Belong Anywhere
Truly local and authentic experience : POD from regular tour
operators and hotels
Personalized experiences can target premium segments and
increase revenues
 Solutions Tie Ups, Premium segment and EUs
digital marketplace

Premium Segment:
Exclusive contracts with property dealers sharing a part of the
property tax which will entice the dealers to hold contracts
Tie ups with Furniture and home dcor companies across Europe for
host development and spot improvement. The cost of the
improvement will be borne by the host but will get a discounted
price for the service. The same can be adjusted with the guarantee
of sell. Both the provisions will be a part of contract. The incentive is
to increase revenue in absolute terms for host and Airbnb from per
unit of sale. This model if successful can be applied to existing hosts
Leveraging EUs Digital Marketplace:
with is
The crucial point listings
standardized tax rates. This will not only legitimize AirBnbs and other online
marketplaces business models but provide greater lobbying potential to compete with hotel
lobbies. The Benefits derived will be concentrated, thus AirBnb aill find supporters. Therefore, tie-
ups with other market places will be easier. For instance Uber can be become a transportation and
travel partner
Best Practices - Airbnb

Right mix of International standardization and adaptation

Standardization of Technology (Centralization) and Adaptation of
marketing practices(Decentralization)
Creating market needs for hosts and international travellers
Leisure travel: Tapping on providing the local experience
Free membership and free access
Handling all financial transactions Balanced and authentic review
system
Customer verification, theft/damage insurance
Involving Craigslist and Google