Ethics and Strategy for Airbnb Success
In the accommodations market, Airbnb appears to have a significant advantage over its competitors as it relates to regulations affecting the operations of its business. Case 2: Airbnb in 2018
Develop a business strategy that will allow Airbnb to meet local, state, and international regulatory requirements and motivate individuals to benefit from participating in this space of the accommodations market. Address the following questions:
- How can Airbnb ensure the ethical treatment of consumers?
- Should there be a separate strategy for the international component of their business model?
tho75109_case02_C6-C10.indd!C-6 12/18/18 09:23 PM
John E. Gamble Texas A&M University–Corpus Christian
Ethics and Strategy for Airbnb Success
Airbnb was founded in 2008 when Brian Chesky and a friend decided to rent their apartment to guests for a local convention. To accommo- date the guests, they used air mattresses and referred to it as the “Air Bed & Breakfast.” It was that week- end when the idea—and the potential viability—of a peer-to-peer room-sharing business model was born. By 2018, Airbnb had seen immense growth and suc- cess in its 10-year existence. The room-sharing com- pany had expanded to over 190 countries with more than 4 million listed properties, and had an estimated valuation of $31 billion. Airbnb seemed poised to revolutionize the hotel and tourism industry through its business model that allowed hosts to offer spare rooms or entire homes to potential guests, in a peer- reviewed digital marketplace. Case 2: Airbnb in 2018
Airbnb’s success leveraged the sharing economy.
But with growth came resistance.
City officials and hotel owners complained.
Traditional establishments faced regulations and taxes.
Airbnb hosts avoided these liabilities.
They operated in a digital marketplace.
Some hosts faced legal issues.
City and state ordinances affected them.
Stories emerged of guests refusing to leave.
Hosts had to evict guests deemed leasees.