airbnb marketing strategy dissertation

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Exchanging homes


Airbnb, founded during the economic downturn of 08, is among the many innovative businesses operating inside the growing distributed economy. Airbnb offers an option to the traditional motel business and allows homeowners, termed “hosts,  to advertise and hire their extra space, whether it be a spare place, apartment or treehouse. “Guests search through the Airbnb website, read opinions and interact with hosts to look for less conventional and, often more, cost-effective lodging. Key to Airbnb’s organization success is establishing a framework of trust on which both website hosts and friends can rely, a system Airbnb has developed by using a strong online strategy and through specific techniques that support host and guest over the rental procedure.

Building this framework of trust in the device is a emphasis not just for Airbnb, nevertheless is also common of a business operating in the modern sharing economy.


The sharing economy is a fresh economic chance for customers to access goods every time they are required at that time ” with access trumping ownership.

For example , when a person simply uses a car once a month, they could hire a car from a posting economy firm like ZipCar instead of paying out a monthly car payment for the car they will barely work with. Following the states, many Americans have become less inconsiderate in utilizing their economic resources. In addition , even more Americans will be expressing the in getting more socially conscious of green initiatives and also other social tasks (Neilson). These types of trends include resulted in a brand new focus on shared resources. Further than just the economic benefits, goodwill and community building are important drivers in the sharing economy. Today, people who feel the burden of the current monetary period might prefer to hire or promote to their colleagues instead of providing their business to main corporations.

Furthermore, the Consumer-to-Consumer (C2C) business design is enabling many individuals to use their own solutions to gain additional income with no high startup company costs and long-term dedication for business durability. Although the concept of sharing is usually an old thought, the ability pertaining to sharing to create profit is relatively new. The sharing overall economy is considerably influenced simply by online trade and social websites. Online business has made it easier forpeers to share their particular goods and services with one another using trusted financing services through websites such as PayPal. Social media provides helped pass on the financial and personal advantages of the showing economy and has offered as the essential marketing tool to get the growth of countless collaborative consumption corporations. Companies performing primarily inside the sharing economy consistently need their users to share their very own experiences by way of Facebook, Twitter and other social support systems. These social platforms have become so built-in in world wide web transactions that once a consumer has proved or paid out, they are motivated to immediately post their money-saving or perhaps moneymaking achievement directly to their very own social media webpage of choice.

Also known as collaborative usage, the cultural economy comes after the idea that persons will first use what they have, acquire, swap, make and thrift items before they actually purchase something brand new (Anderson). The marketers of such sharing economy companies mainly target a number of segments but are constantly broadening. Urban areas and members with the X and Y Years are essential demographics intended for the showing economy. Demographically, the majority of writing economy companies will target Generation Y due to their concern for environmental and cultural issues that influence their decision to save and reuse solutions (Kotler, Philip, and Kevin Lane Keller, Chapter 8). Statistics show which the newest era of adults buys fewer houses and fewer automobiles than its predecessors (Ciccone). Furthermore, Era Y is attracted to non-traditional practices including the sharing economic climate and is very social, able to spread the word.

Generation X is more likely to become those who are hiring out their very own goods and services. Since Generation Back button has more obligations, they take advantage of the extra income in order to them fund their obligations, such as kids and spending a mortgage. Individuals are collaborating informally in their neighborhoods out of both need and as a life-style choice. A sharing economic climate company should concentrate on personalisation, networking and experience to make certain its success (Olson). Branding is vital because showing economy corporations want consumers to have self-confidence in their brand. The posting economy is at an advantage, becoming relatively new using a market that is interconnected through online trade and social networking.

Outside of dispersing the work, a sense of community is made within the network. Finally, a sharing economic system company has to concentrate on client experience. Clients are looking for simplicity ofuse and product benefit. When these types of desires will be met, consumers will go back to use the services as well as recommend it in front of large audiences. One incredibly successful sort of a company while using sharing economic climate employing these types of factors is definitely Airbnb, whom in less than 10 years has built a serious competitor towards the centuries old lodge industry.


Brian Chesky and Joe Gebbia founded Airbnb in S . fransisco, when they commenced renting out airbeds in their apartment to people attending a local conference to build additional income in 2008. The early business design for Airbedandbreakfast. com, later on renamed Airbnb, focused on large conferences like the Democratic and Republican Conventions, which made bustling organization in the 08 election year. In 2009 the founders, at this point including Gebbia’s former roommate and technical wiz Nathan Blecharczyk, received $600, 000 in seed funding from Sequoia Capital. In that same year, acknowledging that hiring to complete strangers produced many persons uncomfortable, Chesky and Gebbia flew to New York City, house to many of their users, to meet with owners in person and survey intended for potential advancements.

This was an unusual strategy for an internet company but it really later turned out to be profitable. Over the next couple of years, Airbnb manufactured several important strategic changes that provided it path and force in the marketplace. Of particular take note was the organization of Airbnb’s broker’s payment model as well as the decision for growing professionals to photograph sponsor homes. By the end of 2011, Airbnb had gone international and reached essential mass (Geron). Forbes quotes that Airbnb likely suffered losses in 2012 in support of accelerating growth, a hit the corporation could tolerate due to the inflow of capital from numerous Silicon Valley investment capital firms (Geron). Their marketplace penetration can be comparatively solid, according to Tech Meltdown, with Airbnb’s booking expected to have exceeded that of Hilton in 2012 (Empson), and owners renting to a estimated 2 . 5 mil people according to the Economist (“All eyes for the sharing economy).

The Wsj valued Airbnb at $2. 5 billion dollars in October 2012, and Privco expected their earnings for that yr to be by $180 million (Melby). In exchange for customer support, website protection and several insurance and security features, Airbnb employs a broker-style payment model, taking a portion ofthe leasing price between 6% and 12% through the guest, with respect to the property selling price, and a 3% service fee from the web host (Geron). Airbnb has come into its own monetarily, while nonetheless maintaining an identity that, though not really especially anti-corporate, is certainly fresh, young and progressive. From the logo, with its big, curly lettering and informal design, to its focus on direct interaction with potential users, Airbnb has built the brand pertaining to the generation inspired by innovation.

The motto “travel like a human emphasizes the between the classic, impersonal, business travel encounter and the opportunity Airbnb reveals to users to build their personal systems with owners in remote places, at a lower cost. As is maybe to be anticipated with a web company, Airbnb relies heavily on social websites to create and perpetuate its brand id. A key part of the company company is the travel around experience. They will post a “traveler with the week prove Facebook, Twitter and Yahoo Plus web pages, and lately concluded a photograph contest using Instagram, with Airbnb travel around credits as the prize. While the selection of prize could possibly be a bit opportunistic, the active concept to work with the popular photo-sharing application, and the incentive both match well with all the Airbnb manufacturer and kept the focus upon travel instead of profit motive. Naturally, travelers’ blog posts that mention Airbnb, whether they focus on the company or perhaps mention that in passing, are often marketed through “re-tweets and blogposts on the Airbnb blog.

The expertise of travel is only one part of a company identity that is because carefully well-rounded and appealing as its users. Airbnb also emphasizes the interest in the favorite local activity with its “Living Local shows, a part of its “AirTV series. Each on the web episode comes with a tour of your unique Airbnb host real estate, and interviews with the generally personable host or hosts. Beyond that, Airbnb understands the appeal of its unique and tech-centric business model to anatomist and tech nerds. The corporation provides articles catering right to this target audience through its specific anatomist blog ” nerds. Airbnb. com ” and its Technical Talk Vimeo series, where young technology enthusiasts present on innovative new technologies and exactly how they can and therefore are being controlled to build businesses (YouTube). These kinds of videos, generally around one hour in length, offer an in-depth overview of current technological and business innovations.

Airbnb also uses social media to associate by itself with other businesses, not contrary to cross personalisation, whichestablishes Airbnb as culturally present and economically ground breaking while likewise eliminating the costs of a major advertising campaign. All their Facebook web page, for example , data SXSW, TED, Virgin America, Lonely World and Organization Punk since organizations that Airbnb “Likes.  All these associations tones up their brand ” Virgin mobile America links them to one more untraditional travel and leisure company and Virgin’s maverick CEO, Rich Branson, in whose appeal to young pros has made him by far the most adopted “Influencer upon professional social networking site LinkedIn (“LinkedIn Today: Top minds, big ideas).

Similarly, their very own public connection with SXSW reveals a cultural affinity in line with those of their clients, and features in tandem while using demand for accommodations during the festival, to which Airbnb has committed a specific area of their site. Through these initiatives, the company offers branded alone as youthful, innovative and culturally and technically savvy”all traits that exist outside of its travel-focused income stream, nevertheless which are inherently appealing to the clientele, equally hosts and guests, which Airbnb depends.


Airbnb’s business model targets consumer-to-consumer (C2C) transactions based on trust. The model is just like the popular C2C marketplace of eBay exactly where buyers and sellers participate in transactions that are each evaluated by individuals for their standard of risk on such basis as detailed information, history, product, price and other resources. Nevertheless for Airbnb, the relative standard of investment intended for guests and hosts can be significantly larger on a per transaction basis. Travelers are jeopardizing their holiday experience, basic safety and in most all cases, a relatively bigger dollar value than a individual item purchase. Website hosts are offering their very own homes, all their personal personal privacy and their personal safety, and their living experience to get the time that their place is anchored by a visitor. With these types of personal purchases of mind, the success of Airbnb’s capability to instill assurance, trust and safety throughout their network was essential to the achievement of the company.

Airbnb’s roadmap to build security and safety for their tenants includes a exclusive messaging system that allows users to learn about each other ahead of booking when holding private data to be revealed at a later time. Another system is Airbnb’s “verified ID badge in which users willregister their social networks such as LinkedIn, Facebook, Airbnb reviews and official documentation from their photo ID and passport. With the verification of of these assets matching up, those users will receive a “Verified ID badge with their account information showing to other users that all their identification continues to be vetted. In April of 2013, Airbnb began at random selecting users to finish this profile and have this expanded worldwide for all Airbnb members in the near future.

Over the last two years, Airbnb has made attempts to increase their resources to expand reliability and sustain the rely upon the marketplace simply by doubling how big their customer service staff with 24×7 support, creating a committed Trust & Safety department and building tools to verify user profiles and facilitating richer communications between guests and hosts just before booking. With these standard features, the usability, persistence and accessibility to hosts as well as the Airbnb support team continue to be critical characteristics to Airbnb’s service roadmap. Although, when ever travelers will be “shopping there is also the responsibility of maximizing their very own use of these tools and be careful in evaluating their own deal risk by perusing sponsor profiles, evaluations, social networks as well as connecting using their host on a regular basis.


Owners are just all the Airbnb’s consumers as guests so whilst they must inspire guests in which to stay an individual’s house, Airbnb need to simultaneously encourage trust and confidence in the Airbnb style for hosts. Airbnb’s activities and relationships with owners and potential hosts are made to project an image of control, confidence and community intended for the host, with a particular focus on accomplishing this administratively, monetarily and socially. To simplify and focus the hosting process, Airbnb manages each of the administrative capabilities of becoming a number, which provides an assistance system and protection for the web host and his or perhaps her house. Rather than having hosts develop a new website for their local rental, the site is created (in multiple languages and currencies) and all he or she must do to begin with is make a profile. Airbnb has a free customer service crew to help first-time hosts understand the process. When Airbnb causes it to be clear on their website that understanding tax and legal position for owners is theresponsibility of the web host, Airbnb provides reference documents and answers to common questions on their website.

Although Airbnb maintains the site architecture, website hosts are in complete control of the leasing price, services and residence rules. Airbnb in some cases will even offer cost-free professional picture taking for sponsor properties. A secure on the web payment system is made into the web page to guarantee finish, on-time payment directly to the host (“Why Host). Owners are essentially allowing a stranger to their home (or boat, treehouse, etc . ) so a feeling of control is vital for their self confidence in this style. To do so, Airbnb creates devices to offer safety to hosts’ persons and property. Hosts have total control over who also rents their listing. A potential guest places in a booking request throughout the online program and then the host provides 24 hours to simply accept or decrease the demand. During this time the host and potential customer can connect through the site communications program and reference the aforementioned “verified ID system. However , the rental talk about is not given out before the owner accepts the customer and hosts also have access to the 24-hour customer service hotline (“Trust).

Seeing that most hosts are booking primary houses or rooms, protecting against potential damage is more important than if this is a hotel or business. While normal renters’ or homeowners’ insurance is the responsibility of the host, in 2011 Airbnb launched it is “Host Guarantee property protection program. In-may 2012, it took insurance underwritten by Lloyd’s of Birmingham to extend the Host Guarantee to about $1 million in property injuries. This covers guest damages beyond the scope of “reasonable use and tear in 23 countries. Zero additional cost or actions are required pertaining to the host to have this kind of protection (“Guarantee). The financial incentive is known as a key reason people become hosts. Within a survey of members of Airbnb in San Francisco in November 2012, over 90% of owners rented their primary houses to visitors and spent almost fifty percent the income they manufactured on bills (Lawler). To encourage even more people to become hosts also to support existing hosts, Airbnb also targets facilitating the financial aspects of renting. First of all, it is liberated to create a real estate using Airbnb.

For on the web payments, the guest submits payment as soon as the reservation is accepted Airbnb techniques and collects the payment in full. Airbnb holds the payment until 24 hours following check-in (and after the guest-host walk through). This helps uphold host termination policies and provides a natural third-partyfor monetary exchange. The Airbnb internet site also encourages cleaning costs which are placed until the house is left. The protect payment of fees and usage is a key method Airbnb forms confidence for hosts besides the social and cultural aspects of hosting. Even though the first purpose most owners decide to lease their space is economic, another reason is a desire to find new friends, show off their particular city and be part of the shared economy.

Airbnb allows hosts to book primary and secondary houses, but 50% of hosts rent personal rooms inside their residence whilst they are right now there (“Life). Around the Airbnb site, there are numerous discussion boards and tutorials for people to understand about becoming a host, exchange ideas and form a deeper community within the posting economy. The social community built in Airbnb, plus the economic and management support devices, encourage new and repeat hosts to spread out their homes and lives up to the world because they trust in the brand and system created by Airbnb.


Airbnb’s accomplishment did not come without the anticipated growing aches of any kind of startup firm, and especially 1 commanding a dominant market share in the fresh sharing overall economy. While its effect on the tourist trade, individual income, earnings to small businesses and economical stimulation happen to be remarkable, the personal price a lot of people have had to spend using Airbnb’s service is important not to neglect. From city-issued sanctions to individuals violating rental regulations, to vandalism of private property and identity theft, the safety, benefits, opportunity costs, and durability of Airbnb’s service has been questioned inside the media. To alleviate some of these concerns and stay a viable business, Airbnb ought to examine these types of obstacles so that you can institute awareness through the community. They can continue to find ways to give a more extensive and scrutinized ID confirmation process for every their users to minimize the presence of bad apples.

The degree of care that hosts place on evaluating their very own individual purchase risk and understanding of rules specific to their city has a direct effect on their protection and success as a great Airbnb sponsor. Through buyer forums, hosts, guests, and potential consumers and guests can speak on a network to learn using their peers. Airbnb should also consider expanding the countries covered and the things covered beneath the”Host Guarantee to increase number protections in your area and internationally. Moving forward, Airbnb has to be aware about the popular problems fellow writing economy corporations have confronted. In a Campbell Mithun study, consumers were concerned with this, in descending order: The things i lend might get lost or stolen, I would not trust others inside the network, my personal privacy could be compromised, writing is certainly not worth the time and effort, and the goods or services might be of poor quality (Olson). As referred to above, Airbnb has taken necessary measures to help guard the safety and privacy of its web host and guests. However , since the sharing economy evolves, this could attract more difficult and new security concerns may arise that Airbnb will have to resolve quickly.

Collaborative consumption represents a significant economic, social and social shift as it moves away of childhood and toward acceptance. These firms need to locate the balance between the potential with the sharing economic climate and the standing regulation of the government. The current physical companies which can be participating in highly-regulated industries just like hotels or perhaps rental cars now have to take on services which in turn not have the same strenuous levels of inspection or requirements to ensure public safety (Lawler). Sharing economy companies will certainly make a solid argument for self-regulation. Airbnb is going to take care that they can currently have the right management to assure there are no nefarious functions in their business dealings which their brand is sufficiently strong to self-regulate (Lawler). For the well-rounded way, shared economic climate companies should look towards at least be aware of how the government may impose rules to see the way they might help or perhaps hinder Airbnb’s progress.

There will be a time when ever companies like Airbnb will have to defend all their unconventional and minimally governed services, and should now put into place a crew that can guard them. The lobby municipal and state government authorities in large usage areas is a more traditional but still relevant area for Airbnb to protect its business model and by extendable its users. The very best advantage that collaborative usage has the moment defending their particular stance to the economy is that they exist to help people in their neighborhoods to meet all their goals (Metcalf, Warburg).

These companies need to power their community-based benefits in order to gain support and appeal to those wanting greater govt intervention. Prep and comprehension of user demands, government regulations and economical trends will certainly bridge the nascent sharedeconomy into a strong, sustainable financial force. Therefore , if Airbnb continues to focus on building a company that buyers can trust in and produced mechanisms to compliment hosts and guests it can be a tough, profitable business for years to come.


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