REPORT

Strategies, Business Models and

Employed Digital technologies.
Lia TRIFAN
[Digital Business]
 Table of Contents
Introduction...................................................................................1
Strategy Analysis...........................................................................1
Business Model Analysis.................................................................1
Use of Digital Technologies Analysis...............................................2
Conclusion......................................................................................2
Introduction
Airbnb, the platform that lets hosts offer unique stays and experiences that make
it possible for guests to connect with communities in a more authentic way.

It was born in 2007 when Brian and Joe welcomed three guests to their San
Francisco home. It was just a simple idea from two friends who needed money
to pay their own rent. They put together three air mattresses and listed them up
for rent. And then, they realised that the idea could go much further than that
and has since grown to over 5 million hosts who have welcomed over 2
billion guest arrivals in almost every country across the globe. In 2009 Airbnb
expanded beyond rooms to offer apartments, whole homes, and vacation homes.
The mobile app which provides instant bookings was launched in 2011, and by
2012 the company expanded internationally, opening their official office in
Germany.

Now Airbnb has hit their milestone of 1 million Superhosts (highly appreciated,
verified users, listing their properties), which in the total of all years of activity
of Airbnb have earned more than $250billion. It is a fully digital platform,
which operates via app and website only, there is no face-to-face
service, there is no physical space where you need to go. (Newsroom,
2024 )

Strategy Analysis
Airbnb’s founders were aiming for worldwide recognition after understanding
that local success is completely different. Confidently knowing these details,
Airbnb has opted for developing a global strategy that is essential and
necessary, not optional.

Their main key focus has been aimed at building genuine community
connections.
Cultivating a Global Family - Airbnb focused on their users and put them
first, building their platform around the people using it, encouraging
intercultural experiences and fostering long lasting bonds. This attracts diverse
people, giving them a chance to experience a way different travel journey than
one in a hotel.
Marketing for Trust - Setting a safe space, earning trust and credibility from
users is crucial, and that is exactly how Airbnb acted through their marketing
tactics. For example, the UGC which included pictures and videos taken by
actual travelers.
Feeling accepted away from home – A tourist craves connection and a full
human experience. That is exactly why Airbnb created itself as a collective
where users can interact, exchange recommendations and share experiences,
making any place of the world feel closer to a foreigner’s heart.
Although community is important, tending to each culture’s needs and
differences is also a main strategic point. This is where the Localization aspect
comes in. Automatic translation has been a gamechanger for Airbnb, as it
ensured way easier communication between host and traveler.
Currency conversion, which you can customize easily to your liking on the
platform as well has taken complicated and tedious calculations out of the
picture.
Lastly, Airbnb attentively selects listings from the users’ regional preferences,
giving them Culturally relevant experiences. This ensuring that you get a
culturally aligned engagement with the platform itself. (Newsroom, 2024 )

Business Model Analysis

Connecting both owners, which list their property, and guests, which book their
stay, Airbnb’s business model stands as a two-sided marketplace or a multisided
platform. Starting with the Customer Segmentation, it is clearly obvious that
included are the hosts and guests. The hosts being the people that have
properties available for rent or sharing and want to make money from that, and
the guests being the people that need a place to stay, which will be found by
searching exact locations, type of property, date needed and price range.

Value Propositions are specifically different for each segment. For example, a
hosts most important value is making money through their property while still
being in control over the bookings and feeling safe and supported in any
inconvenient situation by the platform they use. As for the guest a primordial
value would be to save money and the convenience of finding a suitable place
according to all personal needs and possibilities. Both customers can contact
and view each other before the booking is finalized for clarifying any questions
or concerns.

To reach their customers Airbnb had to implement different Channels to start

interacting. Most important one is the web and smartphone app, where all the
actions are being made to list or book a place. Social media comes next,
including also the digital and affiliate marketing. Lastly the most traditional way
to get to your customers, word of mouth.

Customer relationships should be built healthily, through stable and trustful

tactics, which Airbnb has done through secure transactions, strong
communication between segments, protection of data and private information,
24/7 customer service, user-friendly platform, and personal recommendations.
Airbnb charges a service fee from both the guest and the property owner for
each booking, which concludes their Revenue Streams. The fee ranges from
3% to 14.2% for owners and 0% to 20% for guests, depending on the booking
price, location, and other factors. In addition to the service fee, Airbnb also
offers additional services, such as cleaning and photography, which are optional
to purchase. These services are designed to help owners optimise their listings
and attract more bookings. (Pereira, 2024)

The Key Resources that the platform has mainly come from their application,
listings, reviews, feedbacks, and algorithms.

As for the Key Activities, the main success comes from development and
maintenance of the system, effective sales, attractive marketing, safe policies
and data protection, an easily accessible customer service where any issue can
be resolved fast.

Airbnb’s Key Partners are again obvious, as we have discussed them before.
The hosts, which can be private owners of a specific real estate piece,
photographers that take pictures of he spaces, insurance companies to assure the
hosts in unpleasant situations with guests and lastly, investors.

All the key activities and channels must be committed to. That is when the Cost
Structure comes in, and it includes investments, such as resources,
maintenance, marketing, salaries, insurance, credit card fees and legal
administrative costs.

As any other company, Airbnb also has Competitors, like Vrbo - which is a
fairly old company in this industry, activating since 1995, having a rough
estimate of 16 million users to book per month. Booking.com – a very large
travel agency with multiple features, listing more than 6 million
accommodations which don’t only include homes and apartments but hotels as
well. Other similar platforms are HomeToGo, Google, Holidu, Tripadvisor,
Expedia, Trip.com, TUI Villas, misterb&b, Plum Guide, Glamping Hub, etc.
(Pereira, 2024)

Use of Digital Technologies Analysis

Riley Newman, former head of data science at Airbnb, explained that the
company looks at data as the voice of the customer, and data science as the
interpretation of that voice.

He also stated “We decided to let our community solve the problem for us.
Using a rich dataset comprised of guest and host interactions, we build a model
that estimated a conditional probability of booking in a location, given where
the person searched. A search for ‘San Francisco’ would thus skew toward
neighbourhoods where people who also search for San Francisco typically
wind up booking, for example the Mission District or Lower Haight.”
(WALLIS, 2023)

Airbnb uses an essential component to their application, called Machine

Learning, which powers the search and recommendation engines, to understand
user preferences and offer recommendations or detect fraudulent behaviours by
conducting background checks and in-depth analysis of personality traits, going
so in depth it can recognize openness, narcissism and even psychopathy.

It also optimises pricing for the hosts, by analysing the market trends and
demands through AI. this exact technology being called “Smart Pricing”.

AI is also used for factor analysis, such as places and hosts that the guests have
viewed and are interested in, to give a well-executed predictive search.
(Patel, 2024)

Conclusion
With over 5 million hosts and 2 billion guests arriving in their properties, we
can conclude that Airbnb truly is a strong, trustworthy, and successful company.
The remarkable growth generated by their carefully curated global strategy has
gotten them to worldwide recognition. The innovative business model provides
value and shows how advanced the company is and how it is still willing to
work towards newer goals and updates for their users to have an enhanced
experience. Because Airbnb continuously adapts to market trends and demands,
prioritizes authentic interactions and the satisfaction of their customers, they
remain one of the leading companies in the hospitality industry. Exquisite
places, unique journeys and meaningful connections are what make this
company so outstanding.
 References:
(Newsroom, 2024 ) https://news.airbnb.com/about-us/

(accelingo, 2024) https://www.accelingo.com/airbnbs-global-strategy/

(Kruger, 2024) https://www.igms.com/airbnb-business-model/

(Pereira, 2024) https://businessmodelanalyst.com/airbnb-business-model/?

srsltid=AfmBOoo48qYY6xfrDX-Xqx4A8XsC7jdwlFNw-
AJPpFsGWlO6q7H2ZiqE#Airbnbs_Business_Model_Canvas

(Tiernan, 2023) https://www.bdo.com/insights/digital/airbnb-artificial-

intelligence-transform-business

(WALLIS, 2023) https://intuji.com/airbnb-tech-stack-explained-airbnb-app/

(Patel, 2024) https://neilpatel.com/blog/how-airbnb-uses-data-science/