AirBnb Case Study

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Airbnb: Protecting their customers Case Analysis Executive Summary This case presents the business analysis of Airbnb. Airbnb is an online marketplace where home owners and would-be bed-and-breakfast owners can turn vacant rooms into nightly rentals, transforming any house into a possible hotel. With the online interfacing, potential guests can log on and search for available rooms. Airbnb was founded in 2007 and quickly grew to a $1 billion company by July 2011. The company created an online reservation system that included a reputation system to build trust and reliability between hosts and guests. The main issue in Airbnb’s company came with their online reputation system. This allowed for both hosts and guests to view reviews…show more content…
This would provide hosts additional information to weigh when deciding whether to accept or reject a renter. However this brings up privacy and security issues. The company would have to implement policies for protecting the privacy of their users. 3. Make It Easier to Reject Renters: When a renter sends a request to a host to use their home, the host has 24 hours to either accept or deny their request. If the host either denies their request or does not respond within the 24 hour window, the lower the host will appear in the search results. This was meant to encourage hosts to only post rooms that they were serious about renting but in turn penalized cautious hosts for declining a request when they may have felt uncomfortable. Making it easier for a host to reject a renter would better protect the host. 4. Vary Prices Based on Ratings: Airbnb had always used a flat rate for all guests staying in a specific host’s room, but could potentially charge more or less based on the renters rating and reviews. For example a poorly reviewed and ‘riskier’ renter would be charged more than a well reviewed and ‘safier’ renter. This would give hosts an incentive to accept more renters but adds in a safety risk. 5. Provide Insurance for Hosts: Airbnb could provide a variation on renters insurance that would cover damages or incidents caused by unreliable hosts or reckless guests. They could model this insurance policy off of eBay’s insurance policy. This option would

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