CASE STUDY 2 EXPLORING THE CHARACTERISTICS OF CUSTOMER SEGMENTATION: A CASE OF AIRBNB

Consumer segmentation involves categorising consumers into groups which are internally homogeneous but maximally different from other groups, assuming a heterogeneous overall market. This enables firms to target desirable market segments and then position their own product accordingly. In the tourism industry consumer segmentation focuses on determining travellers motivations, destination choice, or their choice of accommodation. Next to hotels, consumer segmentation within alternative forms of travel accommodation has also gained importance in recent years. A dominant alternative form of travel accommodation is Airbnb. Airbnb was founded in 2007 when two hosts welcomed three guests to their San Francisco home and has since grown to 4 million hosts who have welcomed more than 1 billion guest arrivals in almost every country across the globe. Every day, hosts offer unique stays and one-of-a-kind activities that make it possible for guests to experience the world in a more authentic, connected way. Two years since the pandemic began, a new world of travel has emerged. Millions of people are now more flexible about where they live and work. As a result, theyre spreading out to thousands of towns and cities, staying for weeks, months, or even entire seasons at a time. Through Airbnbs adaptability and relentless innovation, it has been able to quickly respond to this changing world of travel. Now, two years into the pandemic, Airbnb is substantially stronger than ever before reporting a revenue of $1.5 billion in Q1 2022 an increase of 80% from Q1 2019, and 70% from Q1 2021. 2 Airbnb has uncovered a segment of leisure travellers that is not served by conventional hotel firms.

Describe and discuss this segment based on any THREE of the characteristics of effective segmentation discussed in Week 8s Lecture: Identifiable, Substantial, Accessible, Stable, Differentiable and Actionable.

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