Posts

Showing posts from February, 2018

Airbnb's new branding strategy: The debut of Airbnb Plus and Beyond by Airbnb

Image
Last week, Airbnb made an important move to help the company step up in the competition against hotel chains and online travel agents — the debut of two branded products. I expect Airbnb's new branding strategy will change the competition landscape in the market even though I was not surprised at this news at all, as suggested in last month's discussion. The debut of two new brands As a milestone of Airbnb's 10th anniversary, the company is introducing two new brands — Airbnb Plus and Beyond by Airbnb. According to The New York Times, the company is debuting the Airbnb Plus brand with more than 2,000 homes in 13 cities around the globe, with an expectation of having more than 75,000 homes in 50-plus locations under this brand by the end of this year. Airbnb Plus To be qualified as an Airbnb Plus home, a property must meet the 100-point quality checklist set by Airbnb. Some important features of this brand include: Hosts with a 4.8-plus rating (out of 5), who know how to creat…

Is dynamic pricing good for restaurants and hotels?

Image
According to the theories in classical economics, an equilibrium price of a product will be reached in a free market when supplies meet demands. When supplies remain stable, an increase in demands will result in a higher selling price for the product. Restaurants and hotels offer service products that are perishable in nature (e.g., restaurant seats and hotel rooms), where supplies cannot be easily adjusted according to the fluctuating demands, so managers often manipulate price as a means to maximize revenue. When managers deviate a product's selling price from its "regular" price as they respond to fluctuating demands, we may say that these managers adopt a dynamic pricing strategy. Dynamic pricing in restaurants Traditionally, restaurants may charge a lower-than-usual price for selected items in a promotion or during happy hour. They may also charge a higher-than-usual price for selected items in a special occasion or a holiday, such as a prix-fixe menu on Valentine…

Hotel mergers and acquisitions: Which hotel chain will be the next?

Image
In mid-January, Wyndham announced that it would purchase La Quinta’s franchise and management business for $1.95 billion. Currently, Wyndham Worldwide operates more than 8,100 hotels in 79 countries, with a total room inventory of more than 705,700 rooms. The company’s portfolio includes 19 brands, ranging from the economy segment, such as Super 8 and Days Inn, to the upscale and luxury segments, such as Wyndham Grand and Esplendor Boutique Hotels. Wyndham’s award-winning reward program has 53 million members. La Quinta Holdings Inc., the franchise and management business of La Quinta, runs more than 880 properties in 48 states in the U.S., Canada, Mexico, and Honduras. The brand focuses on midscale and upper-midscale segments, with about 87,500 rooms. La Quinta’s frequent traveler program has 13 million members. Wyndham’s acquisition will help the company strengthen its performance and market share in the midscale and upper-midscale segments. Wyndham will become another giant hotel cha…