Question

Airbnb

describe what is Airbnb company
how they are working
what is their scope in UNITED ARAB EMIRATES
what is their profitability in U.A.E

Answer 1

Airbnb is an online marketplace for arranging or offering lodging, primarily homestays, or tourism experiences. The company does not own any of the real estate listings, nor does it host events; it acts as a broker, receiving commissions from each booking. The company is based in San Francisco, California, United States.

The company was conceived after its founders put an air mattress in their living room, effectively turning their apartment into a bed and breakfast, in order to offset the high cost of rent in San Francisco; Airbnb is a shortened version of its original name, AirBedandBreakfast.com.

How does it work?

• Peer-to-peer accommodation made possible by the exploitation of Web 2.0 internet technologies.
• To book or rent out a space, one must have an Airbnb profile.
• Hosts and guests can chat and ask questions to each other.
• Hosts have the possibility to accept or deny a reservation.
• Trust between hosts and guests and online reputation is fostered through a system based on reviews, recommendations and ratings.
• The system gives an incentive to both parties to behave in an acceptable manner.
• Payments are made through the website and Airbnb earns revenues for the service offered.

Scope in UNITED ARAB EMIRATES

United Arab Emirates (UAE) is known for its luxury hotels and incomparable hospitality. However, Airbnb is also expected to grow steadily in UAE. The Emirate has a relatively young population with the increased demand for affordable hotels, Airbnb is getting good acceptance and demand is expected to grow.

Profitability in U.A.E

The major driving sector of the UAE economy is a Travel and tourism—or more precisely Dubai. It is a central pillar. Dubai is the 4th most visited city in the world after London, Paris, and Bangkok. According to the Dubai's Department of Tourism and Commerce Marketing, there were a total of 13.2 million international overnight visitors in 2018. According to Business Monitor International forecast, 7.6% are the forecasted year-on-year in tourist arrivals and 9.3% increase in tourism receipts for UAE. According to the World Economic Forum study, UAE was the most tourist-friendly country in the Middle East followed by Qatar, Bahrain, Morocco and Saudi Arabia. Hence there is the huge demand for a stay in UAE. Airbnb is very positive about the UAE market potential. Airbnb followed two-sided business models. Airbnb allowed guests to book unique places, customize searches by price, room type, size, different experience, amenities, property type, host language, etc. It offered personalized service to both guests and hosts at various price ranges. It enabled property owners to make extra money on the side and it is reliable and safe. It also provided insurance to listed properties.

According to Vartika Goel, Country Head - UAE, Oyo Hotels: “There is significant market opportunity especially as people have invested in second homes in top holiday destinations across the UAE. Gulf and international travellers today are open to choosing the comforts of a fully managed holiday home for short-stays.