1. Introduction
In this SWOT Analysis, we present Airbnb strategy analysis by applying SWOT framework. The Airbnb SWOT analysis covers Airbnb business analysis, competitive analysis and Airbnb market analysis.
2. Company Overview
| Company name | Airbnb (Air Bed and Breakfast) |
| Year founded | 2008 |
| Industry | Lodging |
| CEO | Brian Chesky |
| Headquarters | San Francisco, California |
| Number of countries | 220 |
| Number of employees | 6,811 |
| Revenue (2022) | $8.4 billion |
| Profit (2022) | $1.9 billion |
3. Airbnb SWOT Analysis 2022
3.1. Airbnb Strengths
3.1.1. Engaged community
Airbnb has highly engaged community. As per APQC, around 75% of the Airbnb hosts and guests rate each other when stay is over. The brand offers personalized experience and uses story telling technique to keep brand community engaged.
3.1.2. Innovation potential
American Innovation Index ranked Airbnb 1st in list of most innovative lodging companies, followed by Hyatt, Marriott, Hilton and Best Western.
3.1.3. Global network
Airbnb has a wide global network that is spread in more than 220 countries, and has homes in more than 100,000 cities.
3.1.4. Brand loyalty
Airbnb has high brand loyalty. It earned 19th rank among top brands for millennials, and earned net promoter score of 27 (52% promoters), as depicted in following graph:
Source: Comparably
3.1.5. Innovative business model
Another key strength of Airbnb is that it allows direct bookings. Hosts directly list their properties and interact with customers. This way, Airbnb avoids paying high fees to the travel agencies, and earns higher margin then competitors.
The business model is not only innovative, but proved to be resilient during pandemic:
Source: Statista
3.1.6. Strong branding
Through strong branding, Airbnb surpassed some big players in hospitality industry, as depicted in following graph:
Source: Business Insider
3.1.7. Unique travel experience
Airbnb offers unique experience as unlike hotels, Airbnb rents others’ house, or some interesting venues like cottages, tents or even treehouses. It makes experience unique that significantly differs from traditional hotel experience. Recent ratings suggest around 95% of customers gave 5-star ratings based on uniqueness of experience.
3.1.8. Cheaper alternative
Airbnb is cheaper than hotels. So, on average, people stay in Airbnb 2.4 times longer than hotels. Here is the price comparison of Airbnb and hotels:
Source: Business Traveler
3.1.9. Easy expansion
Airbnb has gone public, so it has become easier to generate funds, and expand operations around the globe. In 2019, Airbnb expanded its reach to market by introducing Airbnb adventures and Airbnb Luxe for adventurous and high-end travelers.
3.1.10. Strong competitive positioning
Airbnb holds strong competitive positioning, and earns higher rank than its competitors, including- Trip Advisor, Booking.com and Kayak.
Source: Comparably
3.1.11. Airbnb revenue streams
Airbnb revenue streams are multiple, which enable company in diversifying its business, and decrease the reliance on the rental booking revenue. Some recent examples are- Airbnb Work and Airbnb Experiences.
3.2. Airbnb Weaknesses
3.2.1. Low profitability
Airbnb is still struggling to increase its profitability. Initially, company suffered losses, and in 2022, for the first time, it made profit. The profitability still remains lower than its competitors:
Source: Macro-Trends
3.2.2. Easily imitable business model
Although, Airbnb business model is innovative, but can be easily imitated by competitors. Strong brand reputation somehow saves Airbnb from competitors who could replicate its business model.
3.2.3. Customer dissatisfaction
Customer dissatisfaction has emerged as a major issue for Airbnb. A research by Ding et al. (2021) analyzed 59,766 Airbnb customer reviews, and identified some common reasons behind dissatisfaction, including- property issues, unmatched descriptions, noise, refund and unpleasant experience of hosts.
3.2.4. Scams
Scams and frauds have become a serious issue for Airbnb. Many people list ‘fake properties’, and ask customers to pay inflated price by redirecting them to another site. Following graph presents a breakdown of the scams that Airbnb customers face:
Source: Remote Tribe
3.2.5. Discrimination
New York Times reported that many black travelers feel discriminated by hosts based on racial grounds. It is a key weakness that needs immediate attention of Airbnb management.
3.2.6. Last minute cancellations
Airbnb hosts have the discretion to cancel the reservation in last minute, which causes inconvenience to travelers.
3.2.7. Data transparency
As per Washington Post, despite efforts to improve transparency, customers still considers Airbnb’s pricing to be unclear. Airbnb is also accused of violating the user privacy, and for sharing data with third parties without consent.
3.2.8. Privacy concerns
Airbnb management has admitted that the company needs to improve data management practices. In 2020, company received severe criticism as hosts’ personally identifiable data was leaked due to internal issues.
3.3. Airbnb Opportunities
3.3.1. Luxury rentals
Strong rebound of luxury travel industry in post-pandemic world offers great growth opportunity to luxury rental industry. Airbnb can capture this trend by offering attractive luxury rental packages to its high-end customers.
3.3.2. Strategic partnerships
Airbnb may find more strategic partners to expand the presence at international stage, and enter in new product/market segments. As Airbnb is planning to diversify its services portfolio by adding features like tour guides, strategic partners can help in diversification through capital accumulation and risk sharing.
3.3.3. Seamless mobile experience
Technological advancement presents a great opportunity to the Airbnb. It can improve its mobile app by adding new features (like augmented and virtual reality). Airbnb may also offer seamless experience by allowing the guests to make reservations during travel.
3.3.4. New markets
Airbnb can penetrate deeper into Asian and African markets due to growing demand from leisure travelers. Brand can also launch more products for bleisure and business travelers in existing and new markets.
3.3.5. Urbanization trend
Growing urbanization trend (as depicted in following graph) around the globe can help company grow bigger because Airbnb is aiming to penetrate deeper into urban areas.
Source: Statista
3.3.6. Online influencers
More than 50% the millennials consider the online reviews and opinions of influencers while booking hotels. Airbnb can hire social media influencers to promote the brand and increase travelers’ booking intentions.
3.3.7. Growing price sensitivity
A recent survey showed around 70% of travelers consider price very important during leisure trip. Airbnb’s cheaper packages can attract the attention of these price sensitive customers.
Source: Statista
3.3.8. Remote work
After pandemic, the trend of remote work has stayed. Many remote workers may now travel more, and avail Airbnb services by benefiting from flexible remote work arrangements.
3.3.9. Rising home sharing trend
Home sharing trend is on rise (as depicted in following graph) as it offers economic advantages. This trend directly benefits the Airbnb and similar players.
Source: Statista
The rising home sharing trend has even captured the attention of big giants like Marriott that operate in traditional luxury hospitaliy industry. Click here to see how Marriott is capturing this trend (Marriott SWOT, point ‘diversification).
3.4. Airbnb Threats
3.4.1. Threat from existing competitors
The competition in the lodging industry is getting intense. Following graph shows the close competition between Airbnb and its competitors:
Source: Seeking Alpha
3.4.2. New entrant threat
The threat of new entrants like Home Away and Sonder is rising. Wall Street Journal considers Sonder as a potential competitor that can threaten the Airbnb’s leadership position by offering more attractive packages.
3.4.3. Threat from traditional hotels
Competition from traditional hotels is also getting intense. Many budget hotels have started offering concierge services. So, the emergence of such hotels is giving touch competition to Airbnb. Marriott presents a good example here. Recently, Marriott has started directly competing with Airbnb by offering concierge services. Click here to know how traditional luxury hotels like Marriott have also joined the rental market.
3.4.4. Uncertain regulatory environment
The regulatory environment that governs the sharing economy is highly uncertain and quickly changing. New regulations can make business environment more challenging for Airbnb and other market players.
3.4.5. Lawsuits
Risk of expensive and reputation damaging lawsuits is increasing as customers are becoming more aware of their rights. Airbnb is already facing multiple lawsuits. If unaddressed, such lawsuits can damage the company’s reputation.
Click here to see how poor knowledge of law can put even giant firms like Marriott in hot waters.
3.4.6. Safety threat
There is an inherent risk in Airbnb’s business model. The Time Magazine reported that many Airbnb buildings are not fully equipped with the safety equipment like fire extinguishers and smoke/carbon monoxide detectors.
4. SWOT Analysis Airbnb-Summary
Airbnb SWOT
| Airbnb strengths Engaged community Innovation potential Global network Brand loyalty Business model resilience Strong branding Unique experience Cheap prices Easy expansion Multiple revenue streams | Airbnb weaknesses Low profitability Imitable business model Customer dissatisfaction Scams and privacy concerns Discrimination Last minute cancellations Data transparency |
| Airbnb opportunities Luxury rentals Strategic partnerships Seamless mobile experience New markets Urbanization trend Online influencers Growing price sensitivity Remote work Rising home sharing trend | Airbnb threats Competitive threat (existing and new) Threat from traditional hotels Uncertain regulatory environment Lawsuits Safety threats |
5. Recommendations
Based on Airbnb SWOT analysis, the article proposes following recommendations:
• Address customer dissatisfaction by resolving the scams, discrimination and privacy issues
• Offer seamless mobile experience by improving its mobile app and allowing guests to make during travel reservations
• Hire online influencers to promote the brand and win customers’ trust
• Resolve safety threats by making sure buildings have necessary safety equipment
• Offer packages for luxury, high-end customers
• Find strategic partners to diversify portfolio
• Penetrate deeper into Asian and African region
6. Conclusion
Airbnb holds strong positioning in lodging industry. However, company is facing various threats, and has some weaknesses that seek management’s attention. Two most important strategic concerns include- low profitability and rising competitive threat from direct as well as indirect competitors like Marriott. Airbnb needs to address these concerns by leveraging its key strengths.
Airbnb is a leader in rental industry. You will find it interesting to read how Marriott-a global luxury hospitality leader is penetrating in rental industry, and is giving tough competition to Airbnb.
Have a look on Marriott marketing strategy. You may also want to read the Marriott SWOT analysis.
7. References
How Airbnb Builds Trust, Engagement, and Community Through Peer-to-Peer Ratings. (2016, May 27). APQC.
Richter, F. (2023d, March 9). Airbnb Bookings Climb Past Pre-Pandemic High in 2022. Statista Infographics.
Redirect Notice. (n.d.-d).
Uniqueness – Guest suites for Rent in Tauranga, Bay of Plenty, New Zealand. (n.d.). Airbnb.
Airbnb Net Income 2018-2022 | ABNB. (n.d.). MacroTrends.
Williams, A., & Williams, A. (2023, January 3). The Ultimate Guide to Spotting and Avoiding AirBnB Scams – 9 Most Common Issues. Remote Tribe – Digital Nomads and Remote Jobs.
Sampson, H., & Fagan, E. (2022, November 14). Airbnb is more successful than ever. Why is everyone so mad at it? Washington Post.
Statista. (2022c, August 5). Urbanization rate of the population worldwide, by regional development 1950-2050.
Statista. (2019, September 3). Importance of price to U.S. leisure travelers when choosing a hotel as of May 2017.
Statista. (2021b, September 6). Short-term rental home sharing users in the U.S. 2019-2023.
Cunningham, T. (2022, November 21). Airbnb: A Revolutionary Company Set To Outperform The Market. Seeking Alpha.
