Week 3 Assignment
January 7th, 2017
Dustin M Zingale
West Texas A&M University
If you have ever searched for a rental house to stay at on vacation, you have possibly encountered Airbnb. They are a peer-to-peer vacation rental website that took the world by storm by their creative marketing and advertising. The rentals include apartments, villas, houses, and even castles for a one of a kind travel experience at competitive prices. They have 550,000 listings in 33,000 cities and 192 countries and the number keeps growing. They struggled in the beginning and, using their own innovative marking strategy, they beat the competition. Their strategy involved the “7 Ps;” Product, Price, Place, Promotion, People, Process, and Physical Evidence.
Since Airbnb is a business to business market, their platform is to help customers book and advertise their hotels, hostels, and other types of vacation accommodations. Their two customers are hosts and travelers. For the travelers, they offer the easy-to-use platform and searchable database to find the perfect accommodations during their vacation. They also help travelers find unique experiences such as cooking and art classes, scuba diving, etc. For the hosts, there are two options; list their property for rent or list an experience that they can offer guests. Their product also offers protection and cancellation plans for both hosts and travelers. Airbnb acts as a broker by facilitating all communications and transactions between the traveler and host through the platform.
Airbnb makes money by charging service fees from the hosts. They do not collect any fees from the travelers. Travelers are charged by the host at the end of the service provided, whether that be renting a place to stay or any other kind of activity. They charge 3% from the host’s profit that is ultimately paid by the traveler. They also have a variety of cancellation policies. This makes the pricing and charging of their services easy and understandable.
Airbnb was started in San Francisco in 2007. The owners and founders of Airbnb turned their living room into a bed and breakfast. They created a website and eventually expanded to other spaces and properties like homes, apartments, castles, boats, etc. All of these properties can be accessed by all internet enabled devices since they have a mobile option as well as a traditional webpage.
Promotion is Airbnb’s greatest strength. Airbnb uses a variety of marketing channels. They heavily rely on Google. If you search for vacation rental homes on Google, Airbnb is most likely to show up first or near the top results. They use traditional and digital marketing. Their main strategy is to make the traveler feel they will ‘live like a local.’ They use social media tools and analytics to reach their target audience for the various properties listed on their platform. They also engage heavily in public relations. This year, they offered free stays to people displaced by Hurricane Harvey, thus engaging in cause-related marketing. They make their brand visible by sponsoring a variety of events and partnering with other agencies.
Having 200 million travelers and hosts, they have about 3100 employees that are stationed worldwide. The employee’s primary responsibility is Airbnb’s service delivery (collecting the fee from the host). There is an improvement opportunity I did find, however. They offer very little direct customer service. If the hosts or travelers have any issues, they only have two options; go to the help center’s Frequently Answered Questions (FQAs) or email. There is a lack of on-the-phone or physical customer service.
Airbnb is a combination of personnel and property verification and processing. The travelers are required to verify their identities before they can start booking their visits and stays. The hosts must also verify their identities and their property. Airbnb has some requirements on how the pictures of their properties should be taken. These requirements help the host promote the hosts’ property and also makes the platform look much more professional to visitors, attracting more travelers to use Airbnb. Using the platform is a one-stop-shop. The travelers can contact the host directly, finalize the booking, check out, and pay all through the platform. If the traveler or host want to cancel the booking, they will just need to follow the cancellation policy.
Airbnb does not have any physical location that the traveler or the host can visit. The entire process takes place through the platform. Airbnb makes very little if any customer service contact with the hosts or travelers. The mobile application is rated 4.7/5 on the Apple App Store and 4.3/5 on the Google Play Store. The hosts and travelers do not review Airbnb themselves, they can only review the other party. This can help Airbnb make any changes to their platform to increase the customer’s experience.
All of the past 7 marketing strategies are worth mentioning and discussed because Airbnb is doing very well compared to their competitors. They pass each category decisively, only a couple of my own recommendations. There is heavy domestic and international competition, such as Homeaway, Interhome, and Novasol. Nevertheless, with the men and women working for Airbnb discovering new and innovative ways to increase the positive customer experience, they have produced a platform that can successfully serve the massive number of visitors.