Smart Co

ANDREI ASCHILEAN, NATHAN EHRLICH, DANIEL KREMSNER, SIMON WENEDELIN

Agenda
Introductions, Highlights & Background
Industry Forces
Market Analysis
Key Industry Success Factors
Growth Opportunities
Core & Distinctive Competencies
Issues & Concerns
Potential Directions
Recommendations

Highlights
In business for 8 years with continuous growth and expansion
Went from operating in just the United States to operating in

34,000 cities in 191 countries with more than 2,5 million listings
Current annual revenues close to $ 1 billion (2015)
2000+ employees
Valuation of $ 30 billion
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https://www.youtube.com/watch?v=1AtjOKph7-k

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Competitive Forces

Threat of new entrants

Moderate entry barriers for

peer to peer
Brand recognition

Supplier bargaining
power

Competitive
Rivalry

Low bargaining power

Can only choose other
peer to peer platforms
with lower name
recognition

Low to moderate for

peer to peer platforms
Low for hotels

Threat of substitutes

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Hotels
Motels
Other peer to peer online
platforms

Customer bargaining
power

Choose a different peer to

peer platform
Choose a hotel/motel

Direct Peer to Peer Competition

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Homeaway Introduction
Founded in 2005 in Austin, Texas
Operates in 190 countries
More than 1500 Employees
Revenues of $ 446 million in 2014
Source: https://www.homeaway.at/

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Homeaway SWOT analysis

Threats
Unattractive because of higher
prices

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Opportunities
Attract more offerings due to
different payment options for hosts

Strengths

Weaknesses

Guests may pay damage protection

or cancellation protection VS a fixed
fee of 6 to 12% at AirBnB
Subsidiary of Expidia Inc.
Access to a large amount of capital

High host fees 349 to 999 USD

yearly fee OR 10 to 13% fee per
booking VS AirBnB has a 3% fee

WIMDU Introduction
Founded in Germany in 2011
Operates in 150 countries
240 employees
$ 13.6 million in revenues in 2014

Source: http://www.wimdu.com/

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WIMDU SWOT analysis

Threats
Due to higher fees than AirBnB
customers might go to AirBnB and
stop booking at Wimdu

Strengths
Customers are covered with
100% fee insurance policy

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Opportunities
Steal Airbnb market share

Weaknesses
Guest fee of 12% flat VS 6-12% at
AirBnB
Less brand recognition than
AirBnB
Rental properties are insured up
to 500.000 VS AirBnB insures up
to 1 million

PESTLE analysis

Political
Economic
Socio Cultural
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Different tax regulations

Lack of regulation in a shared economy
Governmental protection of local hospitality establishments
Established chains recognizing AirBnb as a threat
Easy to duplicate business model
More pricing and accommodation options
Represents new life style trends dont go there, live there
Potentially poor hosts and guests
Media highlighting negative aspects of the business model

(airbnbhell.com)

PESTLE analysis

Technological

Easy booking via online platforms and apps

Efficient data collection due to online tracking
Personalized advertising
Conflicts between housing laws and regulations

Legal

Health and safety laws

Consumer protection of fraud
Tourism taxes
Maximize housing/apartment usage

Ecological
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Sharing economy
Advocating responsible consumption

Key Success Factors

Location one of the most important success factors
Global Outlook access to new and growing markets (increasing middle class in

China and India)

Quality Management respectable and reputable hosts
Flexibility adapt business model according to changing markets and demands
Pricing sustainable yield management

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Core competencies
Provides a platform to connect hosts and potential guests
Marketing and public relations
Large range of accomodations (flats, treehouses, castles, houses)
Location availability
Provides standardized procedures for hosts and guests
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Distinctive competencies
74% of listings are outside of main hotel districts
The brand name in the peer to peer accomodation

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SWOT analysis AirBnB

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Threats

Opportunities

Substitute products
Unexpected technical problems
Legal issues
Poor hosts and guests
Tourism taxes

New countries/cities
Income level at a constant increase
Local cities partnering

Strengths

Weaknesses

Innovative culture
High and speed growth rate
Unique offering
Core focus on hospitality

Online presence only

One apartment on multiple
platforms
Bad PR (Reviews)
Dependent on host quality

Pressing issues
Peer to peer rentals can drive up local real estate prices (San

Francisco)
Tourism taxes
Settle lawsuits in major market areas (Barcelona, NY, San Francisco,
Berlin)
Combating the growth of other peer to peer booking platforms

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Hospitality industry strategy clock

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Hybrid positioning
high perceived value

low price

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high price

low perceived value

Horizontal and vertical integration

Possible mergers and acquisitions (Homeaway and WIMDU)

(horizontal)
AirBnbs own cleaning service (vertical)
Deals on activites and services added to the reservation(vertical)
Cooperation with Uber

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Strategic directions/Value Innovations

Organic development (current strategy)
Mergers and acquisitions of direct competitors (Homeaway and

WIMDU)
Come up with ways to attract older customers
Focus on the entire travel experience
Strategic alliances / Joint ventures (Audi, Tripadvisor, Uber,
Expedia, etc.)

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Option 1: Further Organic Growth

Knowledge & learning
Strategic independence
Spreading investment over time

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Option 2A: IPO

Current evaluation of $30 billion

Issue 25% common stock ($7.5 billion)
Creates tangible market value

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Option 2B: Acquisitions

Homeaway (worth ~$4.2 billion)

Wimdu (worth ~$1.3 billion)

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Option 3:

Joint Venture / Strategic Alliances

Expedia ($18.6 billion market cap)

Uber (connect websites; create shared packages)
Audi (product placement)

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Strategic Alliance

https://www.youtube.com/watch?v=M1jM9gTkrOI

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All pictures taken from Google image search or Airbnb company website!