Airbnb connects travelers with local people offering rooms or entire houses for rent – helping hosts generate extra income while also giving guests a more intimate experience than hotels can provide.
Airbnb has had a substantial positive impact on tourism and housing markets. Research into Airbnb focuses on its impact, trustworthiness, establishing house rules and the management of sharing economy platforms.
The Early Years
Brian Chesky and Joe Gebbia found it impossible to afford their San Francisco apartment rent, so they rented out their spare room as an innovative way of covering the expenses. Since 2007, this business venture has blossomed into one that threatens hotel industry profits globally.
Airbnb’s expansion from renting out spare rooms to becoming an international platform was driven by experimentation and trial and error, creating new mechanisms of creating value for guests, hosts and third parties alike. This process allowed Airbnb to refine and refine these mechanisms.
Airbnb prides itself on making accommodation booking an effortless process for its guests, yet meeting demand has proven a challenging endeavor. In response, they developed their “Superhosts” system which offers accommodation of the highest standards to help make sure guests can experience what has become synonymous with Airbnb – live like a local!
Airbnb has taken steps to mitigate risk and improve service reliability through several measures, such as allowing guests to verify their identities, offering guest guarantees, and creating local teams to address specific issues in different cities. In addition, Airbnb has developed a network of third party partners which provide hosts with 24/7 support in managing listings and guests.
Airbnb has employed various marketing techniques to increase brand recognition and gain new customers, including sponsoring TED talks and using social media channels such as referral links to drive referrals. They have also invested in producing original content such as magazine (originally called Pineapple) and short films for promotion of their service.
Airbnb has taken great care in tracking both costs and results for each tactic implemented, such as sending staff into markets compared with listing counts generated through Facebook ads. This data allows Airbnb to identify which marketing initiatives merit investing.
The Next Phase
Airbnb is one of the pioneers of peer-to-peer property rental, an innovative business model using digital platforms to connect guests and hosts. Through Airbnb’s platform, hosts can rent out spare rooms, apartments or entire homes directly to tourists visiting local areas; offering travelers an economical accommodation alternative while giving them a chance to experience local culture while having an inviting stay.
Early on in Airbnb’s development, they encountered various difficulties. Notably, their new business model attracted negative publicity due to sexism, racism and homophobia among some users; some cities even banned Airbnb rentals and fined hosters; as a result they changed their logo, often ridiculed for looking like genitalia; instead using more emotive words about belonging instead.
Airbnb also took steps to enhance their reputation by implementing a verification service for hosts, which allows guests to check whether or not a host is genuine and their listing matches what was described on it. They have also increased control over their community by permitting hosts to select which guests they book, as well as offering an in-built review system similar to mystery shopping (Dolnicar, 2019a).
Airbnb was in its second period, continuing its global expansion, and China became its primary origin market by 2019. Part of this growth was fuelled by investments made into local travel companies that could add diversity to Airbnb listings and Experiences, while Airbnb has also worked closely with non-profit organisations in cities where it operates to address sustainability concerns (Gallagher, 2017).
Airbnb has continued to reduce overheads by outsourcing technical services. For example, its website is hosted on Amazon Web Services which allows it to scale easily (Dolnicar 2018b). Furthermore, fees have been decreased by offering professional hosts and hotels the ability to opt out of paying guest fees; instead charging them an 14% service fee when reservations are made through their listings instead.
The Future
Airbnb was among the early pioneers of peer-to-peer property rental. Established by Joe Gebbia and Brian Chesky – two industrial designers who could not afford their San Francisco apartment rent – Airbnb quickly rose as an online marketplace that connected travellers attending trade shows with rooms they could rent at no additional charge – helping both cover costs while earning extra income in the process.
As Airbnb expanded, they strived to make their services more user-friendly and efficient by automating processes and interfaces such as payments and tax reporting (von Briel & Dolnicar 2020; 2021a).
Another goal was to enhance both hosts and guests experiences on Airbnb. Their website and app became more user-friendly with new layouts that helped people locate specific types of accommodation quickly by using markers (e.g. family friendly or accommodates pets) or curated collections. Airbnb also introduced Experiences which give guests the chance to pursue their passions or interests across different destinations.
Airbnb was initially successful through word-of-mouth marketing from users; however, as its growth increased it expanded through partnerships and acquisitions outside its core business (for instance acquiring HotelTonight for last minute hotel reservations and investing in multi-family apartments (Hamdi & Schaal 2019b).
Airbnb recognized the impact its activities had on local communities. Through partnerships with Carlson Wagonlit Travel and American Express Global Business Travel, Airbnb provided corporate travelers with Airbnb experiences (Gallagher 2017).
At this point, Airbnb began experimenting with and exploring various growth pathways. They entered agreements with housing conglomerates to allow them to sublet apartment blocks on Airbnb for short-term stays through its platform, while they partnered with companies offering ticketing solutions for tourist experiences to offer guests opportunities to check items off their bucket lists.
The Impact
Airbnb has made rapid strides in value creation and transfer activities since their founding. Their key business resources include their customised marketplace, trust-based relationships, extensive reviews tied to network member profiles, knowledge resources, as well as other knowledge assets that give them an edge over rivals who don’t possess such assets. Their value communication and distribution activities aim to maximize these key resources by monetising interactions between guests and hosts.
Airbnb has developed a multi-sided platform model (Rumble & Mangematin, 2015) to connect two sides of the market: guests seeking short-term accommodation and hosts with spare rooms or entire apartments looking to generate rental income through these rentals. Other stakeholders may be involved, including professional photographers who assist Airbnb and hosts in presenting spaces and listings in an appealing light; service recovery staff that assist hosts resolve issues with guests; as well as advertising campaigns which highlight Airbnb’s unique offerings (Gallagher 2017).
Airbnb continued its global expansion during this period, particularly in China and Asia-Pacific regions. Airbnb invested in OYO Hospitality Group of China to further improve their offerings to this crucial market, and increased listing activity across Europe (Schaal 2021b).
Airbnb also diversified its value communication and distribution activities in response to the COVID-19 pandemic, such as communicating benefits of staying at an Airbnb property as a way of mitigating risk and increasing safety (Schaal, 2020a). They encouraged hosts to implement stricter cleaning protocols during this pandemic by wearing gloves, masks, spraying surfaces such as door handles with disinfectant spray (Schaal, 2020o).
Airbnb’s marketing campaigns during the COVID-19 crisis focused on its position as a reliable brand compared to traditional hotels, further cementing their position and increasing guest bookings. Furthermore, using digital platforms and third-party software providers for payments and other functions enabled Airbnb to complete transactions quickly and efficiently when times were critical.
