Running Head: CUSTOMER SATISFACTION PROCESS IMPROVEMENT AT AIRBNB

Customer Satisfaction Process Improvement at Airbnb

Student Name

Institutional Affiliation
CUSTOMER SATISFACTION PROCESS IMPROVEMENT AT AIRBNB 2

Introduction

For an organization to gain market leadership and have an increase in its profitability,

it needs to focus on its operations. To achieve this objective, customer satisfaction becomes

integral to the operations of a Business to Customer (B2C) organization. However, with the

rapid advancement of mobile services, internet, and social media, people are frequently

giving their reviews and opinions on products and services online (Heizer et al., 2019). These

opinions and online reviews shape customer buying decisions and reflect on the levels of

satisfaction the customers get. This trend has profoundly affected the hotel and hospitality

industry.

For this reason, this paper focusses on Airbnb to measure the process of customer

satisfaction. Airbnb is an online peer-to-peer platform that is among the most successful B2C

organizations globally. The company operates in 191 countries, where it offers over six

million unique accommodations in over 100000 cities. Airbnb offers hosting sharing services

that allow room or apartment owners to rent them to visitors and guests at affordable prices

(Airbnb, 2019). Recent research indicates that Airbnb offers rooms at much lower rates than

the hotel and home rates. Its rapid growth in popularity has disrupted the hotel and hospitality

industry. With the rapid growth in technology, many of the guests and customers book the

rooms online and later give a review after their stay. These reviews provide useful

information on features of the different products and services and give insight into customer

preferences (Lee & Kim, 2017). Therefore, these reviews give insight into the overall levels

of customer satisfaction, thus generating online word-of-mouth, which influences future

customers. In this regard, this paper seeks to examine how the process of customer

satisfaction can be improved in a B2C organization.

CUSTOMER SATISFACTION PROCESS IMPROVEMENT AT AIRBNB 3

As-is Condition

The main objective of this analysis is to examine how the process of customer

satisfaction can be improved in a B2C organization. For this purpose, the paper adopts

Airbnb as a case study to obtain the relevant information. Airbnb belongs to the hotels and

hospitality industry. The company provides a platform where people with underutilized assets

such as rooms or whole houses could rent them to guests for an additional income. It all

started in San Francisco in 2007 when two students faced difficulties in paying for an

apartment rental. Since most of the hotel rooms were sold out, they rented some part of their

room to guests. There, they got a business opportunity, and after a collaboration with a

programmer, they were able to connect guests looking for a place to stay with various places

across the globe. By doing this, they disrupted the whole hotel and hospitality industry

(Airbnb, 2019). If this progress continues, analysts estimate that by 2025, Airbnb will

accumulate around half a billion a day and gain one billion dollars annually (Griswold, 2015).

Each transaction in Airbnb involves two parties which are the host and the guest.

First, the host enlists their available properties free of charge. These properties can range

from castles to shared rooms. Photos of the rooms are taken by photographers who have been

contracted by the guests. Then, the guests subscribe to the website to view the various listings

and select one that best suits them. There are various filters on the Airbnb platform to ensure

the guests get what they want. After the host guarantees permission, the guest pays and gets a

stay guarantee. Both host and guest can access each other phone numbers, email addresses,

social media profiles, and reviews of what is being offered. Airbnb charges less than 13%

from the traveler and 3% from the host. However, this can vary based on subtotal changes.

Most of the rentals in Airbnb are entire properties though they still have shared rooms and
CUSTOMER SATISFACTION PROCESS IMPROVEMENT AT AIRBNB 4

private rooms. For instance, 74% of the listings in Lisbon are whole houses, with 24% and

2% for private and shared rooms, respectively (Airbnb(b), 2019).

To ensure customer satisfaction, Airbnb uses push notifications. Both the host and

guest have to download the Airbnb app and then select to receive push notifications. Through

push notifications, the guests have noted a significant reduction in the time required to book a

room through the use of push notifications. The company also requests reviews from its

customers through the review is optional. They often adopt the data collected to inform on

future business decisions.

Scholars have argued that Airbnb has not had a significant impact on the hotel

industry as it mainly targets young inexperienced travelers who want to save on cost. In 2014,

the CEO of Hyatt stated that he did not consider Airbnb as a competitor as it offered a

different product from the traditional branded hotels. Therefore, Airbnb does provide

customers who need meals or gym in the hotels with the satisfaction they need. A professor at

Cornell School of Hotel Management, Cathy Enz, adds that Airbnb provides leisure travelers

or groups with a better and cheaper option (Griswold, 2015). However, hotels mostly serve

and satisfy serious business travelers who prefer some form of accommodation.

Customer dissatisfaction can emanate from the negative receptions of the hosts and

the poor accommodation amenities. Most of the complaints that Airbnb received regarded

poor quality of service delivery than what they expected, the attitudes of the hosts regarding

whether they are friendly and willing to help if an issue arises during the stay, and the

amenities promised on the platform did not match the ones availed to the guests (Sparks &

Browning, 2011). The dimensions in the Airbnb platform are host, location, price, and

commodities.
CUSTOMER SATISFACTION PROCESS IMPROVEMENT AT AIRBNB 5

Quality Tools

Cause and Effect diagram

Host Location

Negative reception by host accommodation, not near restaurants

dissatisfied Airbnb
Customer

Overpriced rooms amenities on-site do not match to those

availed in accommodation facilities

Price
Commodities

The histogram shows the number of occurrences of the most used terms in the Airbnb

platform from a text mining procedure conducted by (Pascoal Barbosa, 2019)

Histogram
CUSTOMER SATISFACTION PROCESS IMPROVEMENT AT AIRBNB 6

Analysis

Some of the failures in service delivery result in insufficiency in attempts to match

customer expectations. For instance, a problem in the accommodation of a room will result in

low levels of customer satisfaction, thus an increased preference for other companies offering

the same service. The Attribution theory highlights three factors that lead to failures in

service delivery and the resulting customer dissatisfaction. These are causality, control, and

stability. Iglesias (2009) states that causality results if either the company or the customer

causes an issue. In case the company is responsible, the level of dissatisfaction in the

customer lowers, and the customer expects the company to resolve it. For instance, if a guest

hires a room through the Airbnb platform, but on arrival, the room is unavailable or non-

existent, they expect Airbnb to sort that issue and get another room to rent. If Airbnb fails to

improve or sort the issue., the customer is less likely to re-purchase the accommodation

service from Airbnb.

Stability refers to whether the issue is permanent (stable cause) or fearful (unstable

cause). When the customer expects a problem to be stable, they do not expect different results

in the future. However, if they consider a problem to be unstable, future projections become

uncertain. It results in reduced levels of customer satisfaction rather than subsequent failures
CUSTOMER SATISFACTION PROCESS IMPROVEMENT AT AIRBNB 7

in service delivery. for instance, if the house of a host gets damaged by a guest under the

Airbnb platform, they are less likely to offer their properties up for rent in the future.

However, if a guest always experiences delays in finding a room through Airbnb, they will

probably continue purchasing the service as they expect the same result in the future (Pascoal

Barbosa, 2019).

According to Hess et al. (2003), from a customer's perspective, the control means

whether a company has any kind of control over the service quality they provide. The

customer assumes that a company has no control over a recent failure if it keeps on providing

high quality services. Customer experience and more insights into how a company organizes

its services is crucial. It is because when a company has a strong reputation, a failure can be

regarded as a onetime occurrence and thus levels of customer satisfaction might not reduce

significantly. If Airbnb has a strong reputation, one mistake will not lower the levels of

customer satisfaction as the failure will be regarded as a single element among many positive

deeds.

Airbnb customers are exposed to more risks other than the monetary loss and

untrustworthy strangers. Guests have to constantly deal with unreliable hosts and how to

maintain their personal security. In Airbnb, the hosts rent their room to guests and thus the

whole condition or state of the hospitality is fully dependent on the capabilities of the host.

Therefore, many problems occur as hosts cannot foretell the reliability of the guest in

advance. A recent event is where a nineteen old boy was sexually assaulted by his Airbnb

host in Madrid. Though the sharing economy depends on trust among strangers, such

incidents are bound to cause distrust and customer dissatisfaction which will in turn

discourage consumers from adopting Airbnb as an alternative source of accommodations.

Recent studies have indicated that distrust is the leading cause of customer dissatisfaction
CUSTOMER SATISFACTION PROCESS IMPROVEMENT AT AIRBNB 8

which in turn, bars the successful adoption of Airbnb as an alternative source of

accommodation in the sharing economy (Sthapit & Björk, 2019).

The experience of customer results from their interactions with a company, product,

or part of an organization which in turn creates a reaction. The customer experience in Airbnb

highly contrasts that of a hotel industry. However, if the gaps are not checked, the

inefficiencies are bound to cause some constraints in the customer. One of these include the

perceived risk. It has been defined as an uncertainty that is felt concerning the negative

consequences of consuming a product or a service. It has been suggested that the perceived

risk of a consumer is the belief that negative effects will occur for purchasing a service. Zhu

et al. (2017) adds that is the loss potential of purchasing a service. In Airbnb, perceived risk

may hurt the business is not only online booking and transactions but also in offline

transactions, which include the actual consumption of the service and the resulting

experience. The perceived risk represents all negative results that a consumer can possibly

attach to purchasing a service in Airbnb.

Moreover, a lack to fill the gaps may result in distrust from the consumer and the

individual host may inhibit guests from choosing Airbnb as an alternative source of

accommodation. Trust indicates the willingness of a consumer to rely on the partner they are

going to exchange with. In the context of Airbnb, trust implies a consumer accepting a

vulnerability and trusting position from the exchange partner that they will fulfil their part.

The perceived fears of a consumers have been found to be the leading factors that cause

distrust in a collaborative consumption. Collaborative consumption is the ability to trust in

strangers. If the gaps inefficiencies are not addressed, Airbnb consumers will develop a lack

of trust in adopted technology, a lack of interpersonal trust between the host and the guest,

and an overall lack of trust toward Airbnb and its attached packages.
CUSTOMER SATISFACTION PROCESS IMPROVEMENT AT AIRBNB 9

Failure to institute changes to the gaps inefficiencies will also lead to unfamiliarity.

Coupled with the fact that Airbnb is a relatively new consumption model, perceived risk and

increased distrust might cause unfamiliarity where potential consumers will have less

knowledge on his type of service. The lack or insufficient knowledge will in turn act as a

constraint in the adoption of peer to peer accommodation. This lack of information has been

linked to self-efficacy. Consumers might end up failing to consume or take up a service since

they feel incompetent to adopt such. In the sharing economy, since the service offered by

Airbnb is considered somehow new, the consumer's self-efficacy will influence their attitude

towards ridesharing applications. Zhu et al. (2017) found out that efficacy is the main barrier

to effective peer-to-peer accommodation. It has been suggested that an increase in familiarity

levels will increase the adoption of collaborative consumption.

To be condition

Today, all companies who want to attain and retain a competitive advantage over its

competitors have to embrace continuous improvement of the customer experience to ensure

customers are satisfied. It is because the experience of customers is integral in getting new

businesses and retain customer loyalty to the company. However, measuring the delivery of

customer experience is not a one tie affair but a continuous one. it is simply because customer

demands and expectations are continuously changing, and what they considered to be

exceptional today might not be special tomorrow. Businesses have to improve continually or

else they risk being left behind by their competitors. Therefore, all businesses must establish

a never-ending customer satisfaction improvement process, which will create positive

customer experiences. It helps to keep the customers happy and boost and retain crucial

customer loyalty. According to the adopted cause and effect diagram, in Airbnb, the issues

that are known to cause customer dissatisfaction are location, host, price, and commodities.
CUSTOMER SATISFACTION PROCESS IMPROVEMENT AT AIRBNB
10

Some of the proposed suggestions that will improve levels of customer satisfaction at

Airbnb are stipulated as follows. One, the company should consider issuing temporary

refunds when a customer wants their money back. Just like credit card companies do when

there is a dispute. Essentially, Airbnb is a middle man that profits from the transactions

between the host and guest. By giving temporary funds pending solving a dispute gives a

customer some form of peace of mind. It is the least it can do when it benefits from all

transactions between the host and guest.

Since Airbnb is a multibillion organization, it should consider training support agents

in all major cities so that they can go and inspect, resolve, mediate issues to do with the safety

of the rentals. Most of the customers complain that the amenities at the Airbnb platform do

not correspond to what they get at the rentals. Though this might be costly and need many

resources to implement, having ground support to sort out issues will go a long way in

ensuring the company receives positive reviews from the customers. Positive reviews indicate

that the customers were satisfied with the service received. Moreover, Airbnb should also

consider enabling their support agents to respond to customer requests by phone. When in

need of assistance, customers have to send and receive long emails from the support team at

Airbnb. Also, it should consider avoiding sending a customer from one agent to the other as

that just increases their dissatisfaction.

Airbnb should provide their customers with clear steps and guidelines so that the

customer will know what to do next. Since someone already trusted the company enough to

hire accommodation with them, it is important to show some concern. In case a rental at

Airbnb fails, for instance, due to unsafe reasons, false advertising, or something substantive

with the rental, Airbnb should consider having back-ups to ensure the customer is not

inconvenienced.
CUSTOMER SATISFACTION PROCESS IMPROVEMENT AT AIRBNB
11

Furthermore, the adoption of the above-stipulated strategies will prove beneficial to

all stakeholders. Airbnb will record improvements in their profitability and will retain its

competitive edge. Stakeholders will record increased dividends due to increased company

profits. Most importantly, customers will be satisfied. Satisfied customers will give positive

reviews that influence the behavior of potential customers. Moreover, the level of distrust

among the customers will reduce significantly.

Quality tool

Cause and Effect diagram

Host Location

Give temporary funds in dispute have support team check out the location
Have a support team to resolve and mediate. train support team to answer issues by
phone
satisfied Airbnb Customer

Offer rooms at a standard price. Have support team inspect amenities

avoid passing customer to varying agents ensure they provide what they promise

Price
Commodities

Conclusion
CUSTOMER SATISFACTION PROCESS IMPROVEMENT AT AIRBNB
12

If an organization aims to be a market leader and increase its levels of

profitability, it needs to focus on its operation management. Any B2C organization needs to

pay close attention to levels of customer satisfaction. For a company such as Airbnb, online

reviews shape how potential customers view the company and thus base their buying trends

on such reviews. Customer dissatisfaction at Airbnb has been attributed to the host being

unwelcoming, the location of the rental is far from social amenities such as restaurants and

parks, the rooms are often overpriced, and the amenities that are advertised on site are not

what is availed in the rentals. If not checked, these elements might cause distrust,

unfamiliarity, and perceived risk among the customers. In turn, this will hurt business, and

Airbnb will not be able to retain a competitive edge in the hospitality sector and will hurt

stakeholder requirements. In this regard, this paper identifies various recommendations that

Airbnb should adopt to ensure customer satisfaction. Satisfied customers lead to Increased

business. As Mahatma Gandhi once said, a customer is not dependent on the business, but the

business depends on the customer.

CUSTOMER SATISFACTION PROCESS IMPROVEMENT AT AIRBNB
13

References

Airbnb. (2019). About Us - Airbnb Newsroom. Airbnb Newsroom. Retrieved 19 April 2020,

from https://news.airbnb.com/about-us/.

Airbnb(b). (2019). O Que é a taxa de serviço da Airbnb? | Centro de Ajuda da Airbnb.

Airbnb.pt. Retrieved 19 April 2020, from

https://www.airbnb.pt/help/article/1857/what-is-the-airbnb-service-fee.

GRISWOLD, A. (2015). Slate's Use of Your Data. Slate Magazine. Retrieved 19 April 2020,

from

http://www.slate.com/articles/business/moneybox/2015/07/airbnb_disrupting_h

otels_it_hasn_t_happened_yet_and_both_are_thriving_what.html.

Heizer, J., Render, B., & Munson, C. (2019). Operations Management. Pearson Education,

Canada.

Hess, Jr., R., Ganesan, S., & Klein, N. (2003). Service Failure and Recovery: The Impact of

Relationship Factors on Customer Satisfaction. Journal Of The Academy Of

Marketing Science, 31(2), 127-145. https://doi.org/10.1177/0092070302250898

CUSTOMER SATISFACTION PROCESS IMPROVEMENT AT AIRBNB
14

Iglesias, V. (2009). The attribution of service failures: effects on consumer satisfaction. The

Service Industries Journal, 29(2), 127-141.

https://doi.org/10.1080/02642060802293088

Lee, S., & Kim, D. (2017). Brand personality of Airbnb: application of user involvement and

gender differences. Journal Of Travel & Tourism Marketing, 35(1), 32-45.

https://doi.org/10.1080/10548408.2017.1284030

Pascoal Barbosa, S. (2019). AIRBNB CUSTOMER SATISFACTION THROUGH ONLINE

REVIEWS. Repositorio.iscte-iul.pt. Retrieved 19 April 2020, from

https://repositorio.iscte-

iul.pt/bitstream/10071/19160/1/Master_Sara_Pascoal_Barbosa.pdf.

Sparks, B., & Browning, V. (2011). The impact of online reviews on hotel booking intentions

and perception of trust. Tourism Management, 32(6), 1310-1323.

https://doi.org/10.1016/j.tourman.2010.12.011

Sthapit, E., & Björk, P. (2019). Sources of distrust: Airbnb guests' perspectives. Tourism

Management Perspectives, 31, 245-253.

https://doi.org/10.1016/j.tmp.2019.05.009

Sthapit, E., & Björk, P. (2019). Sources of distrust: Airbnb guests' perspectives. Tourism

Management Perspectives, 31, 245-253.

https://doi.org/10.1016/j.tmp.2019.05.009

Yannopoulou, N. (2013). User-Generated Brands and Social Media: Couchsurfing and

Airbnb. Contemporary Management Research, 9(1), 85-90.

https://doi.org/10.7903/cmr.11116
CUSTOMER SATISFACTION PROCESS IMPROVEMENT AT AIRBNB
15

Zhu, G., So, K., & Hudson, S. (2017). Inside the sharing economy. International Journal Of

Contemporary Hospitality Management, 29(9), 2218-2239.

https://doi.org/10.1108/ijchm-09-2016-0496