Launched in 2008, Airbnb has through the years grown from strength to strength to become the most recognised brand in the online home sharing industry. As of today, the company is, one of the largest privately owned companies with about $75 billion value by the end of 2020. Despite its fast growth, the company continues to experience a number of challenges, with the most notable one being the challenging regulatory environment. The business model has become vulnerable to strict regulations at the local, state and country level. In fact, some locations have considered the business model illegal and put in place regulations and laws banning it. According to the findings, the challenging regulatory environment coupled with the COVID19 impact on the general economy, consumer confidence and growing unemployment among others pose a major threat to the company’s biggest asset, its scale.
Using a pestle analysis, this report firstly examines the macro external environment of Airbnb and how various external factors have/ are likely to impact its growth potential and performance. A swot analysis identifies Airbnb’s internal strengths, plus its weaknesses before examining strategies Airbnb can use to exploit emerging opportunities to leverage available opportunities while mitigating arising threats.
Magezi, K. Prudence (2021) "Airbnb Pestle and Swot Analysis 2020-2021" 123 Writing [Online] at https://www.123writing.com/sample/airbnb-pestle-and-swot-analysis-2020-2021
Magezi, K.P. 2021. Airbnb Pestle and Swot Analysis 2020-2021. 123 Writing. Retrieved from https://www.123writing.com/sample/airbnb-pestle-and-swot-analysis-2020-2021
Airbnb Pestle & Swot Strategy Case Study
Key Learning Outcomes
- Understand the broad global macro-environment of Airbnb and the hospitality/global vacation rental industry in terms of political, economic, social, technological, environmental and legal factors (PESTEL/PEST/STEEPLE).
- Use our swot analysis example to gain an overall understanding of Airbnb's strengths and weaknesses and strategic options arising from the opportunities and threats that have been identified from the Pestle analysis example on it's business environment.
- To apply strategy business models and frameworks such as Pestle/Pest/Steeple, Swot etc to real company cases.
With a market value of $86.2 billion as of 2021, Airbnb has grown from a Silicon Valley start-up to the biggest online travel company in the world (Caville et al 2021). As of February 2021, the company had 7 million listings in more than 220 countries and is still growing strong, irrespective of the regulatory challenges it continues to face. Since its launch in 2008, the company has continued to experience losses year over year. As of 2017, the company’s loss was $70 million a number that has grown through the years to $674.3 million in 2019 and $696.9 million in 2020 (Lyon 2020). As of 2020, its revenue shrunk by 19% from $1.65 billion to $1.34 billion because of COVID 19 impact. Never the less, the company rebound very fast as domestic travel gained momentum (Lyons 2020).
Figure 1: Share of leisure and business travelers using Airbnb in the United States and Europe from 2015 to 2018
As shown in figure 1, the share of Airbnb users across the US and Europe has been growing steadily, with the number growing to 29% in 2018 (Statista 2020).
With a market share of over 20%, Airbnb is today the most popular platform in the whole vacation rental industry. With its fast growth, its market share is forecast to even grow further. Despite the highly competitive market and challenging environment, the company has continued to scale through acquisitions. When it comes to traffic, Booking.com is also gaining momentum, but Airbnb’s command of direct traffic sets it apart as a brand. All in all, Airbnb continues to enjoy its scale advantage and exclusivity over competitors.
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