Airbnb Marketing Strategy Essay

Airbnb. founded during the economic downswing of 2008. is one of many advanced concerns runing within the turning shared economic system. Airbnb offers an option to the traditional hotel concern and allows belongings proprietors. termed “hosts. ” to publicize and lease their excess infinite. be it a trim room. flat or treehouse. “Guests” hunt through the Airbnb web site. read reappraisals and connect with hosts to happen less conventional and. frequently more. low-cost housing. Key to Airbnb’s concern success is set uping a model of trust on which both hosts and invitees can trust. a system Airbnb has developed through a strong selling scheme and through specific patterns that support host and invitee throughout the rental procedure. Building this model of trust in the system is a focal point non merely for Airbnb. but is besides typical of a company operating in the new sharing economic system.

The sharing economic system is a new economic chance for clients to entree goods whenever they are required at that minute – with entree trumping ownership. For illustration. if a individual merely uses a auto one time a month. they could lease a auto from a sharing economic system company like ZipCar alternatively of paying a monthly auto payment for a auto they hardly use. Following the economic recession. many Americans have become less uneconomical in utilizing their economic resources. In add-on. more Americans are showing an involvement in being more socially witting of green enterprises and other societal duties ( Neilson ) . These tendencies have resulted in a new focal point on shared resources. Beyond merely the economic benefits. good will and community edifice are of import drivers of the sharing economic system. Today. people who feel the load of the current economic period may prefer to lease or sell to their equals alternatively of giving their concern to major corporations.

Furthermore. the Consumer-to-Consumer ( C2C ) concern theoretical account is leting many persons to work their ain resources to derive extra income without the high startup costs and long-run committedness for concern sustainability. Although the thought of sharing is an old thought. the ability for sharing to bring forth net income is comparatively new. The sharing economic system is greatly influenced by on-line commercialism and societal media. Online commercialism has made it easier for equals to portion their goods and services with one another utilizing trusted funding services through web sites such as PayPal. Social media has helped distribute the economic and personal benefits of the sharing economic system and has served as the cardinal selling tool for the growing of infinite collaborative ingestion companies. Companies working chiefly in the sharing economic system systematically urge their users to portion their experiences via Facebook. Twitter and other societal webs. These societal platforms have become so incorporate in web minutess that one time a client has confirmed or paid. they are prompted to instantly post their money-saving or moneymaking success straight to their societal media page of pick.

Besides referred to as collaborative ingestion. the societal economic system follows the thought that people will foremost utilize what they have. borrow. barter. do and thrift points before they really buy something trade name new ( Anderson ) . The sellers of these sharing economic system companies chiefly target a few sections but are invariably spread outing. Urban countries and members of the X and Y Generations are cardinal demographics for the sharing economic system. Demographically. the bulk of sharing economic system companies will aim Generation Y due to their concern for environmental and societal issues that influence their determination to salvage and recycle resources ( Kotler. Philip. and Kevin Lane Keller. Chapter 8 ) . Statistics show that the newest coevals of grownups bargains fewer houses and fewer autos than its predecessors ( Ciccone ) . Furthermore. Generation Y is attracted to unconventional patterns such as the sharing economic system and is extremely societal. able to distribute the word.

Generation X is more likely to be those who are leasing out their goods and services. As Generation X has more duties. they enjoy the excess income that helps them finance their duties. such as kids and paying a mortgage. Peoples are join forcesing informally in their communities out of both necessity and as a lifestyle pick. A sharing economic system company should concentrate on stigmatization. networking and experience to guarantee its success ( Olson ) . Branding is cardinal because sharing economic system companies want consumers to hold assurance in their trade name. The sharing economic system is at an advantage. being comparatively new with a market that is interconnected through on-line commercialism and societal media.

Outside of distributing the work. a sense of community is built within the web. Finally. a sharing economic system company has to concentrate on client experience. Customers are looking for easiness of usage and merchandise value. When these desires are met. consumers will return to utilize the service every bit good as recommend it to others. One really successful illustration of a company with the sharing economic system using these factors is Airbnb. who in less than a decennary has built a major rival to the centuries old hotel industry.


Brian Chesky and Joe Gebbia founded Airbnb in San Francisco. when they began leasing out airbeds in their flat to people go toing a local conference to bring forth extra income in 2008. The early concern theoretical account for Airbedandbreakfast. com. subsequently renamed Airbnb. focused on big conferences such as the Democratic and Republican Conventions. which created hustling concern in the 2008 election twelvemonth. In 2009 the laminitiss. now including Gebbia’s former roomie and tech ace Nathan Blecharczyk. received $ 600. 000 in seed support from Sequoia Capital. In that same twelvemonth. admiting that leasing to finish aliens made many people uncomfortable. Chesky and Gebbia flew to New York City. place to many of their users. to run into with hosts in individual and study for possible betterments.

This was an unusual scheme for an internet company but it subsequently proved to be profitable. Over the following two old ages. Airbnb made several cardinal strategic alterations that gave it way and force in the market place. Of peculiar note was the constitution of Airbnb’s broker’s payment theoretical account and the determination to convey in professionals to snap host places. By the terminal of 2011. Airbnb had gone international and reached critical mass ( Geron ) . Forbes estimates that Airbnb probably lost money in 2012 in favour of speed uping growing. a hit the company could defy due to the inflow of capital from assorted Silicon Valley venture capital houses ( Geron ) . Their market incursion is relatively strong. harmonizing to Tech Crunch. with Airbnb’s booking expected to hold surpassed that of Hilton in 2012 ( Empson ) . and hosts leasing to an estimated 2. 5 million people harmonizing to the Economist ( “All eyes on the sharing economy” ) .

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The Wall Street Journal valued Airbnb at $ 2. 5 billion in October 2012. and Privco projected their grosss for that twelvemonth to be at $ 180 million ( Melby ) . In exchange for client support. website care and assorted insurance and security characteristics. Airbnb employs a broker-style payment theoretical account. taking a part of the rental monetary value between 6 % and 12 % from the invitee. depending on the belongings monetary value. and a 3 % service fee from the host ( Geron ) . Airbnb has come into its ain financially. while still keeping an individuality that. though non particularly anti-corporate. is surely fresh. immature and advanced. From the company logo. with its large. curly inscription and informal design. to its accent on direct interaction with possible users. Airbnb has built its trade name for the coevals inspired by invention.

The slogan “travel like a human” emphasizes the difference between the traditional. impersonal. corporate travel experience and the chance Airbnb presents to users to construct their personal webs with hosts in far off topographic points. at a lower cost. As is possibly to be expected with an cyberspace company. Airbnb relies to a great extent on societal media to make and perpetuate its trade name individuality. A cardinal facet of the company trade name is the travel experience. They post a “traveler of the week” on their Facebook. Twitter and Google Plus pages. and late concluded a exposure competition utilizing Instagram. with Airbnb travel credits as the award. While the pick of award may be a spot timeserving. the synergistic construct to utilize the mainstream photo-sharing app. and the wages both fit good with the Airbnb trade name and kept the focal point on travel instead than net income motivation. Naturally. travelers’ web log stations that mention Airbnb. whether they focus on the company or merely advert it in go throughing. are frequently promoted through “re-tweets” and stations on the Airbnb web log.

The experience of travel is merely one aspect of a company individuality that is as carefully all-around and appealing as its users. Airbnb besides emphasizes its involvement in the popular local motion with its “Living Local” shows. a portion of its “AirTV” series. Each online episode features a circuit of a alone Airbnb host belongings. and interviews with the by and large personable host or hosts. Beyond that. Airbnb is cognizant of the entreaty of its alone and tech-centric concern theoretical account to technology and tech swots. The company provides content providing straight to this audience through its specific technology web log – swots. Airbnb. com – and its Tech Talk YouTube series. where immature tech partisans present on advanced new engineerings and how they can and are being harnessed to construct concerns ( YouTube ) . These pictures. by and large around an hr in length. supply an in-depth reappraisal of current technological and concern inventions.

Airbnb besides uses societal media to tie in itself with other organisations. non unlike cross stigmatization. which establishes Airbnb as culturally present and economically advanced while besides extinguishing the costs of a major advertisement run. Their Facebook page. for illustration. lists SXSW. TED. Virgin America. Lonely Planet and Business Punk as organisations that Airbnb “Likes. ” Each of these associations strengthens their trade name – Virgin America connects them to another nontraditional travel company and to Virgin’s rebel CEO. Richard Branson. whose entreaty to immature professionals has made him by far the most followed “Influencer” on professional societal media site LinkedIn ( “LinkedIn Today: Top heads. large ideas” ) .

Similarly. their public association with SXSW reveals a cultural affinity in line with that of their patronage. and maps in tandem with the demand for lodging during the festival. to which Airbnb has dedicated a specific subdivision of their site. Through these attempts. the company has branded itself as immature. advanced and culturally and technically savvy-all traits that exist outside of its travel-focused gross watercourse. but which are inherently appealing to the patronage. both hosts and invitees. on which Airbnb relies.


Airbnb’s concern theoretical account focuses on consumer-to-consumer ( C2C ) minutess based on trust. Its theoretical account is similar to the popular C2C market place of eBay where purchasers and Sellerss engage in minutess that are each evaluated by persons for their degree of hazard on the footing of elaborate profiles. history. merchandise. monetary value and other resources. However for Airbnb. the comparative degree of investing for invitees and hosts is significantly higher on a per dealing footing. Travelers are put on the lining their holiday experience. safety and in most instances. a comparatively higher dollar value than a individual merchandise purchase. Hosts are offering their places. their personal privateness and their ain safety. every bit good as their life experience for the clip that their topographic point is secured by a invitee. With these personal investings in head. the success of Airbnb’s ability to transfuse assurance. trust and safety throughout their web was critical to the success of the company.

Airbnb’s roadmap to construct safety and security for their tenants includes a private messaging system that allows users to larn about each other anterior to booking while keeping private information to be disclosed at a ulterior clip. Another system is Airbnb’s “verified ID” badge where users will register their societal webs such as LinkedIn. Facebook. Airbnb reappraisals and official certification from their exposure ID and/or passport. With the confirmation of all of these resources fiting up. those users will have a “Verified ID” badge with their history information showing to other users that their designation has been vetted. In April of 2013. Airbnb began indiscriminately choosing users to finish this profile and expect to hold this expanded worldwide for all Airbnb members in the close hereafter.

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Over the last two old ages. Airbnb has made attempts to increase their resources to spread out security and prolong the trust in the market place by duplicating the size of their client support staff with 24×7 support. making a dedicated Trust & A ; Safety section and designing tools to verify user profiles and easing richer communications between invitees and hosts prior to booking. With these basic characteristics. the serviceability. consistence and handiness to hosts and the Airbnb support squad continue to be critical features to Airbnb’s service roadmap. Although. when travellers are “shopping” they besides have the duty of maximising their usage of these tools and take attention in measuring their ain dealing hazard by perusing host profiles. reappraisals. societal webs and even linking with their host on a regular footing.


Hosts are merely every bit much Airbnb’s clients as invitees so while they must animate invitees to remain in an individual’s abode. Airbnb must at the same time animate trust and assurance in the Airbnb theoretical account for hosts. Airbnb’s actions and interactions with hosts and possible hosts are meant to project an image of control. assurance and community for the host. with a peculiar focal point on making so administratively. financially and socially. To simplify and centralise the hosting procedure. Airbnb manages all the administrative maps of going a host. which provides a support system and protection for the host and his or her belongings. Rather than holding hosts build a new web site for their lease. the site is already created ( in multiple linguistic communications and currencies ) and all he or she must make to acquire started is make a profile. Airbnb has a free client service squad to assist first-time hosts understand the procedure. While Airbnb makes it clear on their web site that understanding revenue enhancement and legal position for hosts is the duty of the host. Airbnb provides mention paperss and replies to common inquiries on their web site.

Although Airbnb maintains the site architecture. hosts are in complete control over the rental monetary value. comfortss and house regulations. Airbnb in some instances will even offer free professional picture taking for host belongingss. A unafraid on-line payment system is built into the web site to vouch complete. on-time payment straight to the host ( “Why Host” ) . Hosts are basically leting a alien into their place ( or boat. treehouse. etc. ) so a sense of control is cardinal for their assurance in this theoretical account. To make so. Airbnb creates systems to offer protection to hosts’ individuals and belongings. Hosts have entire control over who rents their listing. A possible invitee puts in a reserve petition through the online system and so the host has 24 hours to accept or worsen the petition. During this clip the host and possible invitee can pass on through the web site communications system and cite the aforesaid “verified ID” system. However. the rental reference is non given out until the proprietor accepts the invitee and hosts besides have entree to the 24-hour client service hotline ( “Trust” ) .

Since most hosts are leasing primary abodes or suites. protecting against possible harm is much more of import than if this was a hotel or concern. While normal renters’ or homeowners’ insurance is the duty of the host. in 2011 Airbnb launched its “Host Guarantee” belongings protection plan. In May 2012. it took insurance underwritten by Lloyd’s of London to widen the Host Guarantee to up to $ 1 million in belongings amendss. This covers guest amendss beyond the range of “reasonable wear and tear” in 23 states. No extra cost or actions are required for the host to hold this protection ( “Guarantee” ) . The fiscal inducement is a cardinal ground people become hosts. In a study of members of Airbnb in San Francisco in November 2012. over 90 % of hosts rented their primary abodes to visitants and spent about half the income they made on life disbursals ( Lawler ) . To promote more people to go hosts and to back up bing hosts. Airbnb besides focuses on easing the fiscal facets of leasing. First. it is free to make a listing utilizing Airbnb.

For on-line payments. the guest submits payment and one time the reserve is accepted Airbnb procedures and collects the payment in full. Airbnb holds the payment until 24 hours after check-in ( and after the guest-host walk through ) . This helps uphold host cancellation policies and provides a impersonal third-party for fiscal exchange. The Airbnb web site besides facilitates cleansing fees which are held until the belongings is vacated. The unafraid payment of fees and use is a cardinal manner Airbnb builds assurance for hosts in add-on to the societal and cultural facets of hosting. While the first ground most hosts decide to lease their infinite is fiscal. another ground is a desire to run into new people. demo off their metropolis and be portion of the shared economic system.

Airbnb allows hosts to lease out primary and secondary abodes. but 50 % of hosts rent private suites in their abode while they are at that place ( “Life” ) . On the Airbnb site. there are legion forums and ushers for people to larn about going a host. exchange thoughts and organize a deeper community within the sharing economic system. The societal community built in Airbnb. plus the fiscal and administrative support systems. promote new and repeat hosts to open their places and lives up to the universe because they trust in the trade name and system created by Airbnb.

Following STEPS

Airbnb’s success did non come without the expected growth strivings of any startup company. and particularly one commanding a dominant market portion in the new sharing economic system. While its impact on the tourer trade. single income. gross to little concerns and economic stimulation are singular. the personal monetary value some persons have had to pay utilizing Airbnb’s service is of import non to overlook. From city-issued countenances to persons go againsting rental ordinances. to hooliganism of personal belongings and individuality larceny. the safety. benefits. chance costs. and sustainability of Airbnb’s service has been questioned in the media. To relieve some of these concerns and stay a feasible concern. Airbnb should analyze these obstructions in an attempt to establish consciousness through its community. They can go on to happen ways to supply a more comprehensive and scrutinized ID confirmation procedure for all of their users to minimise the being of bad apples.

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The degree of attention that hosts topographic point on measuring their single dealing hazard and apprehension of ordinances specific to their metropolis has a direct impact on their safety and success as an Airbnb host. Through consumer forums. hosts. invitees. and possible consumers and invitees can pass on on a web to larn from their equals. Airbnb should besides see spread outing the states covered and the points covered under the “Host Guarantee” to increase host protections locally and internationally. Traveling frontward. Airbnb has to be witting of the popular booby traps fellow sharing economic system companies have faced. In a Campbell Mithun survey. consumers were concerned with the following. in falling order: What I lend could acquire lost or stolen. I might non swear others in the web. my privateness might be compromised. sharing is non deserving the attempt. and the goods or services might be of hapless quality ( Olson ) . As described above. Airbnb has taken necessary steps to assist support the safety and privateness of its host and invitees. However. as the sharing economic system evolves. this could acquire more hard and new safety concerns can originate that Airbnb will necessitate to decide rapidly.

Collaborative ingestion represents a major economic. societal and cultural displacement as it moves out of babyhood and toward credence. These companies need to happen the balance between the potency of the sharing economic system and the standing ordinance of the authorities. The current brick and howitzer companies that are take parting in highly-regulated industries like hotels or rental autos now have to vie with services that do non travel through the same strict degrees of review or makings to guarantee public safety ( Lawler ) . Sharing economic system companies could do a solid statement for self-regulation. Airbnb should take attention that they presently have the proper direction to guarantee there are no villainous parties in their concern traffics and that their trade name is strong plenty to self-regulate ( Lawler ) . For a all-around attack. shared economic system companies should look towards or at least be cognizant of how the authorities may enforce ordinances to see how they might assist or impede Airbnb’s advancement.

There will come a clip when companies like Airbnb will necessitate to support their unconventional and minimally regulated services. and should now set into topographic point a squad that can support them. Lobbying municipal and province authoritiess in high use countries is a more traditional but still relevant country for Airbnb to protect its concern theoretical account and by extension its users. The greatest advantage that collaborative ingestion has when supporting their stance to the economic system is that they exist to assist people in their communities to run into their ends ( Metcalf. Warburg ) .

These companies need to leverage their community-based benefits as a manner to derive support and entreaty to those desiring greater authorities intercession. Preparation and apprehension of user demands. authorities ordinances and economic tendencies will bridge the nascent shared economic system into a strong. sustainable economic force. Therefore. if Airbnb continues to concentrate on constructing a trade name that consumers can swear in and created mechanisms to back up hosts and invitees so it can be a lasting. profitable company for old ages to come.

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