Airbnb Case Study
How Airbnb Could Ensure the Ethical Treatment of Consumers
The Airbnb business is rapidly growing worldwide due to the convenience and comfort they offer guests. However, there are various concerns that could impact the relationship between the guests and the host. One of the major concerns is the privacy of the guests. According to Cameron (2022), the lack of regulations in the Airbnb industry enables hosts to install hidden cameras, thus violating the privacy of their guests. Another concern is poor customer service. Some hosts take time to respond to guests’ inquiries and sometimes ignore a guest’s message, especially if the requested service is unavailable. These concerns create a need for developing ethical standards that hosts should observe to ensure that guests’ needs and preferences are met. One of the measures that Airbnb can take to ensure the ethical treatment of consumers is informing guests whether there are cameras within the premises to avoid violating their privacy. Hosts should also ensure that the cameras are not installed in areas where guests require privacy, such as the bathroom and toilet. The second measure that Airbnb can take to ensure the ethical treatment of consumers is refunding guests the money they pay to book a house before they check in if the house does not meet their expectations. The pictures posted by hosts should also be verified to ensure that they clearly show the home where the guest will be accommodated. Airbnb can also ensure the ethical treatment of consumers by verifying user reviews so that hosts do not create fake reviews that may mislead guests.
The prices of accommodations should also be set using quality and cost-based strategies to prevent overpricing, which is a common unethical practice in the Airbnb business. According to Dugdale (2022), a cost-based strategy includes setting the prices of a product or service based on the cost of production, distribution, or manufacturing. In the case of Airbnb services, the cost-based strategy can be applied to set the price of accommodations based on the amenities provided and their location. For example, accommodations in developed areas may be more costly than those in underdeveloped and developing regions. Consequently, the quality-based strategy includes setting the price of a product or service based on the quality of a product or service. The quality of Airbnb services may be determined based on the amenities provided. In the international market, amenities may vary based on culture, lifestyle, and level of development. Therefore, prices in the global market should be flexible based on standard and mandatory amenities such as air conditioners in regions with extremely high or low temperatures.
The Question of Having a Separate Strategy for the International Component of Their Business Model
The Airbnb business model is described as a multi-sided platform connecting a host who has available short-term accommodation and is interested in renting it out and a guest looking for short-term accommodation (Lee & Kim, 2019). The business strategy adopted by Airbnb includes three elements. One of the elements is the use of the platform business model that includes interactions between a host and a guest on an online platform. The platform receives a commission to sustain the interaction. The second element is a high level of technology integration into various business processes. For example, the Airbnb business includes using machine learning to improve guests’ searches, help hosts optimize prices, prevent fraud, and match guests with the most relevant listings. The third element focuses on trust and community by enabling hosts to share their experiences, ask for advice, and get advice on the best listings around their search area. The business strategy has been effective in sustaining a good relationship between guests and hosts. The business strategy also connects guests and hosts in different countries because they can search for accommodation in any location through the Airbnb platform and get relevant suggestions from machine learning. Therefore, there is no need for a different strategy for the international component of their business model.
References
Cameron. (2022). AIRBNB ISSUES: Unethical or cause for concern? The World Pursuit. https://theworldpursuit.com/airbnb-ethical-issues/
Dugdale, D. (2022). Pricing strategies. Strategic Pricing and Management Accounting, 70-80. https://doi.org/10.4324/9781003272731-8
Lee, K., & Kim, D. (2019). A peer-to-peer (P2P) platform business model: The case of Airbnb. Service Business, 13(4), 647-669. https://doi.org/10.1007/s11628-019-00399-0
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Question 
Read “Case 2: Airbnb in 2018” in your Connect textbook.
Write a 350-700 word case analysis:
In the accommodations market, Airbnb appears to have a significant advantage over its competitors in terms of regulations affecting the operations of its business.
Airbnb Case Study
Develop a business strategy that will allow Airbnb to meet local, state, and international regulatory requirements and motivate individuals to benefit from participating in this space of the accommodations market. Address the following questions:
How can Airbnb ensure the ethical treatment of consumers?
Should there be a separate strategy for the international component of their business model?
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