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Airbnb, What the Big Deal

In: Business and Management

Submitted By max66s
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Pages 5
AirBnB.com – What’s the big deal?

Air BnB is a growing online service which facilitates the availability and marketing of, generally, residential accommodation as tourist accommodation. Airbnb defines itself as a “social website that connects people who have space to spare with those who are looking for a place to stay".
The site has been the subject of much debate around its creation of a sharing economy for tourist accommodation which may avoid taxes, expose guests to undue risks, and broadly have a negative impact on legitimate tourist accommodation.
The last of these is a real concern as the site lists accommodation under three primary types: 1. “Entire place” – basically a holiday home or unit generally 2. “Private Room” – similar to B & B style accommodation 3. “Shared room” – similar concept / style to a sort of private backpacker accommodation
However, by industry practice Air BnB equates to an OTA or booking engine in style and seemingly focuses and attracts micro accommodation providers covering many traditional styles but also simply free bed space (being the original concept). Indeed the term micro-hotel has cropped up a lot lately in line with the service. Basically it facilitates turning homes into tourist accommodation – a lot like a B & B or Holiday Home – so what’s the big deal?

AirBnB charge guests a 9-12% service fee every time a reservation is booked, depending on the length of the reservation, and they charge hosts a 3% service fee to cover the cost of processing payments. From a marketing perspective then it’s basically a distribution channel – so what’s the big deal?

Airbnb's business model currently operates with minimal regulatory controls. They have implemented an insurance program (for “hosts”) and more recently some safety requirements for US properties. There is also a two way feedback mechanism and…...

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