Airbnb has set its sights on a trio of strategic priorities for 2023: Make Hosting Mainstream, Perfect the Core Service, and Expand Beyond the Core. Are the company’s aspirations bearing fruit?
Discover the captivating story behind Airbnb’s evolution in this in-depth analysis.
Make Hosting Mainstream
Since 2021, Airbnb has been actively engaged in an initiative to educate the public about the distinctive aspects of hosting through their “Made Possible by Hosts” commercial series. This outreach has been part of the company’s effort to distinguish its brand by focusing on hosting as a core differentiator.
In 2022, they doubled down on this strategy by introducing the Airbnb Setup program, designed to expedite the onboarding process for new hosts.
In 2023, Airbnb re-embraced its core identity, positioning itself as the go-to platform for an effortless transition into hosting. Under the banner of ‘Make Hosting Mainstream’, this objective involved elevating host awareness, streamlining onboarding processes, and enriching support tools. The overarching aim was crystal clear: establish Airbnb as the simplest path to converting your residence into a supplementary income stream through guest accommodations. It went about it in the following ways:
In 2023, Airbnb’s campaign to make hosting mainstream is evident in its “Airbnb it” advertising campaign, which aims to attract occasional hosts, including those offering private rooms and guest houses. The campaign’s impact is reflected in a doubling of visits to the host landing page since its launch.
A notable shift in 2023 is the introduction of “Airbnb Rooms,” a strategic move that highlights Airbnb’s reinvigorated emphasis on private room rentals – a domain that had previously defined the platform’s identity.
From Q3 2021 to Q3 2022, private room listings witnessed a substantial 31% increase, demonstrating a rising demand for this accommodation type.
While Airbnb introduced the “private room” category on its platform in late 2022, it was only in 2023 that the company made it more prominent on the platform and rebranded this and related efforts as Airbnb Rooms.
This strategic return to its roots not only addresses the perception of being costly but also bolsters the supply, ushering in a new chapter for Airbnb’s offerings.
Converting More Guests Into Hosts Than Ever
Airbnb’s strategy of leveraging its guest base to bolster supply is a recurring theme. By tapping into its extensive customer network, Airbnb has managed to turn 36% of newly available hosts into hosts who were once guests themselves. This approach highlights the platform’s ability to cultivate growth from within its existing user pool.
Did Airbnb ‘Make Hosting Mainstream’ in Q2 2023?
Airbnb’s Q2 2023 data holds key insights that vividly align with the company’s first goal of “Making Hosting Mainstream.”
- Supply Growth Surge: The data reveals a significant 19% year-over-year increase in active listings during Q2 2023. This robust supply growth underscores Airbnb’s commitment to expanding hosting opportunities, enabling a broader range of hosts to join the platform.
- Diverse Market Expansion: Across all regions, market types, and price points, Airbnb witnessed double-digit supply growth. This widespread surge signifies the platform’s proactive approach to attracting hosts from various backgrounds, contributing to the mainstreaming of hosting.
- Historical Milestone: Q2 2023 witnessed a remarkable achievement as Airbnb added more net active listings than any previous quarter, surpassing a noteworthy 7 million total active listings. This accomplishment directly supports the goal of making hosting a widespread and accessible endeavor, appealing to a larger host community.
- Strategic Urban Rebound: Recent data reveals a remarkable 20% growth in urban listings, surpassing the 19% growth rate of traditional vacation rental listings. The COVID pandemic pushed Airbnb into traditional vacation rental markets, as demand for city stays collapsed. The fact that urban is growing fast shows that Airbnb’s former core engine, urban, is ticking again.
Perfect the Core Service
Central to Airbnb’s ambitions for 2023 is the goal to “Perfect the Core Service.” This aspiration revolves around refining the bedrock of Airbnb’s offerings – short-term stays of less than 28 days mostly in North America and Western Europe – to provide users with an even more satisfying and seamless experience. This mission involves addressing user concerns, streamlining processes, and boosting the overall value proposition. Here are the key focus areas:
- Boosting Support: Airbnb is ramping up user assistance, ensuring prompt resolutions to queries and concerns. This step reinforces trust and reliability among users.
- Simplifying Home Selection: Airbnb strives to make finding the right accommodation effortless. Through smarter search tools and personalized suggestions, Airbnb wants to ensure users find their ideal stay with ease.
- Maximizing Value: Airbnb aims to strike the right balance between affordability and quality. By refining pricing tools and offering insights for competitive pricing, Airbnb intends to provide more value to its users.
So what does perfection look like?
So far, Airbnb has already made headway toward making substantial changes to its core service, and here are the most important ones:
- The introduction of over 50 new features and upgrades during the 2023 Summer Release, underlines Airbnb’s responsiveness to user feedback and commitment to an evolving user-centric framework.
- A redesign of pricing tools, aimed at mitigating the challenges faced by hosts in determining competitive prices. The integration of pricing tools into a unified calendar framework enhances user convenience and pricing clarity.
- The rollout of an innovative “View Similar Listings” feature, provides hosts with a benchmarking tool for competitive pricing strategies. This initiative resonates with Airbnb’s endeavor to augment host competitiveness within the marketplace.
Empowering Travel Planning with Enhanced Wishlists
Airbnb understands that wishlists are not mere gadgets; they signify desirability. For instance, within the Host Dashboard, Airbnb provides hosts with insights into how frequently their listings have been added to wishlists—a metric of considerable importance to Airbnb.
The data indicates that over 50% of wishlisted bookings originate from travelers engaging in intricate, multi-destination journeys, often spanning international destinations. To enhance the value of wishlists in shaping these elaborate and diverse travel itineraries, Airbnb has introduced a range of new features.
The newly added features facilitate seamless wishlist usage, making it simpler for guests to meticulously plan and execute remarkable trips:
- Save with a Single Tap: Guests can now save new homes to their Wishlist with a single tap while conducting searches.
- See Availability at a Glance: A new availability calendar provides guests with means to adjust their travel dates. This calendar instantly displays the homes that are available for their chosen period, facilitating efficient trip planning.
- Add Notes to Saved Homes: Guests have the option to attach personal notes to the homes they’ve saved in their Wishlist, enabling travelers to jot down reminders, preferences, or reasons why a particular place caught their interest, ensuring a seamless recall of each home’s unique appeal.
These improvements are good, but they still have a long way to catch up to Vrbo’s Trip Board. On Trip Board, for instance, you can invite people to see your wishlist and vote for their favorite options, which helps groups plan trips together better.
Introducing Only On Airbnb
Airbnb has consistently excelled at garnering free PR through creative initiatives like spending a night in a floating house on the Thames in London, booking an entire island in Belize, or enjoying stays in unique locations like Le Louvre Museum. \
Airbnb’s “Only On Airbnb” program offers exclusive, standout listings, embodying the platform’s commitment to unique experiences, kickstarting it with the Barbie Malibu DreamHouse.
Interestingly this is Airbnb’s second Hollywood collaboration, close on the heels of the company’s campaign with Gwyneth Paltrow.
It’s also likely the first time Airbnb has transformed a property to ride the wave of a trend, as seen with the Barbie-themed experience, rather than simply highlighting existing listings that already offer something special.
Barbie Malibu DreamHouse: An Iconic Collaboration
Teaming up with Warner Bros. and Mattel, Airbnb transformed a home into the iconic Barbie Malibu DreamHouse. This standout offering under the “Only On Airbnb” program garnered global attention.
Global Pop Culture Impact
The program taps into significant global pop culture moments, captivating guests with extraordinary accommodations. The Barbie Malibu DreamHouse achieved remarkable success, becoming Airbnb’s most popular listing ever, with 13,000 press features and over 250 million social media impressions.
Expanding Horizons and Distinctive Introduction
“Only On Airbnb” campaigns effectively introduce unique stays to new guests, surpassing the press coverage of Airbnb’s IPO. These campaigns are pivotal in extending Airbnb’s reach and showcasing its unmatched offerings.
The triumph of the “Only On Airbnb” program underscores its role in shaping Airbnb’s future. As the company evolves, these exclusive campaigns will continue to captivate audiences, representing an integral part of Airbnb’s strategic direction.
Expand beyond the Core:
Airbnb’s strategy for evolving beyond its core short-term rental model in the U.S. encompasses a wide array of initiatives that prioritize enhancing the Airbnb experience, capitalizing on emerging market trends, and unlocking new growth opportunities.
One major focus of Airbnb’s growth strategy is its deliberate expansion into international markets. Recognizing its subpar performance in key countries such as Germany, Brazil, Japan, and South Korea, Airbnb has taken substantial steps to address these gaps. While it is difficult to comment exactly how badly its platform was lagging, noteworthy progress has since been achieved.
Airbnb’s approach to growth is straightforward: excel in what you do best, but do it in more countries. An essential facet of this strategy involves international expansion, which is seen as the most readily attainable avenue for increased growth.
This has proven to be successful in countries like Germany and Brazil, where the company has employed a comprehensive strategy that includes brand development, public relations, social media, and partnerships with local celebrities. These successful tactics are now being expanded to Asian markets like Japan and South Korea. Additionally, Airbnb stresses the need to localize its product in these markets, particularly in relation to adapting to local payment methods.
In spite of a marginal 1% decrease in Average Daily Rate (ADR), this region has seen strong growth in bookings, supported by a 20% increase in cross-border bookings.
EMEA (Europe, Middle East, and Africa)
Despite a tough comparison to the prior year, EMEA witnessed an 8% rise in ADR and a 15% increase in cross-border bookings. Particularly in Germany, Airbnb’s efforts have led to a significant 63% increase in bookings compared to pre-pandemic levels.
Identified as Airbnb’s fastest-growing region, this area has seen bookings surge by 22% Year on Year. Notably, Airbnb’s targeted investment in Brazil has resulted in robust growth, with bookings skyrocketing by 110% compared to pre-pandemic levels.
This region, including key markets like Japan and South Korea, has experienced the highest growth at 24% YoY. Despite having more supply than demand in these specific markets, Airbnb’s focused strategy has led to an uptick in bookings.
Facilitating Longer Stays
Since the early months of COVID, Airbnb has emphasized longer stays (over 28 days). What’s clear now is that even after the pandemic, the demand for extended stays remains strong. Airbnb has recognized this trend and is capitalizing on it.
The shift towards longer stays is evident in the numbers. The percentage of monthly stays has increased from 13% before the pandemic to a steady 18%. This points to a changing preference for more flexible work and living arrangements.
Further Expanding Monthly Stays
Airbnb’s commitment to catering to diverse traveler needs is evident through its efforts to bolster Monthly Stays. In May, the platform took a series of strategic steps to render extended stays more economical and accessible, marking a notable shift in its service offerings. The key developments in this endeavor include:
- Fee Reduction for Long-Term Stays: Significant reduction of guest service fees for stays surpassing three months, enhancing affordability.
- Pay by Bank: Introduction of a novel payment option for U.S. guests, encouraging cost-effective bookings exceeding one month.
- Streamlined Monthly Discounts: Enhanced process for Hosts to apply monthly discounts, making extended stays more enticing.
The user experience for monthly stays was further elevated through intuitive improvements, including a revamped dial interface. This intuitive feature empowers guests to seamlessly search for stays ranging from 1 to 12 months, simplifying the process of finding the perfect extended accommodation.
Contrary to rumors in publications like Skift, Airbnb seems still committed to Experiences. As part of Airbnb’s expansion strategy, the company aims to develop and scale up its ‘Experiences’ offering. This is where local hosts can provide unique, curated activities for guests. Considering the high satisfaction rates tied to these experiences, this represents a significant opportunity for growth.
Additional Services for Hosts and Guests
In his talk, Chesky also alludes to potential services that could be offered to both hosts and guests. Among these potential offerings, he mentions the prospects of an advertising platform for hosts, as well as a co-host marketplace. The latter envisions a connection between hosts seeking properties and homeowners with limited hosting availability.
Interestingly, this concept of a co-hosting platform isn’t new. Several weeks ago we broke the news that such a platform is already operational in select US states, and it has been active in various European countries for some time. However, the relatively vague allusions imply that Airbnb wishes to be discreet about it.
Moreover, for guests, Chesky envisions a range of services comparable to those found in hotels or resorts, indicating a broader scope for Airbnb’s evolution.
Utilizing AI and New Tech
Acknowledging AI as a generational shift in technology, Chesky sees vast potential for its integration into Airbnb’s future offerings, though he does not elaborate much on the specifics.
These initiatives are then prioritized based on the concept of “perishable opportunities,” emphasizing immediate action on the most promising and time-sensitive opportunities. For instance, introducing advertising on the platform is considered valuable, but not a priority due to its non-perishable nature.
Importantly, Airbnb is committed to maintaining a balanced ecosystem of hosts. It is crucial for the company to ensure new features or services, such as the proposed advertising platform, cater to the needs of all hosts – individual or professional.
Impact of Enhancements
The strategic enhancements in Monthly Stays yielded impactful outcomes during the quarter, as evidenced through:
- Surge in Year-over-Year Bookings: Notable rise in year-over-year bookings for monthly stays, reflecting heightened traveler interest.
- Preference for Extended Stays: Increase in guests opting for stays lasting three months or more, with June’s figures reaching approximately 25% of total monthly stays, compared to 18% in April.
- Rise in Monthly Discounts: Substantial growth in the percentage of new active listings offering monthly discounts, from 22% to approximately 50% since the 2023 Summer Release.
These strides in the realm of Monthly Stays underscore Airbnb’s responsiveness to evolving traveler preferences, demonstrating its commitment to providing a diverse array of accommodation options tailored to the needs of modern nomads.
BONUS: Airbnb, A Matchmaker?
Amidst its evolving role as a company, we can’t help but ponder if Airbnb might make a play for matchmaking for long-term stays, akin to finding roommates. This speculation arises from several interconnected factors:
- Airbnb’s broader mission to combat loneliness, a theme that has resonated prominently in their recent campaign alongside Gwyneth Paltrow.
- Airbnb’s existing offering of housing solutions through Airbnb Friendly Apartments, implies a potential alignment with the concept of matchmaking for co-living arrangements.
- Airbnb’s evolving strategy, including a focus on private room rentals and curated guest experiences, the notion of extending this to long-term, harmonious co-living arrangements feels plausible.
While this proposition is purely speculative, the convergence of these elements prompts us to envision Airbnb’s potential role in facilitating secure, well-matched co-living partnerships. This concept, resonating with Airbnb’s values of innovation and community-building, could offer a captivating avenue for the company’s future exploration.