Running head: AIRBNB SWOT ANALYSIS 1

AIRBNB SWOT ANALYSIS: Anyone Can Belong Anywhere

Team Time Zones

OGL355: Leading Organizational Innovation and Change

Bill Erwin

05 June 2022

Arizona State University

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AIRBNB SWOT ANALYSIS: Anyone Can Belong Anywhere

If you are looking for the American dream made true, look no further than

Airbnb. In 2008 Brian Chesky, Joe Gibbia, and Nathan Blecharczyk started out with the

novel idea of renting out air mattresses in spare rooms for local events; fast forward 13

years and you will find a global organization managing an annual revenue of ~$4 billion

who has been publicly declared a threat by the trillion dollar hotel industry (Wikipedia

Contributors, 2022).

Their self proclaimed mission is to create a world where anyone can belong

anywhere. The idea being that anyone should be able to find their perfect vacation and

Airbnb is dedicated to empowering vacation rental entrepreneurs in making those places

a reality. The question we want to consider is what will it take for Airbnb to accomplish

such a reality now and in the future.

SWOT Analysis

To answer such a question we are going to utilize an analysis of Airbnb’s

strengths, weaknesses, opportunities, and threats. The strengths and weaknesses of the

analysis will utilize internal data to assess what Airbnb is capable of doing with its

members and the resources available to them within their organization. The analysis will

also utilize external data when evaluating the opportunities and threats of the

organization. This will allow the analysis to identify the potential barriers currently

present in the vacation rental industry and any potential trends that could disrupt Airbnb’s

business. Utilizing this internal and external data we will then leverage the SWOT

analysis to identify strategic goals that would chart a path for Airbnb to successfully

facilitate places that anyone and everyone can value and enjoy.
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Strengths of Airbnb

Airbnb excels in the field of brand recognition and their lead is so vast that they

have over 5.6 million active listings in 220 countries according to The Zebra, compared

to their next competitor who has around 2 million listings. With so many listings, there

are guaranteed to be a wide variety of properties that the guest can choose that will fit

their travel needs. For example, if you want to stay in a camper that is in the middle of

nowhere, secluded from society, it is likely that you will be able to find a place to stay.

Some examples of listings that qualify for this niche include, “sleep in a literal tube at

this round-stay campsite in Portugal for $34 a night! How fun is that little deck?

Campsites are also popular in New Zealand and several regions of the U.S. on Airbnb,”
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and, “Stay in an igloo (basically clear bubble tents) to experience nature all around you.

This unique Airbnb dome house in Canada is decked out with awesome lounge areas.”

(Stutzman, 2022) Airbnb has a wide variety of eccentric places for everyone to

experience. You can pick your destination and then also pick a fun living experience with

your vacation. As they are dependent on people posting their listing on the site, it is

recommended that you take a survey after your stay to ensure that it is exactly what was

in the posting. In this way, the system self-ensures that future guests are up to date on

exactly what to expect and can help the host improve their listing. The questionnaire,

along with the unique listing, are the strengths of the company because it gives more

information and insight to the listing, adding more value to the rental if it proves to be

beautiful with an amazing host that elevates the experience. By placing more emphasis on

these gestures, Airbnb can build upon its strengths in this highly competitive market.

Airbnb Weaknesses

As successful as Airbnb has become in the past fourteen years it still suffers from

the weakness of not being able to enforce host standards. Airbnb puts a large amount of

faith in the hosts who list their properties on the site. There are Host Reliability Standards

listed on the company website which state, “in the interest of guest safety, satisfaction,

and comfort, Airbnb requires that all hosts provide listings that meet a minimum standard

of cleanliness.”(Host Reliability Standards, 2022). Host Reliability Standards also state

that hosts must provide accurate booking details such as location, room type, and

amenities (Host Reliability Standards, 2022). It is frustrating for guests who book a

location and arrive at an uncleanly and uncomfortable listing that is not accurate to the
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listing. Although Airbnb has posed requirements that hosts must follow, it is not

guaranteed that they will be obeyed. This leads to negative reviews by word-of-mouth

and online which can be a detriment to Airbnb’s profits. It is recommended that Airbnb

enforces that the listing’s host provides proof that the listing has been professionally

cleaned after each booking. The listing should also be vetted by Airbnb to ensure that the

location is where it claims to be. These small changes will help to ensure that Airbnb

remains as profitable as possible.

Another weakness is the uncontrollable prices by hosts. In many cases the hosts

dictate the prices of the listing, “while some just charge enough to cover the costs of

utilities and basic needs, others consider their space a premium destination and charge

well above its true worth” (Gaille, 2021).

Current and Upcoming Opportunities for Airbnb

Airbnb has completely transformed the hospitality industry since their launch in

2008. With over 6 million active listings in 220+ countries Airbnb provides customers

with a variety of travel destinations, new possibilities, and a unique travel experience.

(Airbnb, 2022)

While the growth of Airbnb has been undeniable, the recent pandemic hit the

organization hard. In the height of the pandemic, many borders were closed, travel bans

were in place, and customers had to cancel their plans. Airbnb saw an 80% decline in

their business. (Airbnb, 2022) However, Airbnb rebounded faster and better than many

hotels, going public in December 2020. (CBS News, 2020) Airbnb used the challenges of

the pandemic to assist in innovating their business to find new opportunities for growth.
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Finding opportunities for growth is key to organizations like Airbnb. To grow,

stay competitive, and make a profit, organizations must be innovative and agile. Our text

describes opportunities as, “Positive external trends or changes that may help an

organization improve its performance.” (Coulter, 2013) There are two focus areas that

Airbnb can optimize its performance, they must innovate and offer new segments and

expand into additional markets.

Airbnb’s core focus is to provide a unique experience for travel via home

accommodations. Being in such a competitive industry, Airbnb must innovate and offer

additional options for customers, becoming more than just finding a place to stay.

Appealing to the interests of their customers and hosts by offering other components like

car rentals, travel guides, improved mobile app experience, and even airline purchases

can really push Airbnb to an ultimate competitive advantage. (Introducing the New,

2022) This would allow Airbnb to become a one stop shop for customers. This

recommendation would allow Airbnb to appeal to new travelers and keep Airbnb

competitive.

The second opportunity for growth is market expansion, specifically in China and

India. According to the World Travel & Tourism Council, travel will be increasing to

emerging economies at more than twice the rate. (News Article | World Travel & Tourism

Council (WTTC), 2022) This provides Airbnb with the opportunity to expand their

markets into additional countries and regions. This will offer customers additional

options for travel, provide additional opportunities for hosts, and provide additional

growth and brand visibility. This recommendation would also decrease the competition
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by emerging into additional market segments, increase revenue profitability, and allow

for future growth in multi-business ventures.

Without looking for and seizing opportunities, most organizations would not grow

or stand the test of time. As customers' wants and needs are evolving, organizations like

Airbnb need to continue to anticipate and provide customers more options for travel,

connection, and a unique experience that separates them from their competitors.

Foreseeable Threats to Airbnb

There are numerous threats currently on the radar of Airbnb, with almost all of

them revolving around laws and regulations. Firstly, regulations and laws for platforms

such as Airbnb, that offer house sharing and rentals have come under attack after

single-family home communities have had waves of rental properties show-up on the

platform. This has left the neighbors in these communities to deal with the renters and

their behavior. Enough individuals have complained and brought up issues with these

properties, that it has led to sweeping changes of laws, codes, and regulations to limit the

properties that are utilized as rentals. Many cities have implemented requirements that

rental properties must register or be permitted with a government agency, whether that is

city, state, or municipal, to track (and profit off) the number of rentals in specific areas.

These sweeping changes that are occurring, are not limited just to the United States,

countries, and cities around the world, are implementing legal and regulatory changes.

This has left Airbnb with the threat of non-compliance of such changes. In response to

these legal and regulatory changes, Airbnb has aggressively ramped up litigation against
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some of the largest cities in the United States to clarify where it stands legally. (Carville

et al., 2020)

Another threat to Airbnb is the non-compliance of rental properties with local

ordinances such as enough smoke detectors for the property, fencing around pools,

carbon monoxide monitoring and the physical safety of guests. These potential issues

could land Airbnb in hot legal water if one of its guests gets physically harmed during a

stay in a property that is hosted through their site. Airbnb has created a safety team to

help when things are so awry with such cases, but what and how they handle them is

quite secretive. (Carville, 2021)

Conclusion

To capitalize on the identified strengths of Airbnb we recommend that the

organizations focus sufficient resources on customer feedback, especially on their

respective vacation experiences. We also recommend that the organization continue to

facilitate a model of transparency for this feedback that is universally available to their

patrons. We believe that such an endeavor would close the deficiency identified for hosts

that do not respect the published “Host Reliability Standards”. Furthermore, we also

conclude that in order to fully negate the weaknesses identified above Airbnb needs to

take a more proactive role in vetting the listings published on their platform. We

identified two major opportunities that Airbnb could capitalize on which would further

empower their organization. The first is that Airbnb should invest in vertical integration

of the industry; specifically Airbnb should incorporate the ability to purchase car rentals,

airfare, and travel guides through their platform. The second opportunity would be the

untapped market that still exists in various countries such as India and China. This leads
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us to the threats identified by the analysis that various organizations in opposition to

Airbnb are pursuing for legal means to reduce the allowed time that hosts are permitted to

lease their properties to their guests. Airbnb recently withdrew from China for such

reasons. We recommend that Airbnb undertake and fund a robust legal team that can

cover the various legal systems the organization will be working with around the globe.

This action will allow Airbnb to further tap into the available markets around the world

and mitigate the major threats faced by the organization.

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References

Airbnb. (2022, May 2). About us. Airbnb Newsroom.

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

Airbnb statistics and host insights [2022]. Airbnb statistics and host insights [2022]- the

zebra. (2022, February 2). Retrieved June 2, 2022, from

https://www.thezebra.com/resources/home/airbnb-statistics.

Carville, O., Tartar, A., & Lin, J. C. F. (2020, February 14). Airbnb to America’s Big

Cities: See You in Court. Bloomberg.com. Retrieved from

https://www.bloomberg.com/graphics/2020-airbnb-ipo-challenges/.

Carville, O. (2021, June 15). Airbnb Is Spending Millions of Dollars to Make Nightmares

Go Away. Bloomberg.com. Retrieved from

https://www.bloomberg.com/news/features/2021-06-15/airbnb-spends-millions-ma

king-nightmares-at-live-anywhere-rentals-go-away.

CBS News. (2020, December 10). Airbnb, resilient in pandemics, goes public at $68 a

share. Retrieved from

https://www.cbsnews.com/news/airbnb-ipo-47-billion-valuation-68-share/.

Coulter, M. (2013). Strategic Management in Action (6th ed.). New York, NY: Pearson.

Gaille. B. (2021). Airbnb SWOT Analysis (2021): 30 Big Strengths and Weaknesses.

Retrieved from https://brandongaille.com/airbnb-swot-analysis/

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Host reliability standards - Airbnb help center. Airbnb. (2022). Retrieved from

https://www.airbnb.com/help/article/2895/host-reliability-standards.

Introducing the new. (2022). Airbnb. https://www.airbnb.com/2022-summer.

News Article | World Travel & Tourism Council (WTTC). (2022, February 2). World

Travel & Tourism Council. Retrieved from

https://wttc.org/News-Article/Travel-and-Tourism-could-grow-to-8-point-6-trillion-

USD-in-2022-say-WTTC.

Stutzman, M. (2022, January 6). 20+ of the best unique Airbnb stays to spice up your

next trip. Thrifty Traveler. Retrieved from

https://thriftytraveler.com/guides/unique-airbnb-homes/.

Wikipedia contributors. (2022, June 2). Airbnb. In Wikipedia, The Free Encyclopedia.

Retrieved 19:37, June 4, 2022, from

https://en.wikipedia.org/w/index.php?title=Airbnb&oldid=1091162667