How much is your Spare Room Worth?E - Commerce

Group 9: Faruk Hasic | Ananya Jain

http://nextjuggernaut.com/blog/airbnb-business-model-canvas-how-airbnb-works-revenue-insights/

: Business Model

Every one of the million-plus listings on our site is unique, having its own address, size, and decor. Our hosts also vary in their willingness to play concierge, cook, or tour guide

: Initial pricing issue

…..unlike

1. Price-setting algorithms

2. Price tips

: Pricing mechanism faced trouble

1. Interact with users

2. Adjust to demand

: Solution seeked

: Situations

: Aerosolve

: The tool

Bases a price tip from the median

Factors in Demand

and seasonalit

y

Finds the ones which

have been successfully booked

Looks at listings

with similar attribut

es in similar areas

System attracts

key attributes of that listing

Host adds a space

Figuring out the key attributes themselves

: The tricky part…

: SOLUTIONSI

MIL

ARIT

Y

RECE

NCY

LOCA

TIONLooked up

highly quantifiable common attributes for which the client will pay

Travel market is dynamic and seasonal.

Listings in almost the entire city, so detailed micro-neighborhoods

: Another FLAW - corrected

FLAW: Expanding circle around a listing, considering similar properties at varying radii from the listing location CORRECTED:Map the boundaries of neighborhoods: extremely accurate and relevant geospatial definitions to cluster listings around major geographical and structural listings.

: Remaining weaknesses

1. Static pricing tips

2. Tool itself is static

: Recent improvements

1. Each host gets new pricing tip every day for each available data in the future

2. A lot of historical data, requires a lot of computing resources

3. Allow easy interpretation and in some cases influences the thought process

: Machine learning model

How much is your Spare Room Worth?E - Commerce

Group 9: Faruk Hasic | Ananya Jain