Airbnb: Tough Choices Growing a Platform Business

  • Reference: M-1370-E

  • Year: 2017

  • Number of pages: 16

  • Geographic Setting: Europa

  • Publication Date: Jun 19, 2019

  • Source: IESE (España)

  • Type of Document: Case

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The general manager for Airbnb for the EMEA region, Jeroen Merchiers is pondering about several growth alternatives for technology based platform that had recently disrupted the accommodation industry. Airbnb, the peer-to-peer tourist accommodation market place that was one of the most successful representatives of the so called "shared economy" had experienced tremendous growth since its inception in 2008. The spectacular growth was based, besides its first mover advantage, on the fact that the company knew how to foster the one key ingredient that allowed a peer-to-peer online business to thrive: trust. Jeroen´s main challenge was what recommendation to make specifically for the European region in order to sustain the enviable growth the region had experienced during his tenure. To that extent several initiatives were being considered to attract different segments of customers. The options included catering to business travellers, addressing the needs of more high-end travel segments beyond the usual budget-conscious traveller, and looking beyond the traditional city-break traveler to reach tourists seeking rural getaways or vacation rental properties. One last possibility was to focus the growth prospects on the substantial different business proposition of offering local experiences fur existing customers, a business that was traditionally highly fragmented. Since all growth options presented many challenges of implementation and different risk-reward combinations, in the back of Merchiers´ mind was how to prioritize growth opportunities while continuing to foster trust among platform participants and without compromising quality and service levels. Merchiers and Airbnb senior management had a lot to think about and no easy answers.


growth options Platform businesses Share economy