Airbnb Pestle and Swot Analysis 2019

By: Prudence K Magezi & Jonathan Kush

Abstract

Through the years, Airbnb has established itself as one of the most profitable business in the sharing economy alongside Uber through its spearheading efforts in using technology to create an opportunity in the global hospitality business. Boosting over 5 million lodging options in over 81,000 cities and 91 countries globally, the company was estimated to be worth at least $38billion as of 2018. Airbnb has experienced success through the years; however, its future growth is threatened by growing legal issues. The biggest barrier to the company’s growth is restrictions imposed by legislative bodies, municipalities and communities on the use of lodgings for short term rental purposes. Using a PESTLE, the author will examine threats from economic, social, technological, legal and environmental issues while identifying the available growth opportunities in the market. We will then use SWOT analysis to examine its key strengths and weaknesses and how it can utilize strengths to mitigate inner weaknesses as well as threats.

Analyse the macro environment of Airbnb and vacation rental industry using Pestle and the impact of external factors, followed by an Airbnb Swot Analysis.

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1.0 Introduction

Founded in 2008, Airbnb is a privately-owned company that operates online market place and hospitality services. With headquarters in Francisco, the company’s accommodation on market place provides access to over 5 million unique places to stay in over 81,000 cities and 91 countries globally (Airbnb press room 2018).

The company’s success has mostly been because of its low costs, convenience and ability to expand the capacity of rooms during peak periods among others. As of 2017, Airbnb’s revenue was approximately $2.6billion with $93million in profits, operating income of $450 million and net income of $93 million (Bort 2018).

2.0 Airbnb pestle and Swot analysis 2019

2.1 Political environment

2.1.1 Government laws and travel policies limiting public employees from using short term rentals.

Several state governments including Georgia, North Carolina and Illinois have put laws that ban or discourage their employees from using short term rentals. According to the different government travel policies, lodging claims must be documented with receipts from businesses that offer general public lodgings including hotels and motels in which case stays at private residences are not refundable (Castro 2017). These restrictive rules which limit government employees from using private residences are a threat to Airbnb.

However, some states have recognized the imprudence of these bans and put a stop to them. In 2016, Gov. Jerry Brown of the California state signed a legislation prohibiting state agencies from banning employees from using short term rentals (Castro 2017). According to the report by Government Technology, such laws are a hindrance to innovation and the development of sharing economy (Castro 2017).