Primary problems
The most urgent problem that the company is experiencing is the dependence of the popularity of the service on the events encouraging people to use it. The owners of the business have realized that they could not achieve enough most-event momentum to keep the company in business.
Besides, the inventory that the company generated to every event retained little value after the end of the event. In fact, every event plays a role of the artificial driver of demand, and as soon as it is over, the demand falls dramatically.
Another problem is the absence of rigorous rules for posting the accommodations to the website. In other words, the hosts do not have any strict plan to follow while putting their accommodations on the list of offers on the website. Besides, the hosts can put the price for the offering relying on their subjective determination of value, as the website does not have any determiners of the price relevant to different types of services.
Insights from the Case and Potential Decisions
The potential decisions that can save the company must rely on the gained experience, which helps to identify the obstacles to the development of the company. The strategy of attracting many clients during important events appears to have disadvantages. After the Democratic National Convention, the owners of the company realized that the amount of inventory created during the event had very little value after its finishing, as Denver could not attract many visitors.
This situation is a bright example of ineffective decisions that prevent the company from achieving success. Another conclusion about the factors essential for ensuring the development of the company comes from the negative experience of allowing the hosts to post the offers without any system of controlling the process. The owners have already realized that they could lose potential revenue through underpriced listings or lose potential customers because of the inflated rates.
Potential courses of actions
Potential actions that can save the company from failure include attracting clients interested in services, which are not related to certain events. Therefore, the development of new services for tourists can bring good results. As tourism does not depend on any event and takes place during the whole year, the demand for advantageous housing offers for tourists is constant and stable. The owners of the company should view tourists as the main target clients able to provide constant profit.
It appears to be a good solution for the company to establish good cooperation with various touristic companies around the country. Such strategy will bring more clients searching for places for overnight rest and help to keep the number of the services growing. The drawbacks of the process of posting the offers to the website can be overcome by applying strict rules and developing a specific algorithm for checking each offer for sufficiency.
Hiring a team of specialists responsible for providing supervision of this process can be a good way of improving the company’s reputation and ensuring the quality of services. The specialists should double-check photos, descriptions, and pricing. Such strategy will help to ensure the efficacy of the website and the services it offers.
The analysis of the primary problems Airbnb is experiencing demonstrates that company has a good potential for achieving success if it provides necessary improvements of the services.