How would you illustrate and compare the business models of Airbnb, large hotel chains such as

Marriot and Hilton, and bed & breakfast operators? Use the example chart in the textbook for
business models as a guide
The business model of Airbnb is entirely based off of their digital platform, and their
location ratings are personal accounts from previous guests. Airbnb also features
accommodations that can suit a group of any size, generally at a much lower cost
compared to hotels and bed & breakfast operators. Airbnb is 6% to 17% cheaper than
hotels in the top 25 markets in the United States.

They also add value by occasionally including tours or additional services. Comparatively,
the business model of large hotel chains is centered on having a universal appeal coupled
with name-recognition. Most hotel chains have been around for a long time and are quite
well-known. They also offer amenities such as onsite gyms, pools, and spas which
contribute to their higher price point.

Many hotel chains feature great views and onsite parking, adding to their appeal. An
additional aspect of their business model is utilization of commercial media advertising
which Airbnb and bed & breakfast operators usually do not produce. Lastly, the business
model of B&B’s is generally word-of-mouth advertising assisted by convenient locations in
high-traffic tourist areas. They focus on giving the home-away-from-home feeling that
draws in customers. Prices for bed & breakfasts can range to fit a variety of budgets and
expectations.

What are the general strengths and weaknesses of a) large, hotel chains such as Marriott and Hilton,
b) bed & breakfasts, and c) Airbnb? Explain how you would compare and contrast those businesses.
Large Hotel Chains

Large hotel chains have the strengths of brand recognition, expected complete service,
well-trained staff, and attractive amenities such as pools, spas, and gyms. On the other
hand, some weaknesses are that nicer hotels can be expensive and that the average
guest does not receive specialized treatment of any kind. The average guest also does not
have any brand loyalty and will generally choose the lowest price among competitors with
similar offerings.

B&B

Bed & breakfasts are strengthened by their locations as guests usually are surrounded by
tourist attractions. They also have a home-like feeling that appeals to specific guests. They
are generally small and their size makes them easier to manage than a large chain hotel.
The few workers appear more genuine and are more likely to provide guests with special
treatment. Some weaknesses are that B&B’s do not have high brand recognition and can
not afford all of the same amenities that large hotel chains can. Their specific appeal also
can minimize the pool of guests that would be interested in staying there.

Airbnb

Airbnbs are strengthened by the fact that they can be highly individualized to fit almost
anyone’s budget, location, and style. The website and app are also notoriously easy to use
and well-liked by most. However, some weaknesses of Airbnbs are that guests run the risk
of rooms not being up to regulation and there being no easy fix. A common fear for guests
is that the actual location will not match the pictures on the website, and they’ll be left with
no other options. Hosts are also liable for any financial issues and maintaining the correct
licenses.

To further compare and contrast these three types of lodging, it is noteworthy to mention that the
case states that they differentiate mainly by their amenities. Hotels invest a lot in amenities
compared to motels, and it is up to the host of an Airbnb as to what they offer. Hotels and motels
have larger facilities, accommodating guests in single or multiple rooms. Airbnbs offer spaces of
all different sizes. Motels might also be located closer to roadways compared to hotels which
provides guests with quicker and more convenient access to highways. Again, Airbnbs can go
both ways depending on the one that the user chooses. In the end, they all provide lodging, but
the experiences that a consumer receives at each type of space can differ by the previously
mentioned factors.

In what ways has the lodging consumer changed, and how does Airbnb’s customer value-proposition
meet this change?
Numerous tasks are being made easier by using a technology platform, and Airbnb is one
of those tech platforms that people can use easily. Before, people would just go to the
hotel that was in the easiest location. Now, on the other hand, people can research where
they want to go and learn about these places before they make a choice. Instead of
owning, more customers are preferring sharing or renting. Airbnb is attempting to appeal
to the new experiential-based economy who wants to be a part of a community by allowing
travelers and hosts to create a relationship.

This is enabled by the value-proposition of Airbnb, and they provide personal profiles of
the clients and hosts, which can also prove to be beneficial because there is a peer rating
system so others know if they are being truthful in their listings. Individuals are allowed to
list their space and make money, and the travelers are able to more freely choose private
spaces that are convenient for themselves. Airbnb’s ease of use has definitely paid off as
they see a 45% growth in bookings in the United States every year.

However, consumers have started to expect more amenities and services at a lower price
such as high-speed Wi-Fi, breakfast, in-room technology, entertainment options, and
fitness centers. Airbnb has a space where all these amenities can be listed, so customers
can choose the best fitting space for themselves. All in all, with the changing demand for
lodging, Airbnb includes listings of accommodations for long or short stays, countless
locations, and consists of spaces of different prices.

What key factors may determine the success or failure of Airbnb?

The key factors that dictate the successes of Airbnb include following regulations and
taxations. They avoid some liabilities due to being a digital platform but there are others
that they need to recognize and be aware of in order to stay out of trouble. On the
customer side of it, they may want to make sure that they continue to look at reviews of
hosts and travelers. Currently, they ban hosts if they do not disclose all the listings
information on the site or if they have extremely bad reviews. Another key factor that may
determine the success of Airbnb is their digital experience. In other words, they have to
make sure that they are continually improving their app and website for the best consumer
experience and listening to reviews on that as well.

Potential failures include a liability issue where they are sued, bad media coverage, or
technology issues. In regard to a liability issue, getting sued could cost a lot of money and
be a huge loss for Airbnb. Additionally, bad media coverage is probably one of the biggest
risks and potential failures for Airbnb. In the past week, popular YouTuber Shane Dawson
made a video with 8.1 million views that mentions a conspiracy theory that some Airbnbs
contain hidden cameras. While some hosts mention this in their listings, there are others
that do it illegally . This can be a big hit to Airbnb because this YouTuber has a massive
following, and this type of news reflects poorly on the whole business. Lastly, any major
issues with their website or app could be bad for their business, since it is an online based
platform.