Category: Airbnb

Introduction

Developing efficient marketing strategies is vital for a company’s success. Airbnb is a vivid example of a company that required reconsideration of its strategic marketing in order to revitalize the brand. This paper will present a brief summary of the essential marketing strategy issues of the Airbnb case, which are relevant to this day, as well as some contemporary issues. What is more, three recommendations concerning solving these issues will be provided.

Main body

One of the first and most significant issues concerning Airbnb marketing strategies has always been intense competition. The rival companies are widespread not only in Spain but all over the world, ranging from international giants like Booking.com to private local rental properties. Overcoming such active competition presents an important challenge in the hospitality and tourism industry. Therefore, this area should be taken into consideration while developing a marketing strategy.

Another issue relating to Airbnb marketing strategies nowadays is attracting new categories of customers, apart from tourists. It is noted that Airbnb has been putting significant efforts to increase the appeal of the platform for those traveling on business (Carson, 2018). The focus of the company is on attracting high numbers of corporate travelers rather than some employees on occasional business trips.

Finally, one of the recent challenges Airbnb has to address is effectively dealing with negative publicity. This publicity mostly stems from the various safety issues encountered by the customers. The most frequent examples of safety violations that affect the Airbnb brand include the uncontrolled possibility of scams or last-minute cancellations on the part of hosts (Graham, 2018). All in all, these aspects present certain challenges and have to be handled carefully.

Revitalizing the Airbnb brand in Spain and other target markets requires a number of marketing strategies aimed at coping with the issues described above. First and foremost, to address the challenge of intense competition, it is recommended to expand Airbnb activities. It is crucial that the new services cover the gaps in rivals’ options, identified through thorough market research. Offering unique experiences is already a part of Airbnb’s rebranding activities. However, these experiences can be expanded in partnerships with local companies.

The study of each city or area destined for further development would allow encountering a number of businesses offering various services, which are genuinely unique. Partnerships with these businesses would attract more visitors to the given destination. For instance, partnerships with local guides or agencies offering individually created adventure holidays could enhance the tourist flow to a particular area. Overall, such partnerships would facilitate travel arrangements for customers and increase the convenience of Airbnb services.

The second recommendation relates to Airbnb’s current goal of increasing the number of business travelers. This can be done by developing a network of accommodations suitable for corporate events. In order to achieve this, different requirements have to be analyzed, and conditions have to be reconsidered to meet the business needs. Most importantly, the value of time for business travelers has to be taken into account. Firstly, the check-in time should be adapted to the needs of corporate travelers. What is more, any delays in key exchanges that frequently occur on the part of hosts are unacceptable in the business context. Therefore, the policy of collaborating with hosts has to be reassessed, and special conditions have to be incorporated for hosts dealing with corporate clients.

In addition, the accommodations intended for corporate use have to meet certain standards. For instance, such work-related essentials as Wi-Fi, stationery, desks, and printers, as well as a necessary number of power outlets, should be provided. Other important conditions are sufficient space and access to transportation or leisure activities. In general, creating a network of suitable accommodations adapted for business needs is a lengthy but essential process.

The third recommendation to revitalize the Airbnb brand involves improving the company’s public image. In order to address the safety issues raised by a significant amount of customers’ complaints, Airbnb would have to enhance the safety regulation policies. This is one of the most important steps in image improvement. At the moment, the company does not offer any measures to prevent scams or last-minute cancellations by hosts, which is one of the main customers’ complaints.

This issue can be addressed by introducing a basic host checking procedure, including ID and address verification. It is crucial to verify both registered hosts and those who are new to the platform. These new policies require careful implementation, as the risk of decline in the number of hosts exists. Nevertheless, enhancing safety policies for clients is a necessary condition for preventing scams and improving Airbnb’s public image.

Conclusion

To sum up, to revitalize the Airbnb brand, it is important to consider a number of marketing strategy issues. The recommendations, concerning Airbnb marketing, include handling the issue of intense competition by offering unique services to customers in partnership with local businesses. Also, it is crucial to adapt the accommodations and host collaboration policies to the needs of corporate clients, as well as improve safety regulation policies.

References

1. Carson, B. (2018). Airbnb targets more than travelers: Company courts businesses for relocation, team-building. Web.
2. Graham, J. (2018). Airbnb’s growth curbed by safety concerns. Web.

Abstract

The global housing industry has been undergoing a crisis over the last few years. In some cities around the world, Airbnb is considered the biggest culprit for the decline of affordable housing. Airbnb offers short-term rentals for travelers and tourists. It provided a solution to the shortage of hotel rooms around large events. Nonetheless, despite its success, Airbnb has been faced with criticism over discrimination in some of its listings, lack of safety standards, and poor customer experiences. There are opportunities for the company to change its public image by focusing on its positive contributions to the industry. A PR campaign is essential for the company to enhance its reputation among customers. A five-year plan should enhance the perception of Airbnb and maintain its position in the global market.

Introduction

Airbnb is an American company that deals with short-term rentals and homestay experiences. The company recruits homeowners and landlords to offer their rooms for a limited time for tourists and other guests traveling worldwide. Airbnb is a broker and takes a commission from each booking (Barron et al., 2018). Founded in 2008, Airbnb aims to create a world where you can belong anywhere and where people can live in a place instead of just traveling to it. The company sought to address the issue of overbooked hotels, especially in areas with large events such as sports, political rallies, or corporate functions. Its core values are championing the mission, being a host, embracing adventure, and being a serial entrepreneur. Airbnb encourages hosts to facilitate an experience that gives customers a sense of belonging. The hosts, guests, and communities where Airbnb operates are all stakeholders in the company. Therefore, the organization must serve them well, alongside its employees and investors.

The company operates in a changing market that is constantly affected by different market forces. Airbnb has over 150 million users, 5.6 million listings, and more than half a billion guests annually in over 220 countries (Airbnb, 2022). Across the world, there are 100,000 cities with active Airbnb listings (Barker, 2022) The gross revenue for Airbnb was $48.9 billion in 2021, a 76.6% increase from $27.69 billion in 2020 (Airbnb, 2022). In 2020, Airbnb had an IPO, which determined its estimated value at $86.5 billion (Airbnb, 2022). The company is valued at around $110 billion, with a 20% market share in the vacation rental industry as of 2022 (Airbnb, 2022). The growth of Airbnb in the past decade has, however, not been short of controversy. Airbnb has been accused of contributing to the surging housing prices in cities such as Los Angeles and Seattle (Barker, 2022). Critics argue that short-term rentals are taking out permanent residences off the market. Further, there are accusations of racial discrimination against hosts and guests when determining their rental options (Barker, 2022). Therefore, the company needs to develop a strategy that helps it maintain market share while addressing the critical issues among its consumer base.

Airbnb PR Campaign

Objectives

Airbnb should embark on a five-year term to revamp its public image. First, it should focus on the essential issue of host and renter relations. There have been incidences of strained relationships with guests due to theft, terrible customer experiences, and discrimination. Airbnb is built on the principle of customer engagement and the reputability of its listings. The organization should hence embark on a program to promote safety and assure customer comfort. To address the problem of discrimination, Airbnb must cultivate trust with minority groups. This is possible through the promotion of diversity in its hiring policies (Barker, 2022). Further, hosts and guests should be encouraged to engage and interact with each other adequately beforehand to develop good relationships. Airbnb can broadcast the positive stories from its most loyal customers to change its unfavorable perception in public. Therefore, the main objective of the PR campaign is to enhance the image of the business among its key stakeholders.

PR Campaign

Social media offers an excellent platform for Airbnb to influence its image. The company can contact its most loyal and profitable hosts and collaborate with them in developing a diversity campaign. Airbnb hosts and guests worldwide will be encouraged to share their experiences through social media posts (Barron et al., 2018). This will change the perception of discrimination among its user base. Positive reactions should be the focal point of Airbnb’s advertisement campaigns and the pursuit of a larger market share. Further, Airbnb can liaise with hosts from minority communities and engage with them on how best to boost their positive ratings and visibility on the website. The company leaders should incorporate diversity and inclusion into its mission statement and values. An Airbnb is for everyone ad campaign should help alleviate some of the stereotypes and negative perceptions of hosts and guests using the website. The advertisement should focus on creating a positive perception of the company, which can help enhance its revenues.

Airbnb should appeal to lawmakers and the public regarding the positive impacts of its services. In recent years, affordable housing has evolved into a critical issue in many urban centers worldwide. Airbnb is at the center of this storm in several US cities, giving the organization a negative image. It is important to shift the company’s opinion by focusing on its impact on individuals and distancing itself from association with lobbyists and corporations. Airbnb should concentrate on the personal stories of hosts and guests to appeal to lawmakers regarding their impact on the industry. Most importantly, the message should be that Airbnb is providing real solutions to a real problem impacting travelers across the world (Barron et al., 2018). It is vital to prove that Airbnb has positively impacted vacationers and improved the travel experience. This should be the selling point of their appeal to lawmakers and groups focused on legislation to regulate the temporary housing industry. The public relations department can motivate users of Airbnb’ to post images of their stay and provide information on the impact on their overall experience.

Airbnb has been a great boost to the tourism industry in many areas. A wider variety of affordable and available holiday listings has significantly benefited local economies (Barron et al., 2018). The Airbnb campaign should shed light on these benefits while debunking the claims of their negative effect on affordable housing. The company should provide compelling statistical evidence to prove that its impact on local house prices is less significant than portrayed in the media. Moreover, Airbnb should strive to show that the gains from tourism outweigh the potential losses caused by the potential shortage of permanent rentals. The organization might seek lawmakers’ attention to establish a compromise on temporary housing laws. For example, Airbnb can include limits on the number of days in a month that a renter can list a property on the website. Further, the prices of listings should be tailored to a specific range that reflects the accurate market value of housing. The organization should conduct extensive research on house prices across the world and identify the most appropriate price range for each region (Barron et al., 2018). Airbnb should focus on its global impact on travelers and the possible consequences of issuing strict bans on short-term rentals. Ending the wrangles between the company, legislators, and homeowners will create a stronger foundation for the PR campaign to succeed. Positive stories from renters will create an emotional appeal that will turn the opinion of legislators in Airbnb’s favor.

Airbnb should incorporate a submission section where travelers can post their images, videos, and stories of their experiences across the globe. The messages should highlight the positive impact across multiple cities and how it has impacted the lives of local communities. Airbnb can also hire travelers whose sole responsibility is to spread positive PR for the company. It should focus on travelers with a significant social media following so that the message can reach as many people as possible (Barron et al., 2018). Additionally, Airbnb should increase engagement across its social media platforms as a way to improve its public perception. A positive social media campaign can serve to shift the opinions of lobbyists and lawmakers, especially in the US. A comprehensive social media program should indicate that Airbnb is aware of its current issues and provide an outline of the solutions and their proposed implementation timeline. The company can also work with influencers to change the way customers and other stakeholders view the business. The influencers can work together with travelers to highlight important issues that potential clients should view.

Conclusion

Airbnb has grown significantly over the last decade and provided real solutions for travelers worldwide. Its impact on the industry has been felt in various sectors of the economy, mainly tourism and housing. The issues facing the company currently have real solutions that can be implemented quickly and efficiently with the cooperation of all stakeholders. Airbnb strives to be a customer-friendly organization that curates a good holiday experience for everyone, everywhere. Therefore, it should shed light on its positive contributions to society and offer a framework to address its most pertinent issues.

References

Airbnb. (2022). Airbnb fourth quarter and full-year 2021 financial results. Airbnb Newsroom. Web.

Barker, G. (2022). The Airbnb effect on housing and rent. Forbes. Web.

Barron, K., Kung, E., & Proserpio, D. (Eds.). (2018). The sharing economy and housing affordability: Evidence from Airbnb. Association for Computing Machinery. Web.

Financial Performance of Airbnb

Airbnb is the selected company, and it is necessary to analyze its financial performance for 2018. This report will rely on the data found on the professional website (Macrotrends, 2022). Firstly, one should focus on profitability ratios, including gross profit margin and operating profit margin. Special calculations reveal that 2018 witnessed a 2.18% increase in the gross profit margin and a 116% rise in the operating profit margin compared to the 2017 data. Secondly, leverage ratios can also disclose useful information about the company. In 2018, the return on equity ratio was 3.26, while the return on assets was estimated at -0.25 (Macrotrends, 2022). Thirdly, it is reasonable to look at the free cash flow per share data. In 2018, this ratio increased by 133% compared to 2017 (Macrotrends, 2022). One can use these financial ratios, percentages, and growth rates to assess the company’s financial performance.

The increases in the profitability ratios demonstrate that Airbnb kept increasing its revenues in 2018. One should also highlight that the gross profit margin rise was dramatic compared to the previous year’s data. In turn, the leverage ratio analysis generated some controversial outcomes. On the one hand, the return on equity ratio of above 3 denotes that the company’s financial health was beneficial, and the business managed to generate decent revenues. On the other hand, the negative return on assets indicates that the organization had difficulties obtaining sufficient profits to cover the amount of asset. Furthermore, a significant increase in the free cash flow per share data denotes that the company became more financially flexible in 2018 compared to 2017. In conclusion, this information reveals that Airbnb featured decent financial performance in 2018, but some weaknesses were also found.

Strategic Group Map

The strategic group map above represents the analysis of the accommodation industry and the businesses that represent it. They are placed in the graph according to how many services they offer in addition to the accommodation itself (the vertical axis) and how much these organizations charge for their services (the horizontal axis). Hotels and motels occupy the top position in the graph because they offer the highest number of services, including accommodation, business, corporate meetings, and celebrations. However, these establishments are the most expensive in the sector. Camping facilities and private accommodations are the cheapest offerings, but they do not impress with attractive service ranges. As for bed and breakfasts, they offer a wide number of services, but customers can purchase them for lower prices compared to hotels and motels. Since Airbnb is a representative of the latter industry segment, it is located in the center of the diagram.

Reference

Macrotrends. (2022). Airbnb financial ratios for analysis 2017-2022 / ABNB. Web.

In the present day, Airbnb may be regarded as the most popular online marketplace that connects travelers and homeowners from all over the world. On its platform, it provides an opportunity to rent and rent out private homes, apartments, and rooms. Although the company experiences continuous growth and development being chosen by millions of individuals across the globe on a daily basis, it is essential to provide its external and internal analysis in order to update its core strategies when necessary and keep its positions.

The external analysis within the framework of the five forces model allows defining main competitive forces that exist in a particular industry. Although Airbnb is closely connected with lodging, it belongs to the online rental industry providing accommodation-rental services on the basis of existing offers. In turn, five forces that contribute to the competition and create the market’s competitive pressures include competition from rival sellers, potential new entrants, and substitute products along with supplier and customer bargaining power (Thompson et al., 2021). All in all, it is possible to say that there is a high competition between rivals in the online rental industry – there are several major companies in the market, including Airbnb, Booking.com, Wimdu, Vrbo, TripAdvisor, GlampingHub, Agoda, Expedia, HomeAway and multiple local and niche players.

Due to a low differentiation, all of them offer relatively similar products and services that may be easily substituted. In addition, the market is open for new entrants and with competitive advantages, they may replace even highly successful companies. That is why, rivals that already operates in the market undertake all efforts to improve their marketing strategies gaining competitive advantages and attracting customers through affordable prices, unique and exclusive offers, the higher quality of services, new opportunities, and multiple other features for comfortable use. At the same time, while there are no suppliers as both homeowners and guests may be regarded as platforms’ users and customers, their bargaining power are considered by companies. As travelers want affordable prices, comfortable conditions of rent, and support from the company while homeowners require warranties for their property, they are constantly looking for platforms that will be able to satisfy their needs to the fullest extent.

In a highly competitive environment, for any company, it is essential to define its main strengths, weaknesses, opportunities, and threats. In this case, SWOT analysis may be regarded as the most suitable tool for the assessment of these categories (Thompson et al., 2021). Thus, for Airbnb, it will be the following:

Strengths:

• Airbnb is a globally-recognized and well-established international company that operates all over the world in different locations;
• It offers a unique community that connects hosts and visitors, allowing them to interact;
• Airbnb provides a well-developed web platform with a variety of features for a safe and enjoyable rent, such as scheduling, community assistance, pricing tips, host security measures, integrated payments, customer reviews, and more;
• It may be regarded as an alternative to the cost-inefficient booking of hotels.

Weaknesses:

• Airbnb is frequently criticized for high prices of accommodation;
• It faces the violation of housing regulations and laws;
• The company cannot guarantee the absence of disreputable hosts and guests who, in turn, impact its reputation as well;

Opportunities:

• Airbnb may expand its products by offering car rentals or tour packages;
• It may invite celebrities who will be able to attract millions of new customers by offering their accommodation for rent;
• Airbnb should develop its mobile application including new features and functions.

Threats:

• Airbnb has a business model that may be easily copied by rivals and new entrants;
• The continuous involvement in housing law violation may destroy the company’s reputation;
• Airbnb’s services are highly vulnerable to global events, such as pandemics and economic crises, that may limit travelling and lodging.

Reference

Thompson, A., Peteraf, M., Gamble, J., & Strickland, A. (2021). Crafting & executing strategy: The quest for competitive advantage: Concepts and cases (23^rd ed.). McGraw-Hill Higher Education.