Airbnb conducted a PESTLE analysis to understand the political, economic, social, technological, legal and environmental factors impacting their business. Politically, they must ensure hosts comply with housing laws. Economically, Airbnb benefits hosts and cities by offering cheaper accommodations than hotels. Socially, guests share experiences on social media which helps Airbnb grow through word-of-mouth. Technologically, Airbnb relies heavily on their app and website to operate. Legally, hosts must agree to terms ensuring compliance with regulations. Environmentally, studies show Airbnb has a smaller carbon footprint than hotels.

1. Strategic Management
Submitted by GROUP 3:
Pallavi Mishra (19DM130)
Raja Babu (19DM152)
Rupesh Singh (19DM169)
Thokchom Sana Ahingba
(19DM228)
Shagun Singh(19DM189)
Shubhali Singh(19DM208)
PGDM SEC B MARKETING

2. PESTLE ANALYSIS FOR THE FIRM
Criteria Description
Political  Unregulated Housing Laws
 People offer to rent their homes, apartments or rooms to strangers. Airbnb needs to ensure
they are following each state’/ Country’s housing guidelines failing which may result in legal
complications for the company.
 Political instability has a negative impact on the business of Airbnb
Economic  Benefiting hosts and cities
 Airbnb is a major competitor to traditional hotels now as it offers cheaper alternatives and
serves around 9 million people worldwide.
 Airbnb also creates jobs for the economy, additional income for the hosts and revenue in the
form of taxes for the governments.
Social factors  New Experiences
 Visitors document their experiences and post online which spreads through social media and
thus lets Airbnb grows through word of mouth.
 Hosts also discusses their guests activities. This allows free exchange of ideas, culture, beliefs
and promotes social cohesiveness and understanding.
 Visitors can also do “social impact experiences” where non-profits host and receive 100% of
the profits under ‘Experiences’ Initiative of the company

3. Criteria Description
Technological
factors:
 Highly dependent
 Airbnb relies heavily on technology. Visitors will book rooms on the app or through the
website only.
 They also use automation. If a host doesn’t respond to a guest’s message, Airbnb will
automatically text the host for them.
 Without technology, rooms can’t be booked. Hosts can’t be contacted. And Airbnb
wouldn’t function as easily as it does today.
Legal factors  A thorough terms and conditions
 Hosts must agree to terms and conditions, provided by Airbnb, agreeing to follow
taxation, housing, and tourism regulations. Airbnb has faced legal issues for failing to
comply to housing regulations.
 There is a legal document that prevents Airbnb from being liable when issues appear.
Environmental
factors
 Healthier than hotels
 Airbnb boasts they reduce energy usage compared to hotels. This includes lowering
greenhouse gases, less water consumption, waste avoidance, and increased
environmental awareness.
 Various studies have been published claiming Airbnb is more environmental friendly
than Hotels.

5. COMPANY’S VISION, MISSION
• Vision Statement
“Belong Anywhere”
• Mission Statement
Airbnb's mission is to help create a world
where you can belong anywhere and where people can live in a
place, instead of just traveling to it.

7. COMPETITORS-
● After the success of airbnb multiple players entered the industry including the
traditional hotels like Marriott and Hyatt.
● Hyatt’s partnership with oasis. Oasis manages a portfolio of high-end short-term rentals
and offers them up to guests. (2017)
● Homestay - A direct competitor to airbnb, they focus exclusively on hosted housing e.g.
where the host is present. This is very similar to Airbnb. (2016)
● Flipkey - Like airbnb, every host/owner is verified to ensure that the property is real
and safe for users. (2007)
● OneFineStay - It is an online private home rental platform founded in London in 2009
which became part of Accor in 2016.

8. AIRBNB PORTER’S FIVE FORCES -
● Bargaining Power of Buyers: The bargaining power of buyers is high because they have
a broad range of services to choose (price, location and host rating).
● Bargaining Power of Suppliers: The negotiating power of suppliers is negligible because
airbnb controls both the supplier and the clients.
● Threat of Substitutes: The threat of substitutes is quite high because switching costs are
non existent for airbnb users.
● Competitive Rivalry: Rivalry among existing firms in peer to peer lodging is fierce.
● Barriers to Entry: Barriers to entry might not seem much considering any website can
pop up and start competing, but the reality is quite different.

9. The hospitality sector direct contribution to GDP in 2018,was Rs 7.37 trillion (US $98.17
billion). This is expected to reach Rs 12.68 trillion (US $194.69 billion) in 2028, implying
a CAGR of 7.23 percent during 2012-28.
PROFITABILITY GROWTH OF THE INDUSTRY
The COMPOUNDED
ANNUAL GROWTH
RATE (CAGR) in the
last three years is
4.041%

10. PRODUCT LINES
NORMAL OFFERINGS
• Any host can get his/her home listed under Airbnb
• This is for travellers who prefer budget friendly accommodations which are cheaper
than hotels
LUXURIOUS OFFERINGS
• Airbnb Plus
Highest quality homes which hosts known for great reviews and attention to detail.
Every home is verified through In-person quality attention to ensure quality and
design
SPECIAL OFFERINGS
• FOR GROUP TRAVEL
People travelling in groups seeking for adventure or any particular occasion or
event

11. AIRBNB - A STRATEGY PLAYER
Market
Penetration
• Publishing positive emotional
stories
• Intensive advertising campaigns
in the cities where there are
famous events
• Economy related conferences
• Sponsoring sports events
• Attracting celebrities

12. • Hiring freelancer photographers
• Enhancing the website and apps
• Integrating Twitter and Instagram
• Hiring psychological experts to study the
UX
• Home security checklist
• Encouraging local communities’ events
• Improving the service based on the most
frequent complaints
Product
Development

13. • Flight booking
• Pick-up and drop services (uber
like)
• Two-sided tour guiding
Concentric
Diversification

14. • Expanding the operation in the
Middle East and the Far East
(attractive and trendy)
• Customize the services based on
different cultures and traditions
needs.
Market
Development

15. ORGANIZATIONAL STRUCTURE
Brian Chesky
(Co-founder & C.E.O.)
Presidents, SVP’s, VP’s
VP of Experiences
President of Homes
SVP of Global Policy
and Communications
VP of Employee
Experience
Head of Global
Diversity and Belonging
Co-founders
Chief Product Officer
CSO, Chairman of
Airbnb China
Chief Financial Officer
General Counsel
Head of Design
Chief Operating
Officer
Chief Trust Officer
Airbnb Follows Holacratic Organizational Structure

16. AIRBNB’S AFFILIATION PROGRAM
Guest Affiliate Program Host Affiliate Program
Strategy
• Partnering with sites that attract at least a million monthly visitors.
• Commission-generating business model.
• Enabling API’s (Application Program Interface) to show publishers
what’s available in real time.
Pros
• Will boost revenue.
Cons
• Have to share revenue with a third party.

17. PERFORMANCE OF AIRBNB
Airbnb’s Growth
• 4 million homes
• 191 countries
• 100,000 places booked daily
• Airbnb’s valuation is $35 Billion
• Revenue of 1.7 Billion in Q3, 2019
Income Statement (Annual)
Intends to go Public in 2020
• Airbnb is spending big to deal with safety
issues, upgrade its tech, and grow its user
base.
• In the first nine months of 2019, the
company posted a loss of $322 million,
according to the Wall Street Journal.
• The company reportedly increased its sales
and marketing expenditure by 58% i.e. $367
million in Q1 in 2019.
• Airbnb made a number of high-profile
acquisitions recently like Urban Door.
• Should Airbnb go public this year, it’ll face
increased investor skepticism around
money-losing tech companies.

18. RECOMMENDATIONS-
To develop our services and products that match with target market needs:
1. Adding an option of “from home to home” utilizing our partnership with uber,
and tour operators, where the guest can choose a full package including flights,
internal transfer and local tours and excursions.
2. Develop the following programs -
i. Culture Exchange Programs for young people.
ii. Environment awareness programs for the interested.
So on and so forth.

19. THANK YOU
ENJOY A HAPPY STAYING IN AIRBNB