Airbnb is an online marketplace that allows individuals to lease or rent their homes out. The service is amazing and is definitely an example of disruptive innovation. Not only is Airbnb creating new markets, however it’s also receiving backlash in New York City. Airbnb is a great service and very similar to Uber except for homes. Both services provide a very easy to use platform and an incredibly flexible schedule.
Airbnb began as a startup company in 2008 and is now valued at 10 billion dollars. It is a great example of entrepreneurship which is creating new opportunities for consumers. Airbnb is a very innovative company that is disrupting the hotel industry and taking advantage of its online marketplace. Before the internet Companies made their revenue and interacted with their customers through retail stores, distributors, and salespeople. However Airbnb has taken full advantage of the internet and has grown at an exponential speed. One of the reasons why the company is valued at 10 billion dollars is because of its ability to access such a large cliental so efficiently at such low costs.
Airbnb is located in over 200 countries and is targeting individuals who have a passion for traveling. Airbnb is disrupting the hotel industry and has a competitive advantage because of its broad range of prices and places to stay. Airbnb also has a very attractive and easy to use website. It stays consistent to the normal layout and its platform is very user friendly. In addition, the mobile app is very appealing as well. Both the mobile app and website promote traveling and create a need for individuals to explore the world.
Airbnb is a very successful company with a high customer satisfactory rating, however it is still receiving backlash in New York City. Governor Cuomo of New York State signed a law that made short-term rentals illegal and was effective immediately. This was a direct shot at Airbnb. The same day the law was passed, Airbnb decided to open a law suit and sue the state. This is why Airbnb is a perfect example of disruptive information, because not only is it creating a new market, however it’s causing the hotel industry in New York to take a hit, which is very impressive.
Sources:
https://en.wikipedia.org/wiki/Airbnb
https://www.youtube.com/watch?v=i398KaQawnI
http://www.thestrategygroup.com.au/airbnb-disruptive-innovation-at-a-valuation-of-10b-in-five-years/
I personally have not used Airbnb yet. However, lots of friends around me are using this and suggesting me to use this. I think Airbnbn is very convenience because it provide cheaper alternative to hotels. Airbnb is getting larger and larger around the world. During recent years, it opens the market in China. Any company looking at China’s enormous population and continually growing economy must see a gigantic market, but entering the Chinese market is no easy task, and this is just as true for Airbnb as any company. Airbnb’s development in China will ultimately depend on how well they perform. However, there are three challenge that Airbnb is facing in China. 1. Fish out of Water. Airbnb’s biggest challenge is adapting to the peculiarities of the Chinese market. 2. Regulatory risk:The online short-term rental industry still occupies a gray zone. Regulatory authorities have yet to provide clear answers regarding taxes, safety, population management and other aspects of the C2C short-term rent model. 3.Chinese imitators take aim As the whole world was getting turned on to Airbnb, multiple local imitators appeared in China.
http://www.businessinsider.com/three-challenges-facing-airbnb-in-china-2015-8
I have never used Airbnb but some of my friends love it. I think Airbnb is a great design because of its convenience and affordable price. I have a friend once went to Las Vegas for Spring Break. After arrived the hotel she booked online, she found that the minimin age for check in that hotel was 21 while she was 19, and most hotels around Las Vegas had this policy. Then she decided to book a room through Airbnb. She said Airbnb really helped her otherwise would she have no place to sleep. Therefore, I think Airbnb is helpful for emergency situation especially when all hotels are not available.
However, while Airbnb provides convenience to travelers, it harms hotel industry for sure. Cities like Las Vegas has a lot of luxury hotels and the Airbnb will decline the revenue of those hotels. I think there should be an equilibrium point between Airbnb and hotel industry. Moreover, as a substitute for hotels, Airbnb will help hotels to improve their service quality and develop new service, which will benefit travelers at last.
I definitely see the beauty in having AirBNB around us. One benefit of using AirBNB is the local and authentic feel staying in a used apartment can give you. These apartments usually have access to a pantry, unlike hotels and can give you the opportunity to buy local foods and cook them on your own. AirBnB also allows users to save money, especially in a city such as New York City. It definitely attracts younger travellers such as myself who are on a budget. I definitely do see why hotels in the city are not happy with this disruptive economy as it affects their customer market and hence revenue. However, I believe that these hotels should also find a more innovative way to market their own business. Like providing some kind of special service only hotels have or to lower their rates. However, AirBnB has been recently linked to having holding the customer’s cash longer than they should. For example, they hold the cash from 2-3 days just in case of cancellations, but it takes them more than a few days to refund, which actually puts off travellers who usually are in need of money right away. Hopefully NYC hotels could cash in on this information and figure out a way to beat these AirBnB and market themselves as being better.
I have never personally used Airbnb, but I am a traveler who plans on using it at some point during my experiences. It sounds very convenient, affordable, and able to be customized. This is a great innovation which allows travelers the comfort to a genuine homestead or apartment at a price that isn’t standardized and over priced since, unlike hotels, users on both end of Airbnb are using it solely as a quick and easy way to benefit themselves. It is not their goal to charge insane amounts since that wouldn’t appeal to someone looking for an affordable place to stay without all the extra amenities. This also isn’t their primary job or main form of income, it is merely something on the side that can allow them to make a little more money just for lending someone the comfort of their place. That being said I disagree with the law prohibiting Airbnb, I believe with regulation this “disruptive” innovation could be just the right addition for middle class people who want to have the luxury of seeing NY (for example) without the drawback of a hotel’s insane price for a bed for the night holding them back. Airbnb is also a great fallback around busy seasons when their is no vacancy in hotels, to have that option there. I don’t believe passing a law which makes it illegal, and has ridiculous fines for anyone who lets a person stay in their own home, is sane or utilitarian. There definitely needs to be more research and discussion on the topic of allowing this innovation.
https://www.airbnb.com/help/article/376/what-legal-and-regulatory-issues-should-i-consider-before-hosting-on-airbnb
http://www.marketwatch.com/story/new-yorks-new-law-against-airbnb-is-a-total-disgrace-2016-10-28
Although I have never used Airbnb, the concept of the idea is extremely beneficial to the users of the service. Especially in a metropolitan area with extreme prices such as New York City, Airbnb is a convenient way for travelers to find a cheap place to stay while also allowing residents of the area to gain a bit of extra cash. With hotels, you do not have as much flexibility and you are often forced to pay for amenities that you do not want or need.
Unfortunately, someone gets hurt from this form of disruptive innovation and that is the hospitality industry. Hotels in the area will not be able to compete with the low prices set by residents. I believe Governor Cuomo should not be allowed to pass a law prohibiting the service in the state. An innovative business such as Airbnb should be allowed to thrive and not be affected by laws from the Governor of the state. Preparing for the NYC Marathon, 34510 people used Airbnb over this past weekend. That many people equates to around $25 million in revenue. This extreme amount of money definitely can put a dent into hotels in New York City.
To the dismay of many travelers around the world, it looks like there will be no way of fighting the fact that Airbnb will be illegal in the state of New York. Airbnb provides customers with the convenience of lodging while boosting tourism in areas around the world. The only party hurt by the surge of Airbnb is the hotel industry. Fortunately for big hotel chains, it seems that the government is on their side. Airbnb could possibly be facing a lot of trouble if other states around the country decide to make similar decisions about their service.
http://www.nydailynews.com/new-york/nyc-marathon-runners-race-airbnb-new-state-law-article-1.2859787
So from my experience with Airbnb the rooms I’ve stayed in have just been spare bedrooms that people have in their house that they are willing to rent out to make some quick cash. I feel that in that regard Airbnb is a great program that allows people to stay in cities for just a short amount of time without harming the housing market by driving housing costs higher. This seems to be the reason New York City is trying to regulate Airbnb because regulators are worried that Airbnb gives users a way to rent out their empty apartments for short times, which takes available units off of the market for full-time residents. I believe that the city really has no right to tell landlords what they can and cannot do with their properties when it comes to renting out for certain periods of time. The real reason behind this new legislation seems to be hotels losing business because of the competition that Airbnb creates when it comes to rates for rooms. Airbnb even offered to crack down on host running illegal hotels and emphasized that they had already removed thousand of those hosts but the city refused their alternative to the legislation. Airbnb has really caused a stir in the market and they have a lot to fix in the eyes of the law, not only in New York but also in Amsterdam and Barcelona.
Source: http://www.nytimes.com/2016/10/22/technology/new-york-passes-law-airbnb.html?_r=0
With my personal experience with Airbnb, I love how it has opened a new market for cheaper alternative to hotels. Airbnb pretty much used the “solution-based thinking” approach learned in class to set the goal of providing cheaper housing instead of solving the issues of expensive hotels. With major cities such as New York City getting a lot of revenue from hotels and hotel parking garages, should a disruptive innovation such as Airbnb be responsible for providing the city with some sort of revenue to cover some of the losses that the city has taken. I would propose a small tax percentage on each Airbnb booking to help the city gain some more revenue, in which in the long run the economy would be better off. Ultimately, my question is should the city of New York be allowed to tax disruptive innovations that hurt businesses that have been in the city for so many years?
This is such an informative article for me personally since I have always been a user of Airbnb. I love the fact that the app enables me to choose what type of room setup I am willing to rent. Conventionally, traditional hotels only provide such a limited amount of variation for people to choose;however, Airbnb allows to make my on decision wether I want to live in an apartment that’s located downtown or a suburban house that’s rather tranquil.
During last Thanksgiving, my friends and I traveled Philadelphia and booked a very nice apartment that was only 10 minutes away from the city hall, downtown area. The apartment had everything we needed and the host was extremely nice. It was a great experience and truly helped us to enjoy our trip even more.
It is shocking to see that Airbnb is receiving a backlash in huge cities like New York since it has long been one of the most popular traveling spots all around the world. Nevertheless, it is understandable why Airbnb can be a big issue. There is huge number of hotels located in populated cities and Airbnb, with so many users such as me, truly can be a potential threat to the prosperity of these business chains. However, as a customer, I hope Airbnb and traditional hotel chains can manage to create a balance and make it possible for the existence of both these types of business, which will in turn benefit us more.