Airbnb - a Failure of Corporate Communication

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AirBnB – Case background

AirBnB is a website that was founded in 2007 by Joe Gebbia, Brian Chesky, and Nathan Blecharczyk. AirBnB’s story begins in the living room of Joe and Brian's San Francisco loft in 2008. The name AirBnB stands for “Air bed and breakfast”. AirBnB is a community marketplace that allows property owners and travelers to connect with each other for the purpose of renting unique vacation spaces around the world. It is an alternative to a hotel giving the user a more fun, cheaper and local experience. AirBnB has everything from private homes to private islands in over 16,000 cities in 186 countries. It has rooms, couches, homes, islands, castles and an airplane sticking out of a tree. Famous people like Conan O'Brien rent out their homes as well. With 1,000 more new listings a day, a number likely to accelerate to 3,000/day as it expands in all the major tourist markets. AirBnB is expected to surpass Hilton (600,000) in number of rooms by 2012 with their current growth rate. AirBnB also offers a free iPhone and iPad application for booking accommodation on the run. With AirBnB's over a billion-dollar valuation already it is every entrepreneur’s dream of a perfect start-up.

Things seemed too good to be true for the San Francisco based company. The company was largely build on social media, since the users engaged with the page through Facebook and Twitter. AirBnB had a social crisis management issue in the summer of 2011, caused by a lack of corporate culture and values. AirBnB has become a classical example, showing the importance of social media in reputation management, especially in a crisis. AirBnB was caught off-guard by a social media storm after clients had their property vandalized. A member of AirBnB known as EJ posted on her blog about a bizarre and brutal destruction of her home by someone who rented her space through AirBnB. Her things were stolen, her identity documents photocopied and her apartment destroyed. After the ordeal, she contacted AirBnB, with some difficulty, to let them know what had happened. AirBnB did not have a situation like this before and they responded to EJ that they would not reimburse her for damages and they do not insure against losses. They are helping police track down the person who did this, but their help ends there.

What AirBnB did not know, was that EJ had her own blog (ejroundtheworld.blogspot.com). A late Wednesday night on the 29th of June 2011, EJ published a 10 page blog post about her experiences with AirBnB and the visitors she had in her apartment. Quoting EJ: “They smashed a hole through a locked closet door, and found the passport, cash, credit card and grandmother's jewelry I had hidden inside. They took my camera, my iPod, an old laptop, and my external backup drive filled with photos, journals... my entire life. They found my birth certificate and social security card, which I believe they photocopied - using the printer/copier I kindly left out for my guests’ use. They rifled through all my drawers, wore my shoes and clothes, and left my clothing crumpled up in a pile of wet, mildewing towels on the closet floor. They found my coupons for Bed Bath & Beyond and used the discount, along with my MasterCard, to shop online. Despite the heat wave, they used my fireplace and multiple Duraflame logs to reduce mounds of stuff (my stuff??) to ash – including, I believe, the missing set of guest sheets I left carefully folded for their comfort. Yet they were stupid and careless enough to leave the flue closed; dirty gray ash now covered every surface inside. They did weird stuff too: moving things around in a spooky, psychotic kind of way - creepy little things that I am still discovering as I dig through the wreckage - like cutting the tags off my pillows, and hanging a painting of Paris on the wall that I had never hung before... probably while wearing my now-missing Ugg boots and Roots cap.”

EJ was at first satisfied with the...
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