Nani Keys
Global Marketing
Research Paper
Airbnb: Alternative Hospitality

Introduction

When a design conference came to San Francisco in 2007 and wiped out available vacancy in hotels, Brian Chesky and Joe Gebbia sought an opportunity to lessen their financial burdens and rent out the available space in their apartment. Almost 6 years later, their solution evolved into a successful Internet service that allows members to rent out homes or spare rooms to travelers. Through alternative marketing strategies including: acquisition, content marketing, and social engagement and personal testimonials, Airbnb now values at almost $2.5 billion.
Officially founded in August 2008, Airbnb.com has become the traveler’s ‘go-to’ resource when looking for accommodations in over 192 countries. The original web site offered short term lodging, home-cooked breakfast for travelers as well as a business networking opportunity for those willing to share their space. The simplicity of the site has made it easy for members to build their own profile online to better connect with potential clients from all over the world. Lodging found through Airbnb varies from entire homes and apartments to igloos and private islands, creating a unique experience for every traveler.
Acquisition

In the beginning of 2011, Airbnb acquired a German competitor, Accoleo, initially launching their first international office. As international user rate increased, Airbnb established international offices in Paris, Milan, Barcelona, Copenhagen, Moscow, and São Paulo. Currently, the company is putting in their best efforts into expanding to Australia and Asia. Over 75% of all Airbnb usage is now outside of the United States.
Through acquisition, Airbnb has been able to diminish their competition by buying them out; making them a leader in alternative hospitality. Localmind

In December 2012, Airbnb acquired Localmind, a network that allows its users to send a question to any place in the world and get a real-time answer from someone in that location. Whether a user wants to know how busy a restaurant is at happy hour or the traffic is, Localmind provides its users with a sense of mind. Airbnb has further expanded their users’ connections to dream destinations and friends from all around by this acquisition.
“The role of social in travel is more important than ever. We’ve seen connections shape the experience for our community, so we’re excited to have the Localmind team join us and lead this next wave of social product,” says Chesky, Airbnb CEO.
Crashpadder

One of Airbnb’s most successful acquisitions was Crashpadder, their highest U.K. competitor. Timing the acquisition right before the 2012 Olympic Summer Games, Airbnb successfully cornered the market and increased usership during the Olympic events. This acquisition has made Airbnb the largest source for peer-to-peer accommodation booking in the U.K., since the two traveling communities have merged.
“We’re very excited to welcome the Crashpadder community to Airbnb. We knew that London was going to be a major focus for us in 2012 with the Olympics on the horizon. Now, with the addition of the Crashpadder community we are making huge strides to ensure that thousands of Olympic visitors will have a unique and local experience as Londoners open their door to the world during the games and beyond.” -Chesky, Airbnb CEO

Content Marketing

As their company expanded, Airbnb adapted to suit the needs of their users. Through content marketing, Airbnb utilized their content to engage travelers further and bring in new clientele.
Neighborhood Guides

Launched in late 2012, Airbnb’s neighborhood guides prove an excellent resource for travelers in all steps of the rental process. The guides provide intel and behind-the-scenes, local information for an array of popular cities featured on the site. With the given resource, travelers can make an educated decision on which neighborhood they decide to stay in. The guide also provides traditional guide options for dining, shopping and nightlife suggestions. Airbnb has helped travelers avoid the extra step in finding additional traveling sites in search on any city references and provide all information in one place. Twitter and the Neighborhood Guides have gone hand in hand by Twitter feed’s reflecting stories from renters on their experiences in new cities. For easy navigation, the Twitter feeds include a link that takes followers directly to the Airbnb Neighborhood Guide page for that city.
Airbnb TV and Lifestyle

Another way the traveling site has made community engagement a priority is through Airbnb TV. There are currently 89 original videos online, ranging from testimonials, guided tours and tutorials. As Airbnb’s success relies heavily on their client’s experiences and opinions, Airbnb TV puts community first.
Airbnb Lifestyle is another video hub exclusively for testimonials and highlights past user’s experience. The videos showcase the impact the service had from a financial, social, and emotional standpoint. All of the stories aim to inspire existing, and potential in Airbnb users. Each video has “Live a richer life” as a tagline to further emphasize the opportunity to be had. Airbnb Lifestyle showcases the true advantage of developing a strong community base with personal experiences.

Social Engagement

Airbnb has successfully adjusted to the technical age, utilizing social media- primarily Facebook and Twitter. The website now has 247,000 ‘likes’ on Facebook and over 140,000 followers on Twitter. One special feature is Social Connections, which allows users to connect Airbnb accounts with their Facebook accounts. The feature shows the user if any friends have booked in the place where they’re considering traveling to. The tool enhances the sites credibility though tapping into word-of-mouth recommendations. Not only can the user now view their friend’s adventures, it also features the top-rated rentals in the network. Knowing people that have endorsed certain spaces personally has given extra security and confidence when booking with Airbnb. For additional engagement, the site has launched several contests and opportunities on these social outlets as well as their own domain.
Holiday subscriptions

In the season of giving, Airbnb launched a campaign that allowed subscribers to send holiday greetings to hosts they had stayed with or alternatively, guests they had accommodated in 2012. The campaign was launched in a single personalized email, sent in batches from Dec. 22 to Dec. 24. The main call-to-action urged subscribers to "send a card to all your hosts." The tool provided templates and emphasized that there would be no promotional messaging, only focusing on getting their members to communicate with each other. "As a company, we pride ourselves on providing a marketplace for people, not just to stay in some place, but to stay in some place to gain an experience, to be immersed in the culture and the community," DiGuido said. "To muddy that with a message that is self-promotion would detract from the pureness of the sentiment behind [the campaign]." said George DiGuido, Head of Email Marketing, Airbnb. The campaign proved a success with engagement and revenue increases. On average, there was a 52.3% open rate, where regular marketing emails usually only reach around 8%-12%. It was reported that the subscribers who used the tool sent 7.5 messages on average. Even without any promotional messaging, over 600 bookings were driven by the campaign. Destination: Honeymoon

Airbnb teamed up with Honeyfund.com to send two couples on their dream honeymoon. To enter, couples had to submit photos of them that show off their personalities and interest in Airbnb. There were 240 entrees who all advocated Airbnb brand to show their enthusiasm, which resulted in an average of 16 clicks on each link shared on Twitter and Facebook and 10,299 votes casted in one month’s time.

Conflicts and Controversies

As the company expanded, Airbnb have had their fair share of bumps in the road. Vandalism

On June 22, 2011, one of the many users’ home was vandalized and her valuable possessions were stolen by an Airbnb guest. The distraught user, a woman who uses the pseudonym EJ, posted a blog on the incident, which soon went viral and put Airbnb under fire. In response to the media firestorm, Airbnb CEO Brian Chesky wrote a blog post on the site, apologizing to EJ and fellow users for letting them down. He also introduced the new innovations in response to this situation.
“Starting August 15th, when hosts book reservations through Airbnb their personal property will be covered for loss or damage due to vandalism or theft caused by an Airbnb guest up to $50,000 with our Airbnb Guarantee. Terms will apply to the program and may vary (e.g. by country). This program will also apply retroactively to any hosts who may have reported such property damage prior to August 1, 2011.” Brain Chesky, Airbnb CEO
Since the incident, the company has set up new support options and offers a 24-hour customer hotline. To give their users their own sense of power, profiles have been updated to include more information and have given the hosts the option set their own parameters for potential guests. This is designed to weed out ones who haven't provided certain details and potentially avoid any more vandalism
Airbnb kept their mission for personal connection a priority, even in the dire circumstance. “I would be remiss if I didn’t pause here to emphasize that the customer service team at airbnb.com has been wonderful, giving this crime their full attention. They have called often, expressing empathy, support, and genuine concern for my welfare. They have offered to help me recover emotionally and financially, and are working with SFPD to track down these criminals.” EJ stated in her personal blog days after the report.
Law and Lease Regulations

New York City has been battling companies like Airbnb over law regulations as well as out broken lease contracts. A 2010 state law restricts people from renting an apartment for fewer than thirty days if a permanent resident of the apartment isn’t present. Users also have to take account that if they are just renters, they may be breaking their rent contracts for subleasing their rental. Airbnb faces this problem by lobbying for the government to override the law and allow short-term rentals when the owner isn’t present and in exchange, require Airbnb renters to pay the city’s occupancy tax that applies to hotels. Potential solutions have been brought to surface in regard of leasing contracts by requiring hosts to rent only properties they own (and require proof of ownership before allowing a listing). However, Airbnb has not yet made their decision on how to pursue the situation.
Future Plans for Airbnb

As of November 2013, the co-owners of Airbnb are still working to create a reputable organization. “We never even looked at our competition. Everything we do at Airbnb, we try to have the courage to do something very very differently," says Chesky. "We are just maniacally focused on creating the most amazing experience for customers and it really starts with a breakthrough idea." In regards to past problems associated with law regulations and safety, Chesky takes the approach, “When we go to a city we want to educate them on what we do and how to partner because ultimately we want the city to be better off because we're there and regulations are in place to protect consumers.”
Although, the company has not yet announced the possibility of going public, the developers of Airbnb are pushing all of their efforts towards growth in mobile application. The mobile app “Reimagination” was launched in 2013 as an easy way for hosts to manage their listings. In addition, “Reimagination” makes recommendations for how to make a guest’s stay more special. It recommends amenities, and things that users can do to prepare for their guests to make it a better experience. “Airbnb is a company that was founded by hosts, for hosts,” Chesky said. “With that in mind, the company is trying to get hosts rallied around the idea of openness in which you can go anywhere and feel like you’re going home.”
Conclusion

In less than 6 years, the startup company, Airbnb has taken the hospitality industry by storm by providing an alternative to traditional hotel lodging. By creating a personal community, travelers can connect with hosts from all around the world for a more ‘homey’ and unique experience. Now valuing at nearly $2.5 billion and servicing over 192 countries, Airbnb have a leading role in the shared economy.
Airbnb market strategy varies from acquisition, content marketing, and thrives on the personal connection and their users’ engagement. The company has since acquired international competition as well as complimentary companies to provide their clientele with the most up to date features and access to unventured attractions. Through content marketing, Airbnb utilized their content to engage travelers further by adapting to suit their needs. To hold true to keeping in touch with their customers, CEO and co-founder, Brian Chesky leads by example through using the service himself. "In June, 2010, I moved out of my apartment and I have been mostly homeless ever since," he is quoted, “It’s the best way to take the pulse...The key is to always use your product.” Airbnb has raised the bar on the hospitality industry with new innovative ways to keep their customers satisfied.