With an ever changing world comes the introduction of new industries and businesses. Some of these experience rapid growth at first but die out due to changing customer wants and needs. Other companies continue to develop slowly and steadily rise to the top. AirBnB however, has quickly vaulted its way into one of the top businesses in the Hotel & Hospitality industry in just under 10 years, now exceeding historically dominate hotel chains such as the Hyatt. The company is estimated to be worth around 10 billion dollars and indicating that the only direction it’s trending is upwards. AirBnB has quickly transformed the way that consumers approach traveling, book lodging, and view real estate, but still hasn’t even reached its full potential.
Why So Successful?
The success of AirBnb is attributed to a number of different key differences between itself and most hotel chains. One of the principle reasons for its rapid growth is due to the limited interaction the company has to have with its own properties. AirBnB isn’t responsible for building, cleaning, or maintaining the accommodations. The business’s main source of financial investment is mostly in promoting experiences to potential customers and maintaining the website to ensure smooth transactions between homeowners and clients. They take already established property and try to convince people to stay there and once realized, they take a percentage of the earned money. Another reason for their outstanding performance is because they can offer so many different types of housing experiences. Travelers are looking for more real or fantastical experiences, and AirBnB allows people to stay anywhere from a houseboat, to a yurt, to even a castle! The flexibility of all the different housing the company pitches can help draw in a much more diverse crowd than any hotel chain could ever hope to offer. These two aspects have had a profound affect on the economic market. One study estimated that AirBnB cost New York City and its hotel industry approximately 2.1 billion dollars this past year, and that the losses will increase rapidly.
What Does It have to Offer?
Aside from incredible flexibility in lodging options, AirBnB has plenty of unique experiences to offer consumers. Oftentimes, the cost of staying at the available accommodations is far better than the hotel rates in a similar area, especially for large groups or travelers willing to stay in a single room with a host family. The company also brought value to something that vacationers never realized they wanted. Staying in a person’s home in another part of world gives people the opportunity to more fully integrate themselves into a community and culture. Recent research has indicated that tourists would actually rather shed their title and explore a new place as locals. Most accommodations can be found outside of main hotel districts and tourist areas, appealing to the new generation of world travelers. Travelers no longer have to endure vacations pent up in tiny hotel rooms, but instead can enjoy the comforts of home away from home.
Room For Improvement
Despite all the revolutionary changes AirBnB has made in the Hotel & Hospitality industry, this rising company still has plenty of room to grow. Just because people want a different experience doesn’t mean that they don’t still want the reliability and cleanliness present at a typical hotel chain. A recent survey conducted in Australia on AirBnB cleanliness revealed that, “The data shows that Australians believe the main benefit of using professional cleaning services to manage an Airbnb property is to create a hotel-like experience for the guests.” Clearly, travelers still want to enter into a hotel clean standard environment so they can feel more comfortable and don’t have to think about other people’s germs. Aside from cleanliness concerns, some guests in the past have been disappointed and feel cheated by their accommodations because of a lack of transparency by homeowners and clear pictures posted on the page. Although a minor problem, AirBnB could potentially take their success to the next step with a few adjustments.
AirBnB is definitely one of the companies on the rise in this new age, paving the way with innovative thinking in a booming market. The research indicates that the company is changing the way that individuals and families are traveling abroad and that its appeal with consumers will only grow. As AirBnB continues to develop and grow as a business, it is evident that its success can reach new heights.