As an accommodation booking agency, airbnb has a
great track record. Started in 2007 it has even beaten combined market value of
Hilton & Hyatt within 10 years of operation. What fascinates is the way
they have worked up and sketched a winning business model. Here is bird’s
eye-view:
Mission: Connecting
travellers seeking authentic experience & affordable accommodation with
hosts offering unique & inspiring spaces around the world. Strategy concept is to use peer to peer networking where two
inter-related groups, travellers and space holders are matched-up and the
portion of the transaction value is charged as service fee.
Here are the building blocks of their business model:
Key
partners: On the
supply side it has individuals/hotels bringing available space to market. On
the demand side individuals/corporates who need such accommodation
Key
activities: Networking between guest & hosts; ensuring
satisfied guests return with repeat bookings; encouraging hosts to provide
value for money for spaces listed
Key
resources: Networking data; list of spaces & events
requested with details; list of homes & hotel rooms made available along
with quoted pricing
Value
proposition: Community
based two-sided on-line platform facilitating available spaces in homes &
hotels are occupied giving value to owners and at the same time affording
guests with authentic and enjoyable experience along with value for money to
the renters who use such spaces
Customer
relationship: Travellers feel at home in distinctive
homes/hotel rooms; owners feel their spaces are occupied with reasonable
economic return along with proper use of care by renters. Security, transparency
in addition to privacy are guaranteed
Channels: On
–line facilitation of spaces available and associated pricing to the wider
market to ensure that proper choice can be made by both owners and travellers
Customer segments: Guests are classified by travel-type, demography,
income bracket and user duration. Hosts are classified by type of owners,
location, space details and price quotes
Cost
structure: All
expenses incurred in getting guests to occupy including direct & indirect
cost. In addition support cost such as safety & insurance cover along with
compliance and legal expenses are included
Revenue
stream: Guest pays around 9% of the total transaction
whereas hosts pay about 3% of the transaction. Ostensible guests pay more
because finding ready owners and type of accommodation suitable for guests are
fairly complex job nowadays.
Cheers!
Muthu
Ashraff Rajulu
Business Strategist
Mobile: + 94 777 265677
E-mail: cosmicgems@gmail.com
Blog: Business
Strategist
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