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Airbnb

From creating new value to disrupting existing businesses, the rise of the sharing economy has had a major impact on the hospitality and transportation industries.  Built on the concept of exchanging goods via an online marketplace, the sharing economy allows individuals to seamlessly move between acting as buyers and sellers.  Emerging companies such as Uber and Airbnb have been winners in this sharing model, creating uncertainty for traditional incumbents such as taxis and hotels. 

Airbnb, an online and user-friendly platform that allows “hosts” to list their homes as a destination, was founded in 2008 with the intention of connecting people to unique travel experiences at any price point.  Within three years it had reached 1 million bookings.  This success hit a major hurdle in 2020 with the COVID-19 pandemic.  Once the pandemic hit, travel restrictions in many areas were put into place, and many consumers were wary of travel; this put a significant dent in Airbnb’s growth.  As a result, Airbnb decided to tighten up and return to its core of everyday people hosting their homes and offering experiences.  This meant putting some activities on hold (e.g., transportation) and scaling back on others (e.g., investments in luxury properties).  

Questions:

  • As the example above illustrates, it is imperative that companies be able to prepare for strategic uncertainties as much as possible.  While COVID-19 might have been difficult to predict, many other strategic uncertainties exist for Airbnb.  Identify and explain one such strategic uncertainty.  While  your answer here can be related to COVID-19, there are plenty more out there to choose from.  If you do choose one related to COVID-19, make sure that you use original thought regarding what new uncertainties related to the pandemic might exist.
  • How should Airbnb respond to the demographic trends outlined in your textbook? What about cultural trends?  Notice that this says “should,” meaning don’t focus on what Airbnb is already doing–you need to do your research here!  Please be sure to answer each of these questions; they should not be lumped together but instead treated separately. 
  • Note that there is a 2 page limit for content (excluding references).  Please do not use single spacing–line and a half or double spacing is preferred.  Font size 12 point.  Use APA or MLA for proper citing and referencing (refer to Purdue OWL (Links to an external site.) for examples).