Airbnb Environmental Complexity #1: List out as many elements affecting your company as you can for each of the sectors below. Industry (Competitors, industry size, competitiveness, related industries): The peer-to-peer (P2P) market is relatively new to the internet environment. While Airbnb is currently the giant based on size and financial backing, there are several companies that also have a share of the market. In addition, there are many newcomers that are trying to cash in on the concept including some that have focused on specialized markets such as family friendly, sexual orientation or race. Significant competitors: • Tripping.com is not a P2P rental site rather a search engine similar to Hotels.com or Cheaptickets.com. Their platform has the ability to search multiple booking sites simultaneously so you can compare prices or locations. They have agreements with HomeAway, FlipKey, Homestay, Roomorama, Wimdu and numerous others. They have over 8 million properties in 150,000 destinations. (Chan, 2016) • HomeAway, acquired by Expedia, is one of Airbnb’s largest competitors with over 1 million listings worldwide servicing 190 countries. They have acquired several other rental websites including VacationRentals.com and VRBO. Their annual revenues exceeded $500 million in 2015 and they were valued at $3 billion. (Taylor, 2016)
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Airbnb Environmental Complexity
#1: List out as many elements affecting your company as you can for each of the sectors
below.
Industry (Competitors, industry size, competitiveness, related industries):
The peer-to-peer (P2P) market is relatively new to the internet environment. While Airbnb is
currently the giant based on size and financial backing, there are several companies that also
have a share of the market. In addition, there are many newcomers that are trying to cash in on
the concept including some that have focused on specialized markets such as family friendly,
sexual orientation or race.
Significant competitors:
• Tripping.com is not a P2P rental site rather a search engine similar to Hotels.com or
Cheaptickets.com. Their platform has the ability to search multiple booking sites
simultaneously so you can compare prices or locations. They have agreements with
HomeAway, FlipKey, Homestay, Roomorama, Wimdu and numerous others. They have
over 8 million properties in 150,000 destinations. (Chan, 2016)
• HomeAway, acquired by Expedia, is one of Airbnb’s largest competitors with over 1
million listings worldwide servicing 190 countries. They have acquired several other
rental websites including VacationRentals.com and VRBO. Their annual revenues
exceeded $500 million in 2015 and they were valued at $3 billion. (Taylor, 2016)
• Homestay focuses on a personal interaction with hosts. Instead of listing a vacant rental, a
guest is booking a room in the host’s home. Hosts are encouraged to list their hobbies and
help with sightseeing. (Timothy, 2017)
• Roomorama makes safety a top priority. They have over 60,000 properties in over 4,000
locations across the world. It is extremely popular in Europe and has a strong presence
amongst business travelers.
• Wimdu has over 300,000 listings in over 140 countries. They are one of the biggest
competitors in the European market. (Techboomers.com, 2017)
• TripAdvisor is the largest, most trusted online travel community which includes reviews
of vacation rentals, restaurants, tours, etc. They acquired FlipKey and several other P2P
sharing sites which is allowing them to evolve to a full-service booking platform.
(Taylor, 2016)
• Please note that there are several other competitors in this market that are not listed due to
size of the firm or their specialized niche did not directly correlate to Airbnb’s overall
mission.
Competitiveness: Airbnb is the current industry leader of P2P sharing sites. While their product
is no longer unique, they have been able to capitalize on early marketing strategies. Being at the
forefront has enabled them to recruit hosts early on rather than having to compete for listings.
Airbnb has the lowest accumulative costs for their users. They do not charge a listing fee for
potential hosts rather their fees are built into a 3% host percentage and a variable guest
percentage between 6-12%. (Timothy, 2017)
Airbnb established the concept of P2P home sharing. In the last few years they have expanded to
include a charitable foundation, restaurant reservation site, and have purchased several smaller
P2P home sharing sites.
Industry size: Travel and tourism now accounts for 10% of global gross domestic product with
$7.2 trillion in revenue. As the market continues to increase, Millennials and Generation Z have
been quick to embrace the home sharing concept. Millennials already account for 60% of
Airbnb’s guests. In addition, the senior population has been their fastest growing demographic.
(Airbnbcitizen.com, 2017)
Airbnb’s website boasts over 3 million listings worldwide, servicing over 65,000 cities and 191
countries. As of 2016, Airbnb listed $1.7 billion in total revenue and $100,000,000 in profits
(Tom, 2017) As of March 2017 they have acquired an additional funding now totaling more than
$3 million and valuing the company at $31 billion. (Wikipedia.org, 2017)
Raw Materials (Suppliers, manufacturers, real estate, services):
Suppliers: Since Airbnb does not offer goods directly, suppliers could be considered the hosts
who are offering their homes to renters. Airbnb doesn’t necessarily have vendors. They have
partnered with businesses such as American Express and Delta Airlines to provide incentives for
people to book or host through their service.
Real estate: Airbnb has 22 locations from China to Canada including several in the United
States alone. Their headquarters are located in San Francisco, CA.
Services: Airbnb does not directly offer goods or services to users. They offer a platform which
connects individuals who want to transact business with each other. (Nath, 2017) Airbnb helps
facilitate rental property via a P2P sharing platform. They recently have begun facilitating
Experiences which enables hosts to offer a travel guide adventure based on the particular region
they represent. Experiences focus on Sports, Nature, Entertainment, Food, Arts, or Social Impact
type activities. (Airbnb.com, 2017) Airbnb also created mobile applications that can be utilized
via iOS or Android technologies.
Human Resources (Labor market, employment agencies, universities, unions):
Airbnb has 18 departments which include Engineering, Data Science and Analytics, Finance and
Accounting, Business Development, Customer Experience, Design, Employee Experience,
Information Technology, Legal, Operations, Localization, Marketing and Communications,
Photography, Product, Public Policy, Research, Talent and Trust and Safety. Each department
consists of personnel from several different geographic regions. They utilize a matrix structure
which has enabled them to work cross departmentally and improve overall communications.
(Airbnb.com, 2017)
In July of 2011, Airbnb had just over 130 employees worldwide. By September of 2011 than
number had nearly doubled. By 2015 they had increased to 2,368 employees and as of May 2017
the number has increased to over 3,100. (Quora, 2017) To date they are currently recruiting for
over 220 positions. (Airbnb, 2017)
Airbnb has a diverse workforce however they aim to increase its percentages of minorities in the
upcoming year. They will focus their efforts on recruiting from historically black colleges as
well as schools with large Latino populations. They are also working with a recruiting startup
that will source candidates from underrepresented groups and have implemented a new policy
that will require women and people of color are included in candidate selection processes for
senior positions. Airbnb has continued to address benefits, which is a key recruiting tool. They
have enhanced their parental leave program, supported LGBT related policies including domestic
partner benefits and transgender-inclusive healthcare and expanded programs that include
disabled, immigrant, Native American and Asian populations. (Blog.atairbnb.com, 2016)
Airbnb has also created their own University program, Data University, which consists of
programs ranging for the beginner level to 300 level courses which targets engineers and data
scientists. (Feng, 2017)
Airbnb was voted Glassdoor’s #1 company to work for in 2015. In 2016 Airbnb reorganized
their HR department renaming it Employee Experience. The former structure had different
divisions for each function of traditional human resources roles. The new structure brought those
functions into one department which combined Recruitment, Benefits, Compensation, Diversity,
Culture, Facilities, Safety and even Food Services into one comprehensive department. (Morgan,
2016) Despite the reorganization they dropped to 35th place in 2016. Reasons reported by
employees included a loss of growth potential, less communication from management and a
decrease in work-life balance. (Kauflin, 2016)
Employment agencies:
Airbnb’s postings are advertised via their webpage. They post positions based on location as well
as function. They also recruit at University job fairs most recently focusing on historically black