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Airbnb’s Strategic Challenge

Watch Raj Venkatesan describe Airbnb's strategic challenge of maximizing rental prospects for hosts and rental options for guests.
So if you look at the strategic challenge of Airbnb, we first need to understand how they make money. So Airbnb is a portal that makes guests and hosts come together and Airbnb charges both sides of this platform. So for guests it charges about 6 to 12% of the reservation subtotal. And for hosts it charges about 3% of the service fee. Now if this is how Airbnb makes money, what would be the metric and the strategic challenge that Airbnb is trying to address? So if you look at Airbnb strategic challenge it is basically how can I make the properties that are on my portal to be rented as often as possible?
Airbnb really does not want any of the properties that are on its portal to go unrented. That’s their objective. Now, what can they do to address this objective? They need to see if they can use all the user generated data. The reviews that are coming from the promotion part of the four ps and the price. If they can use these two levers, how can they use these two to improve the rental prospects of the host and the guest. And that is a strategic challenge that Airbnb’s faced with. And that’s what we are going to see, how Airbnb can address this strategic challenge using data that they generate on their website.

Learn about Airbnb’s strategic challenge of maximizing rental prospects for hosts and rental options for guests.

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