From creating new value to disrupting existing businesses, the rise of the sharing economy has had a major impact on the hospitality and transportation industries. Built on the concept of exchanging goods via an online marketplace, the sharing economy allows individuals to seamlessly move between acting as buyers and sellers. Emerging companies such as Uber and Airbnb have been winners in this sharing model, creating uncertainty for traditional incumbents such as taxis and hotels. Yet their success hasn't been without challenges, particularly when it comes to navigating the nuances of local markets. Airbnb, an online and user-friendly platform that allows “hosts” to list their homes as a destination, was founded in 2008 with the intention of connecting people to unique travel experiences at any price point. Within three years it had reached 1 million bookings, prompting CEO Brian Chesky to more seriously consider opportunity outside of the United States. One of his initial targets was Paris, and the company slowly began scaling operations within the City of Light. 

Initially though, Airbnb encountered several significant barriers with Parisian housing regulations. Hotel groups and local authorities launched a series of oppositions against the company, voicing concerns about Airbnb’s impact on the local economy and the number of long-term housing options in the city. Specifically, in a city already prevalent with tourists, activists feared that allowing Airbnb to expand without any restrictions would drive permanent residents away, thus completely transforming quintessential parts of the city. 

To help alleviate these apprehensions, Airbnb decided to open an office in Paris in 2012. Listings were starting to increase at a rapid pace, and the company knew its continued presence in the region was contingent upon building more positive in-person relationships with regulators. In making inroads, Airbnb focused on educating the French government on one of the key benefits it brings to the table— an influx of travelers (and more revenues) to the city,.....

 

Questions: 

1. Should Airbnb replicate its Paris strategy in other major European markets? Why and why not? 

2. How should Airbnb prepare to manage the emerging cultural trends listed in the chapter? How should Brazil’s cultural values influence its strategy in this country?