Technology of the Week Team 15: Priceline.com versus Airbnb


Want to go on holiday? Instead of visiting an archaic travel agency (80/90s style), consider diving into an online auction where you might bargain your way into a luxurious 5-star hotel in Manhattan, New York City. Or stay at someones mansion in Kenya and take care of the giraffes in the backyard.

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The former, Priceline.com applies a B2C business model offering exclusive hotels to offer up their otherwise vacant rooms on an anonymous basis, whilst the latter applies a C2C business (or, collaborative consumption – Botsman & Rogers, 2010) model offering consumer a means to earn some additional income whilst away from home themselves.

The anonymous feature of Priceline.com implies a higher level of uncertainty than normal for consumers in exchange for a lower price, i.e. the option to trade down, whilst still being relatively certain preferences (location, star-rating etc.) are fulfilled. Also, organisational learning is applied. Airbnb basically offers all available information, including house rules set by the host, reviews of hosts about guests and vice versa (word-of-mouth). Prices are fixed but fellow consumers can find something fitting their preferences in detail. A simple comparison: Priceline.com uses the information provided by consumers to search their database and find the consumer a match to bid on; Airbnb uses the information provided by consumers to offer a complete list of potentials where even more lodge-specific information can be found and allows the consumer to make up his/her own mind. However, both businesses aim to offer a solution to properties that would otherwise be vacant and have disrupted the hospitality-industry, offering consumers increasingly more options to choose from. In other words, the buying power of consumers has increased.

So, how would you book your holiday?

 

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