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Case 1 airbnb, inc in 2017 mcgraw hill education connect How would you illustrate and compare...

Case 1 airbnb, inc in 2017 mcgraw hill education connect

How would you illustrate and compare the business models for Airbnb, large hotels chains such as Marriott and Hilton, and bed & breakfast operators?

Select “true” for those statements that are accurate and choose “false” for those that are not.

  1. Airbnb has a unique customer value proposition in its use of technology, shorter, more intimate stays, varying and different locales, and cheaper and unique accommodations.
      (Click to select)   True   False  
  2. A chain hotel/motel’s customer value proposition is similar to that of Airbnb by its use of technology, unique accommodations, and varying prices.  
      (Click to select)   True   False  
  3. A bed & breakfast’s profit formula is based on renting rooms and overall occupancy, the cost structure associated with operating brick and mortar locations, and possibly wages if it is large enough to need staff.
      (Click to select)   True   False  
  4. Airbnb’s profit formula is based on transaction fees charged to users, the cost structure associated with developing and updating software and technology, marketing, and wages for engineers, professional management, and staff.
      (Click to select)   True   False  
  5. A bed & breakfast is owned by a sole proprietor; their profit margin is not impacted if they do not rent rooms or have overall occupancy.
      (Click to select)   True   False  
  6. Chain hotels/motels’ profit margin is dependent on generating sufficient revenues across multiple locations to cover fixed and variable costs globally. Profitable locations may be used to offset losses in unprofitable locations.
      (Click to select)   True   False  
  7. Airbnb’s profit margin is contingent upon the fixed costs associated with operating hotels and bed & breakfasts.
      (Click to select)   True   False  
  8. A bed & breakfast’s profit margin is dependent on generating revenues sufficient to cover fixed and variable costs.
      (Click to select)   True   False

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Solutions

Expert Solution

1. Airbnb has a unique customer value proposition in its use of technology, shorter, more intimate stays, varying and different locales, and cheaper and unique accommodations. - True

2. A chain hotel/motel’s customer value proposition is similar to that of Airbnb by its use of technology, unique accommodations, and varying prices. - False

3. A bed & breakfast’s profit formula is based on renting rooms and overall occupancy, the cost structure associated with operating brick and mortar locations, and possibly wages if it is large enough to need staff. -True

4. Airbnb’s profit formula is based on transaction fees charged to users, the cost structure associated with developing and updating software and technology, marketing, and wages for engineers, professional management, and staff. -True

5. bed & breakfast is owned by a sole proprietor; their profit margin is not impacted if they do not rent rooms or have overall occupancy. - False

6. Chain hotels/motels’ profit margin is dependent on generating sufficient revenues across multiple locations to cover fixed and variable costs globally. Profitable locations may be used to offset losses in unprofitable locations. - True

7. Airbnb’s profit margin is contingent upon the fixed costs associated with operating hotels and bed & breakfasts - False

8. A bed & breakfast’s profit margin is dependent on generating revenues sufficient to cover fixed and variable costs. - True


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