Airbnb Strategy Study

2225 words 9 pages
Airbnb vs. Premier Inn: the rise of “collaborative disruption”
Peer-to-peer consumption is on the rise. Many companies are now leveraging the phenomenon of “decreased barriers to interaction” brought about by internet and social networks to help their users rent each other’s houses, cars, parking space, cooking skills and much more. Airbnb allows users to rent out their idle living space (couch, room or their entire house) to generate extra revenue. By providing people seeking accommodation with an alternative to hotels, Airbnb’s platform also directly competes for a chunk of the hotel hospitality business. In this essay, we will argue that Airbnb will continue being a successful business, possibly at the expense of incumbents focused on
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10 million bookings have since been made, with five million made in the past 9 months alone7. This explosive growth is also coupled with healthy profits: Airbnb takes a 10 to 13% commission on nights that average the $70 price tag, making it a very attractive company for investors: Peter Thiel8 is said to have been the last one to invest in a deal that values the company at around 2.5 billion dollars9. The current excitement generated by the company also seems valid in the light of strategy literature. I will indeed make the case that Airbnb is a textbook case of a disruptive company that will become extremely successful should it find a strategy to fend off the intensifying competition.

My first argument for Airbnb’s present and future success is how the company positioned itself to leverage macro-economic and technological trends to its advantage, something that usually sets the ground for disruption by the company. Giving people an opportunity to generate extra income