De La Salle-College of Saint Benilde

School of Management and Information Technology

Information Systems

AirBnB
Case Project

Submitted in Partial Fulfillment of the Course Requirements

In BUSEVAL

Submitted to:
Asst. prof. Angel Martin S. Manalansanan

Submitted By:
De Guzman, Vivien Franchesca
Manuel, Jake Anthony
Senados, Janiko Matthew
Sequitin, Jericho Luis
Wu, Darren Justin

July 5, 2022
 Table of Contents
I. Executive Summary...............................................................................................................4
II. Problem Definition................................................................................................................4
III. ITIL Service Value System (SVS).....................................................................................5
A. Organization and people........................................................................................................5
B. Information and technology...................................................................................................7
C. Partners and suppliers...........................................................................................................8
D. Value Streams and processes..............................................................................................8
E. External Factors (PESTLE)...................................................................................................9
a. P = POLITICAL........................................................................................................................9
b. E = ECONOMIC......................................................................................................................9
c. S = SOCIAL..............................................................................................................................10
d. T = TECHNOLOGICAL..........................................................................................................10
e. L = LEGAL................................................................................................................................11
f. E = ENVIRONMENT................................................................................................................11
IV. Service Management .........................................................................................................11
a. Value and value co-creation..................................................................................................12
b. Organizations, service providers, service consumers, and other stakeholders...........12
c. Products and Services..........................................................................................................12
d. Service Relationships.............................................................................................................12
e. Value: outcomes, cost, and risks..........................................................................................12
V. ITIL Service Value Chain for each Problem Defined....................................................13
a.Plan............................................................................................................................................13
b.Improve...................................................................................................................................13
c. Engage....................................................................................................................................14
d. Design and Transition...........................................................................................................14
e. Obtain/build............................................................................................................................14
f. Deliver and support................................................................................................................14
g.Continual Improvement........................................................................................................15
VI.Integration ITIL Management Practices as a Solution...............................................15
a. General Management Practices.........................................................................................15
b. Service Management Practices..........................................................................................16
c. Technical Management Practices….................................................................................18
VII. Summary of Recommendations..................................................................................19
VIII.Timeline.............................................................................................................................19
IX. References (APA 6th Edition)..........................................................................................20
Executive Summary:
Airbnb connects people who want to rent out their homes with those looking for places to stay in
specific cities. Both guests and locals benefit from the passions and interests of Airbnb
experience hosts. The company faces current challenges such as Coronavirus concerns where it
needs to convince its customers that the rentals are safe. The corporation must rebuild trust with
the people because of a shooting incident in an Airbnb house. In addition, it also allowed for fake
listings, which resulted in guests losing their money. The hosts and guests experience problems
with the refund system of Airbnb. The hosts complained that the company did not do enough to
reimburse them for the lost income, while some Airbnb guests said the refund process was
difficult. Furthermore, there are more challenges for Airbnb, such as offering no rewards to
users, lack of personal information of guests, the host having a penalty in rejecting guest's
requests, the company has only a single price for a given room, Airbnb should have insurance,
does not offer discounts, and does not have screening process.

Problem Definition
This Coronavirus pandemic has shown significant effects on businesses, especially those in the
hospitality industry, and Airbnb is one of them. Airbnb, being an online marketplace for lodging,
has its fair share of problems that have been brought out regarding its system. These problems
have resulted in a drop in customer satisfaction, safety concerns, and a drop in users. The
underlying issues that are still prevalent to this day are:

● Fraud Listings or Scams

● Reservation Cancelling System
● Late notice cancellations
● Refund System
ITL Service Value System(SVS)

Organization and People

The organizational structure of Airbnb is a holacracy model; to move swiftly and iterate
fast while maintaining a flexible and lean approach. In addition, Airbnb switched to a hybrid
model where employees can work remotely and gather every quarter to make plans and interact
with each other. The organizational structure of Airbnb can be seen in Table 1.

Table 1. Airbnb Organizational Structure

These are the departments:

● Human Resources department - finding, hiring, training job applicants, and screening are
the responsibilities of human resources.

● Finance department - in charge of procuring and managing all financial resources.

● Marketing department - understanding the market and competitors, establishing the
company's market positioning, pricing, and services, promoting the company to the target
audience, and outlining how they might profit from collaborating with you are all steps in
the marketing process.

● Operations department - focuses on the production process conducted from beginning to

end.

● Customer Experience department (CS specialists) - offers exceptional services to both

new and potential clients. In addition, to improve customer services and brand awareness,
they pinpoint consumer demands, reply to customer inquiries, and work with internal
departments.

● Trust & Safety department - the collection of business processes by which an online
platform decreases the danger that users will be exposed to harm, fraud, or other activities
that violate community norms.

● Data science department - The process of creating, cleaning, and organizing datasets to
evaluate and extract significance is known as data science.

● IT department - focuses on three major areas, which are the governance of the company's
technological systems, infrastructure maintenance, and overall system functionality.

● Engineering department - Engineering departments are in charge of creating creative

technologies to introduce advanced materials into the world, as well as planning,
introducing, maintaining, and enhancing plants for stable and efficient production.

● The design department - is in charge of the company's various creative design projects.

● Legal department - its role is to provide the business, its divisions, and its workers with
legal services and guidance.
Information Technology

Airbnb uses AI to decrease the friction that comes with our platform – from improving search to
combating fraud to assisting hosts with pricing optimization. In 2013, Airbnb started developing
machine learning models to improve our search and discovery capabilities. Airbnb uses the
following technologies:
1. Programming Language - Ruby and Javascript
2. Framework - Rails is a Ruby on Rails framework. The RoR framework is well-known for
its incredible abilities to accelerate development and, as a result, lower expenses and
TTM (time to market).
3. JavaScript Framework - React. React, a JavaScript UI toolkit, is a versatile and efficient
way to create slick user interfaces.
4. Web Server - Nginx. Nginx is a robust HTTP and proxy server that ensures Airbnb's
security and scalability while also speeding up content delivery. Nginx is used by internet
industry titans such as Instagram, Netflix, and Zappos, in addition to Airbnb.
5. Key-Value Storage - Redis. Redis is a key-value database with a scalable caching system.
6. Cloud Storage - Amazon S3, EBS: Amazon uses Amazon services to store user data,
including millions of photographs.
7. Cloud Hosting - EC2 from Amazon. Amazon EC2 is a useful tool for distributing
incoming traffic and preventing Airbnb's system from going down during unexpected
traffic spikes or swings.
8. Cloud Database - Amazon RDS is a cloud relational database that Amazon uses to store
its data. Amazon used MySQL databases before switching to Amazon RDS to make
administration and other everyday operations easier.
9. Big Data Tools - Airpal, Druid, and Presto. Airbnb has a large amount of user data,
therefore they employ a variety of tools to store, analyze, analyze, and manage it.
Partners and Suppliers

Tenant
● Adds photographs, adjusts rates, sets availability, and welcomes guests to
his listing on a daily basis.
Agency
● Places the listing on Airbnb and handles all necessary administrative
procedures.

Value Streams and Processes

Airbnb has more than seven million listings in more than 200 countries.The site has more than
150 million users, with an average of six renters checking into an Airbnb-listed property every
second.

The primary source of Airbnb’s revenue comes from service fees from bookings charged to both
guests and hosts. Depending on the size of the reservation, guests are required to pay a
nonrefundable service fee based on the type of listing—usually under 14.2%. A more expensive
reservation results in lower service fees for guests because families or groups with larger
reservations can save money for other travel expenses.

Hosts are also charged a 3% fee with every completed booking to cover the processing of guest
payments. This fee may be higher for Airbnb Plus listings. When a reservation is booked, guests
pay the service fee—unless the host cancels or retracts the listing. If the reservation is altered,
Airbnb adjusts service fees to accommodate users.
External Factors(PESTLE)
Political
● People use Airbnb to rent out their houses, apartments, or rooms to
strangers. However, the company has ran into legal problems. Some rental
properties may not adhere to state housing rules and regulations. To
legally rent out apartments for short periods of time in several states, the
owner must also own the property. Furthermore, while renting out their
residences during the holidays, these locations are required to pay hotel or
tourist taxes. Airbnb has already been sued in Florida, Barcelona, New
York, Toronto, and San Francisco, among other cities, for failing to
observe local housing rules and regulations. Airbnb must comply with all
applicable state housing regulations or risk facing more legal action in the
future.

Economic
● Airbnb is a great example of a shared economy and collaborative
consumption, in which people share their resources with others in need for
 a limited time. It's a growing trend in which organizations and people
share resources.
● Airbnb has emerged to become a big rival to hotels and motels by
providing cheaper choices for rental. This is why it has developed a loyal
consumer base throughout the world, which continues to expand to this
day.

Social
● Airbnb is known for seamlessly blending cultures, groups, and societies.
Hosts and guests are encouraged to share their experiences and stories on
Airbnb's website and on different social media platforms. Airbnb is a
platform that shares cultures and societies from all over the world and is
operating in 191 countries. In addtion, social media played a significant
role in the company's growth.

Technological
● In the case of technological issues, one of the external elements that has an
impact on the firm is the cost of production. The corporation should be
aware of the economy's level of automation. Another external influence in
the business is technological improvements, which are related to
automation. Airbnb must be able to adapt in order to remain competitive
in a market that is constantly changing. As technology advances, so does a
society's technological acceptance and digital literacy. Airbnb needs to
know how well each community accepts technology because this might
give them valuable insight into their potential target market. Employees
must also be familiar with the company's machines and technologies in
order to complete particular tasks and processes.
 Legal
● As mentioned in other factors, Airbnb operates in more than 191
countries. Each province, state, and country has its own set of housing
laws and Tax Rules. It is quite challenging for Airbnb to comply with
every country's requirements. Hosts must agree to Airbnb's terms and
conditions, which include committing to respect taxation, housing, and
tourist legislation. The good thing is Airbnb emphasizes the importance
for hosts to observe these regulations on their website.

Environmental

● As opposed to hotels, Airbnb claims to use less energy globally.

Environmental factors such as Lowering greenhouse gas emissions, using
less water, avoiding waste, and raising environmental awareness are some
examples of this.

Service Management
a. Value and Value Co-creation

Value is important to Airbnb mainly because this is the reason why customers opt to use
Airbnb services. The reason why travellers specifically choose Airbnb instead of hotel
accommodations is that Airbnb offers a lower price. This is the reason why over the
years, Airbnb has become an enemy of other hoteliers from all over the world. With
Value co-creation, this is done by having the company and the customers collaborate on
making the service better. In the case of Airbnb, they keep in mind customer feedback
and complaints within the application in order to make their service better.

b. Organizations, service providers, service consumers, and other

stakeholders
 Airbnb is aiming to improve their service where they are focused on
creating an end-to-end travel platform that will handle every part of the
user’s travel experience. The company is structured in different departments.
Notable ones are: Engineering, Data Science and Analytics, Finance and
Accounting, Administrative, Business Development, Community, Customer
Experience, Design, Information Technology.

Airbnb's community is made up of Guests, Hosts, Communities,

Shareholders, and Employees. Making a business that takes into account the
needs of all stakeholders is the design problem.

c. Products and Services

Airbnb’s products and services revolve around making a platform for people to offer their
primary residences as hotels to tourists. According to a study, Airbnb offers
accommodations in more than 100,000 cities and 191 countries, making their service
widely accessible.

d. Service Relationships

Airbnb has multiple offices around the world, locations such as Los Angeles, New
York City, Berlin, Paris and their main campus which is in San Francisco. Having a
global footprint will be crucial for the company's continued success as it has listings in
more than 100,000 locations and 220 nations and territories.

e. Value: outcomes, cost, and risks

The Airbnb platform differs from traditional accommodation units in terms of facilities,
customer service, website design, and booking systems. The lodging model specific for
Airbnb favours a closer social interaction between residents and tourists to create a sense
of place as a competitive advantage compared with conventional lodging proprietaries In
addition, the literature suggests that this social appeal of peer-to-peer accommodation
contributes to several outcomes like a longer length of stay, higher frequency of travel,
and a bigger range of activities

Financial Risks

● Probability of losing money due to currency fluctuations.

● Concerns involved in online transactions​.
● Hosts can be subjected to pay a fine if unaware of the laws/regulations of the
cities in which they are located.​
● Hosts have to bear damages in case any during the stay of the guest.​
 ● Airbnb, which is known for its short-term lodging platform, now offers to
facilitate events and activities (“Experiences”). However, potential risks need to
be fully vetted and considered.​
● Municipal Tax.

Operational Risks

● Possibility of mismatching facilities provided by the host with guest’s

expectations.​
● The host might cancel the booking at the last moment leading to reputation loss.​
● Gender factor, ethnicity, etc. of certain locations. E.g., Hosts might not be
comfortable with two males or females staying in their house, Tourist Pollution as
reported by residents in Japan, etc.​
● Background check is also a big risk consideration when it comes to staying at a
residential property.​
● Possibility of damage to the property. ​
● Liability risk because most homeowner’s and renter’s insurance policies do not
cover regular commercial activity in the home​.

V. ITIL Service Value Chain for each Problem Defined

a. Plan

I. Take into account software's unreliability and recruit a fresh developer

who might enhance the software.
II. Hold a meeting with all the important stakeholders in attendance so that all
essential groups may discuss what the next step is.
III. Consider current issues in the development of the new system to help
prevent future occurrences of the same issues.
IV. To reduce errors, gather and transfer all relevant data to a new system.
Consider the disconnected system to be "losses" to make switching to a
new system easy.
V. Employee training could be undertaken to solve the issue of ignorance
about their information system.

b. Improve
I. Choose the appropriate course of action for the business and its
stakeholders. To strengthen relationships, let the stakeholders know that
the organization appreciates them.
 II. Determine and prepare the resources that will be required to carry out the
aforementioned plan.
III. To ensure that they are prepared in case this ever occurs again in the
future, make sure that the new system can manage more than what is
necessary. They might also seek out a system that is more adaptable.
IV. Improve dissemination of accurate information on their new system.

c. Engage

I. A topic that is precise to prevent time from being wasted, as well as a time
and location for the meeting that is advantageous to all participants.
II. To ensure a better performing system, determine what the new system
needs and get the advice of experts in the field.
III. To ensure that all inputs are taken into account during development,
permit current high-level staff and contracted developers to oversee the
creation of the software.
IV. To efficiently begin the process of developing a centralized system, the
hired developer should be informed about and linked with the necessary
individuals.
V. Obtain a capable person who can oversee the production and provide the
necessary training

d. Design and Transition

I. A plan for the company's future with clear objectives.
II. Company agreements and requirements for the needed system.
III. A roadmap detailing the progression of development and the number of
resources needed.
IV. A clear understanding of the steps for the centralized system.
V. Agreements between the company and the chosen professional developer.

e. Obtain/build
I. Obtain a meeting location that will accommodate all attendees.
II. Obtain resources and labor for shifting to the needed system.
III. An illustration of the desired system design and how it would help the
business
IV. An illustration of the anticipated new system's essential features and future
extensions.
V. Contracts outlining the scope of the users' access and degree of control
over the system.

f. Deliver and support

I. Product and service changes should be made to fulfill the needs of
shareholders.
II. A service that provides assistance to both customers and businesses.
 g. Continual Improvement

I. Information and knowledge about service components are used to make

additional improvements.
II. Feedback from stakeholders to help with progress.
III. Service performance needs work.

VI. Integration ITIL Management Practices as a Solution

a. General Management Practices

Several management practices are implemented by Airbnb to

maintain their growth in the hospitality industry. The
practices that they have administered are as follows:

● Continual Improvement
○ Airbnb should take customer feedback seriously
and aim to mitigate several problems experienced
by the users throughout airbnb’s success. Airbnb
should also constantly add new features and
expand its availability to more places.

● Information Security Management

○ Risks that endanger Airbnb’s data security and
privacy are found and managed by the
information security team. The business
infrastructure, production infrastructure, and the
products that are developed at Airbnb are all
included in the scope. Their objective is to lower
the risk of a data breach and make sure Airbnb
complies with all applicable regulations

● Knowledge Management
○ Airbnb must research into different ways to
further expand their business. This includes
researching potential business rivals and
expanding their knowledge into other countries in
order to expand their services.

● Strategy Management
○ Airbnb should look towards the future and
 identify what steps they should possibly take in
order to maintain the status quo and improve their
system

● Portfolio Management
○ Airbnb must look back to their previous sales
figures and compare it to the current one. They
should use forecasting techniques to predict their
future sales.

● Relationship Management
○ Airbnb should maintain a good relationship with
their stakeholders which are the people who are
listing their properties in Airbnb. Airbnb should
ensure that the service is seamless on the property
owner’s and also to the consumer’s end.

● Risk Management
○ Airbnb must foresee potential risks to the
companies’ success. Things such as competitors,
business decisions and service flaws must be
controlled.

● Service Financial Management

○ Airbnb should know its responsibilities when it
comes to managing their financial resources. The
company should be able to allocate manpower in
budgeting and accounting and also allocate these
resources to other fields to improve the business.

b. Service Management Practices

Airbnb should make sure that their services are up to the highest standards.
Airbnb should make it a must to exceed their customer’s expectations.

● Availability Management

○ Airbnb should make sure that they have enough listings to accommodate
for the large demand. As year by year, Airbnb becomes more popular it is
a must for them to lodge more customers.

● Business Analysis
○ Airbnb must be able to analyze their business. As Airbnb is a unique
 concept it is a must for the company to research more on the hospitality
industry and apply it to their system.

● Capacity & Performance Management

○ With Airbnb being widely accessible across the globe, it is important for
them to maintain their quality of service by mitigating customer feedback
and complaints.

● Change Enablement
○ Airbnb must be ready and have the resources to suddenly change. One
example of this is the Coronavirus pandemic. Airbnb must have the proper
resources to get through whatever change there is to the industry.

● Incident Management
○ Airbnb made sure to have policies in line with their service. This is to
make sure to reduce any negative occurrence to the company’s image
amidst unfortunate events.

● IT Asset Management
○ Airbnb made sure that their application is being constantly updated.
Airbnb’s software updates mainly consist of new features and fixes which
the company needs to make sure to continuously release to offer a
seamless experience for the customer.

● Problem Management
○ Airbnb is subject to multiple problems in its service whether it’s on the
customer or the company’s end. The company must be able to have the
capacity to manage it.

● Release Management
○ Airbnb should allocate the proper resources to research development in
order to think of new ways to improve their system.

● Service Catalogue Management

○ Airbnb should make sure that their customer service is constantly updated.
This will help Airbnb to give their customers the knowledge they need to
use the service.
● Service Continuity Management
○ In the event of any problem, the company must be able to continue their
service and make sure to maintain the quality of service that they have.

● Service Desk
○ A service desk is important because it gathers and preserves information
 about problems and performance outcomes to make analysis easier and
support better IT decisions.

● Service Level Management

○ The company should make sure that the goals that are established are
specific and measurable. It should also improve customer satisfaction
levels by keeping an eye on them. And it should also maintain a healthy
relationship with the customers.

● Service Request Management

○ Service requests aid businesses by making it easier to provide services that
are utilized internally.

● Service Validation & Testing

○ Airbnb must make sure that their software system meets the requirements
of their service and also the customers needs.

c. Technical Management Practices

With the improvement of the internet and companies implementing new

Technology and new features in their websites I think Airbnb should try
and improve as well.

● Deployment Management
○ The application and the website for airbnb should be accessible and be
user friendly and also should have improvements or beta tests for
experienced users

● Infrastructure & platform management

○ The features that airbnb are using is outdated we can see other booking
sites on hotels having improvements airbnb should look out for
improvements and look for technological solutions available in the
organizations

● Software development & management

○ The airbnb application and website needs to keep improving on their
website to be functional in times of internet and server trouble, it should
be reliable and user friendly
VII. Summary of Recommendations
- In summary, when it comes to clients booking apartments, Airbnb has to be more strict.
To address safety issues, both clients and hosts must be verified and subjected to a
screening system in order to reduce the number of fraudulent listings and scams.
Moreover, Airbnb's system should include a feature that prevents bookings from being
canceled when reservations are less than a certain number of days away. Furthermore, a
reward system benefits not just consumers but also Airbnb. Implementing a reward
system in which customers gain points for each successful booking would encourage
more people to use Airbnb since they will be able to obtain unique rewards. Most
importantly, Airbnb must address the issue of taxation and housing laws in certain
countries and states, which pose a considerable danger to the company because they may
be forced to shut down operations if they do not follow the regulations.

VIII. Timeline (Use Gantt Chart)

IX. References (APA 6 th Edition)

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● ‌