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Friday, 20 June 2014

The Global Takeover – Airbnb

If you haven’t heard of Airbnb, the bad news is that you’ve probably been living in a cave for the last couple of years. The good news is that now, thanks to this company, you may actually find someone who is interested in renting your cave.

Over the last couple of years, we have seen a massive shift in the way that the hotel industry does business. From the birth of review sites like Trip advisor in the early 2000s, to the explosion of social media in the mid 2000s, the commodification of customer data has disrupted the type of influence that big name hotel brands usually yield. Airbnb, therefore, has taken this form of disruption to a whole new level.

Founded in 2008, Airbnb is as a digital marketplace that allows any user to rent out their accommodation for a specified time and price. By providing this universal platform, the company has essentially decentralised hotel accommodation by shifting power away from hotel chains to anyone with a spare room; effectively allowing everyone to compete on a level playing field.

Source: kellianderson.com

Now, with each addition of new accommodation offered by an Airbnb user, the consumer experience grows. Reviews are shared between all parties. Communication is made to be direct between both the provider and the consumer. This form of co-creation has allowed all parties to participate in determining the value of the service. Suddenly big brands matter less, marketing overheads matter less, and every Tom, Dick, and Harry can be a hotelier.

This change in the old guard has shaken up the hotel industry, with hotel chains scrambling to think of ways in which they can protect their business. Many have tried to overcome the issue by raising lawsuits and merely quibbling over the legality of such a venture. But where is the innovation? Instead of arguing, why haven’t they found new solutions to deal with such a business model? Why are we still being hammered with marketing speak and bombarded with phantasmagoric TV commercials?

A page should be taken from Airbnb’s book, in that co-creation of value is key to continual success. It isn’t about who has the most accommodation spaces, or the biggest marketing budget, it’s about collaboration; every stakeholder should be involved in providing a unique experience. This could mean the difference between experiencing something ordinary, to experiencing something extraordinary.

Kenneth Bjorn Schaap
Current student in the Master of Marketing program at the University of Sydney Business School

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