A Comprehensive Airbnb SWOT Analysis
Question
Task: Provide a comprehensive SWOT analysis on Airbnb
Answer
Airbnb Inc. is an American company founded in 2008 in California, USA. The firm serves as an online marketplace to book vacation homes on a rental basis. There a wide range of properties available on the website, including lodgings, homestays, studio apartments, hotels, luxury resorts, etc. that provide a premium experience to people. It can be seen through the Airbnb swot analysis that the company has made it easier for travellers to find affordable accommodations that are easy to find and fits their needs. Currently, Airbnb is operating in many countries around the globe, providing rental accommodation and fun activities in more than 34000 cities and 220 countries (Airbnb, n.d). The platform also provides an opportunity for homeowners to list their property on the website and find clients more easily. The company is a world leader in online hotels and accommodation business, with competition from major companies such as TripAdvisor, Bookings.com, Trivago, Vrbo etc. The assignment provides an in-depth review of the company through a detailed Airbnb SWOT analysis.
Strengths
There are numerous strengths which Airbnb possesses, that can help them in reaching great heights in the future. Airbnb has a great number of established accommodation units that are recognized by the visitors as Airbnb properties. It gives Airbnb an advantage over its competitors. Airbnb has managed to provide exceptional services to customers, which is why they have brand loyalty from their customers. The popularity among customers has enabled them to gain investor trust, and have a stable financial backing for conducting future business expansions without any constraints. Another strength highlighted in this Airbnb SWOT analysis is that the company generates greater revenue as it operates in all around the globe and has a greater profit (Semmelhack, 2013). The company has an incomparable sales and distribution system, which attracts a greater number of clients and increases sales.
Weakness
The following are weakness highlighted in the company’s business operations, as per this Airbnb SWOT analysis. The company has set up small units that are operating in international locations. Though they are functional in countries with lower economies, they can prove to be constructive and reduce profits in countries with more economic stability (Hahn, 2015). The investors and organizations which lend resources to Airbnb, do so at a great interest rate which increases the debt levels of the company. It can affect the cost to profit ratio greatly in the coming future as the global economic status changes due to COVID-19 pandemic. Another possible weakness for the company, in this Airbnb SWOT analysis, is the tax structure followed by the company in the USA. Airbnb has neglected the role and significance of research and development in the past and fails to invest in their R&D department. It can cause hindrance in adopting new innovative solutions to enhance business operations and consumer experience. It can also become a major weakness due to the changing hotel scenario in light of the COVID-19 pandemic.
Opportunities
There are various opportunities that are present for Airbnb as per the Airbnb SWOT analysis, which can help the company to improve its consumer experience and increase their profits. The travel community is expanding at a rapid rate since the last 3 years, and this creates a great opportunity for Airbnb to increase their sales (Schatford, n.d). The accommodation and hotel services around the world are expecting a sudden rise after the pandemic regulations get lifted. The company should put special focus on hosting corporate events, parties, and holiday vacations as hosting group activities will become a challenge for people, and Airbnb can take advantage of this scenario. The international housing and property market is experiencing a major hike in the sale of the property; this opens up the opportunity to gather better properties for accommodation for Airbnb clients. These opportunities, as per the Airbnb SWOT analysis, shall offer a decent chance for the company to host events and specialized activities at their properties, this gives them a competitive edge. It can also increase their revenue and solve their debt issues which can improve Airbnb’s business operation methods. (Setili, 2014).
Threats
A few threats are identified in this Airbnb SWOT analysis, which the company should focus on to avoid a negative impact. The industry is experiencing a rise in new firms and small companies. The emergence of the competition will lead to great competition and will affect the market scenario among the existing major payers. In addition to losing market share, the company is at risk of losing their profit margins due to competition which they cannot afford due to high-interest debt. As the competition increases, they will also face a price battle as every company will try to capture the market and gain more clients (Krotoski, 2014). The prices may go down, and hence the profit margins will be decreased, thus cost to profit ratio of the company will be greatly affected. The share price of Airbnb is also experiencing a drop; this can affect investor loyalty and financial backing for the company. The labour costs have increased worldwide due to the COVID-19 pandemic. The company is experiencing an all-time great loss in the number of clients due to travel restrictions due to the pandemic.
Conclusion
Airbnb is one of the world’s leading platforms that provide premium as well as budget accommodation to people around the globe. The Airbnb SWOT analysis has identified some important factors in all aspects, which include the strength, weakness, opportunity, and threats faced by the company. The major strengths of the company are its financial backing from investors and consumer loyalty. The company has set up experienced and proved channels for increased sales and distribution. Airbnb faces a weakness of having high-interest rates which can lead to great debt in the future, in addition to the changing marketing scenario due to the COVID- 19 pandemic; the company might experience a downfall in its profit margins and revenues. The market is expanding as discussed in the above Airbnb SWOT analysis; however, with travel restrictions and the emergence of new competition, the accommodation industry has become quite unstable. The company needs to focus on Research and Development to come up with new and innovative methods to attract more customers and ensure them that the properties are safe and sanitized.
References
Airbnb. (N.d). Air Bnb: About Us. Retrieved from https://www.airbnb.com/about/about-us
Hahn, J. (2015). Rapid Internationalization of Internet Companies: How Do Success Factors of "Born Globals" Apply to Internet Companies?. Norderstedt: TWENTYSIX.
Krotoski, A. (2014, October 13). Airbnb, the home-renting website, has been great for me, but I have misgivings. The Guardian. Retrieved from https://www.theguardian.com/technology/2014/oct/13/airbnb-ethos-property-rental
Schatford, S. (n.d). The AIRBNB Expert's Playbook: App that Automates Short Term Rental Management and Growth. Retrieved from www.rentingyourplace.com
Semmelhack, P. (2013). Social machines: How to develop connected products that change customers' lives. Hoboken, New Jersey: John Wiley & Sons, Inc.
Setili, A. (2014). The agility advantage: How to identify and act on opportunities in a fast-changing world. San Francisco: Jossey-Bass.
