Airbnb Strategy Analysis- Phase 1

Internet Marketing 455

Professor Reza Rajabi
By Lindsey Foster, Amanda Karpacz and Charles Foster
 EXECUTIVE SUMMARY

Airbnb is a user to user platform allowing consumers to both rent and rent out property.

Enclosed within are the history and background of Airbnb, a company started in San

Francisco and is now a global brand. An analysis of their business model, and how

offering a platform for user to user rentals, disrupted and changed the lodging industry. A

look at the company and its potential for growth and areas of weakness were conducted

through a SWOT analysis.

We continue with both analysis of the company website, diving into what is and isn’t

working and competitor analysis. Specifically, we dissect the way Airbnb changes the

traditional lodging industry and created a new segment with alternative lodging. Further,

research was done using company released data, trusted news outlets, and industry

literature.

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 Table of Contents

Executive Summary…………………………………………………….……………. 1

Airbnb Background & Events…………………..………………….………………… 3

Business Model………………………………....……………………….…………. 12

SWOT Analysis…………………………………………………….…………………. 15

Competitor Analysis………...………………………………….…………………. 15

Website Analysis…………………………………………………….…………..……. 15

Conclusion……….………………………………………………….…………..……. 3

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 AIRBNB COMPANY BACKGROUND

Airbnb is an online community lodging marketplace, connecting hosts and travellers

across the globe. It was founded in August 2008 and is based out of San Francisco, California.

The travel site allows hosts to market their available housing space and provides travellers with

thousands of unique listings of places to stay in over 65,000 cities. In November of last year,

Airbnb debuted an “​experience”​ service, offering exclusive experiences from local experts,

including activities such as, “Ride with a Pro on Exclusive Trails,” or, “Discover a local Tuscan

Farm.” (“Airbnb”). This decision allowed Airbnb to expand its reach in the tourism industry,

moving from being solely a lodging provider toward becoming a one-stop destination for

travellers.

Airbnb was founded by friends Joe Gebbia, Brian Chesky, and Nathan Blecharczyk, after

Gebbia had the simple idea to house designers during a nearby conference to help pay for rent.

Roommates Gebbia and Chesky created a simple website and hosted three guests, charging them

a small fee for basic amenities. Gebbia and Chesky ended up showing their guests around town,

and when reflecting on the experience during an interview, Gebbia said that despite the

simplicity of it all, “[The guests] loved it. And so did we.” (“How Do You”, 2016). This

experience marked the beginning of a journey that would transform this humble business into

one that is now valued at $31 billion (Thomas, 2017).

Airbnb operates under a relatively simple business model, providing value to both hosts

and travellers, while profiting from both groups. Airbnb’s C2C platform allows hosts to collect

rental money when a traveller selects their listing, while also showcasing unique and affordable

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listings to travellers all over the world. Airbnb “operates as a transaction facilitator” between

these two groups, and charges guests 6-12% of the booking fee in addition to charging hosts a

3% service charge for each booking (“Airbnb Business Model”). Airbnb is not currently

offering stock, but is expected to go public in either quarter four of 2017 or quarter one of 2018

(“What is the Airbnb,” 2017).

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 AIRBNB BUSINESS MODEL

KEY PARTNERS

Airbnb’s key partners include their Investors in Airbnb, Photographers that take photos of the

property, guests who rent rooms and experiences, hosts who rent out their home or rooms, and

payment processing services. Lastly, Airbnb has partnered with Facebook and LinkedIn to verify

user’s identities.

KEY ACTIVITIES

Key activities include advertising to gain awareness for both hosts and renters. Building a

network of loyal hosts and customers to use the C2C product. Controlling quality of services by

managing comments and reviews. Using search engines to gain customers who look for different

keywords.

KEY RESOURCES

Key resources include the network and servers that all the data and information from Airbnb’s

site and app. Their information and data history from users previous interests and purchases is

kept in big data. Their hosts in a vast variety of locations that keep the business running is also a

key resource.

VALUE PROPOSITIONS

Airbnb offers a convenient alternative to a hotel that is easy to use and navigate in a variety of

locations. They offer lower prices and a different kind of experience when it comes to traveling.

Hosts have the opportunity to make money by renting out a room or home on something they

already own.

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CUSTOMER RELATIONSHIPS

Airbnb offers 24/7 customer support, this is essential when dealing with the travel industry so

users can feel secure and confident that Airbnb will help them if they need it. Airbnb offers

customized recommendations that are tailored to the user’s needs along with discounts and offers

for recommending Airbnb to friends and family. Their review system is essential to

communicate by leaving reviews and sharing your experiences.

CHANNELS

Airbnb mainly uses web browsers and their mobile iOS and Android app to access consumers.

Both of these channels have an advanced user experience to make it convenient for the

consumer.

CUSTOMER SEGMENTS

Segments can be broken up into cost sensitive travelers who are looking for something cheaper

than a hotel. Business travelers who want a different experience and better amenities, hosts who

are interested in providing rooms for money, and people who want to discover authentic travel

experience by immersing themselves in the culture.

REVENUE STREAMS

Commission from both the hosts and the guests on booking. Airbnb charges guests 6-12%

reservation fee and hosts a 3% fee when their room gets booked.

Airbnb SWOT ANALYSIS

STRENGTHS ● Unique opportunity for lodging due to the

ability to meet locals and receive

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 recommendations from them

● Clear revenue sources (charges a fee from both

travellers and hosts)

● Brand is well recognized and well known

● Brand is associated with open-minded, trendy

travellers (positive association)

● Prices are very competitive as compared to

most hotels

● Huge user base: 150 million users, 4 million

Airbnb listings (Smith 2017)

● Global company: active in 65,000 cities and

191 countries (Smith 2017)

● Dual rating system for hosts and travellers

results in people trusting Airbnb

● Respected for its innovation in the hospitality

market through the creation of a shared

economy

● Network Effect, the more people use Airbnb

the more value it gains through reviews and

word of mouth.

WEAKNESSES

● Airbnb operates in a fiercely competitive

market due to the vast number of options for

travel lodging

● Airbnb has to cope with disagreements

between hosts and guests and this

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 responsibility demands time and money

● Airbnb runs the risk that hosts may act

unprofessionally or even illegally, thus risking

their reputation

OPPORTUNITIES ● There has been a recent push for “educated

travelling” and Airbnb could be a leading

company in this trend as it offers the

opportunity to both meet locals and learn from

them through its ‘experiences’ service

● Customers dissatisfied with hotels’ pricing and

overall experience may turn to Airbnb as an

alternative

● Airbnb still has many cities that they can

expand to, furthering growing their reach

● Potential to partner with other travel related

services in the future (i.e., rental cars, airlines,

city tours, excursions etc.)

● Potential to grow in popularity amongst older

age groups as the idea of the sharing economy

becomes more popular and accepted and

● Growing number of travellers who want a

more exciting, unique experience as compared

to a hotel

● Potential to convince more celebrities to put

their mansions/vacation homes on Airbnb,

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 increasing press and resulting in more people

talking about Airbnb; celebrities including

Mickey Rooney, Elixabeth Taylor and more

have already done so in the past (Bukszpan

2015)

THREATS ● Hotel associations are lobbying for laws to be

passed to regulate and limit Airbnb on the

grounds that Airbnb hosts should have to

follow the same rules and regulations placed

on hotels (Benner 2017)

● Growing competitors such as 9flats.com

● Illegal activities on the hosts’ parts could

damage reputation and lead to more and more

costly lawsuits

● Possibility of another disruptive lodging

company to reduce Airbnb’s market share in

the future

● Growing number of high quality hostels, and

growing popularity of hostels amongst

millenials, one of Airbnb’s most successful

markets (Mohn 2016)

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 Competitive Analysis

Airbnb occupies the vast majority of consumers minds when it comes to user to user

rental. Yet, that does not mean they are without competition. Airbnb has been a disruptive force

in the lodging industry, competing with not only hotels, but new competitors looking to copy the

Airbnb model of alternative, in home lodging. In the lodging industry only Marriott has a higher

valuation than Airbnb’s $31 billion, at $39 billion (CNBC). In the alternative lodging sector,

booking.com, a subsidiary of Priceline with a much larger company valuation of $89 billion,

have been rapidly expanding their offerings on alternative lodging, offering more than 650,000

properties for rent. That is an increase of more than 50% year over year for the company

(CNBC). Though a large increase, this doesn’t match Airbnb’s more than one million instantly

available locations worldwide (Airbnb). Looking at the traditional hotel market, the lodging

industry is attempting to limit Airbnb’s impact in major metropolitan markets throughout the

country with lobbying through the American Hotel and Lodging Association, which operates a

$5.6 million budget (NY Times). The hotel industry recognizes that Airbnb’s rapid growth and

cheaper, more personal options are a threat, one with more properties available to book than any

other company. Emerging competitors such as HomeAway offer a substantially larger threat to

Airbnb, as they can match the pricing and locations as an alternative lodging company. Being

able to keep the platform user to user means lower upkeep costs for brick and mortar buildings,

and more savings for the customer. To stay ahead of the competition Airbnb is rolling out

experiences and restaurant bookings, something not offered but any other alternative lodging

sites, and moving even further into a service traditionally controlled by hotels

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 WEBSITE ANALYSIS

Item # Title Results of Analysis Interpretation

2-1 Opening websites in Airbnb works on all Airbnb is making their website usable for all
different browsers browsers with no problem browsers so it is easy for anyone to use.
Chrome, Safari, Firefox,
Smartphone, Tablet, and
Microsoft Edge. Format is
usable and clear on all
browsers

2-2 Response Time Airbnb received a B in Airbnb has a fast response time so people will
response time, with a grade follow through with their actions of browsing
of 80. It took 3.41 seconds the web page and potentially booking a room
for the page to load, which or experience.
is faster than 47% of other
websites. Compared to its
biggest competitor,
tripping.com, received a
grade of 74 taking 4.32
seconds to load.

2-3 Conversion Path 3 Goals: ​Get customers to Airbnb works to make it quick and easy for
book a room, create an customers to follow these conversions paths.
account and putting up a Making an account is important to maintain
customer loyalty and acquire customers.
room to have customers rent
Booking a room is essential to gaining revenue
out and keeping the business succeeding. Lastly,
Rental-​ Varies > ​123 they try to make it as simple as possible to rent
Seconds, 6 clicks out rooms since it is a C2C business. They still
Homepage > Fill in Travel need to follow security steps to keep it safe
Details > Search > Click on yet, they work to simplify it as much as
Rental > Compare Rentals > possible so people are inclined to rent out
rooms.
Book (or contact host and
then book)
Account Creation​- ​45
Seconds, 5 clicks

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 Homepage > Click Sign-Up
> Enter User Details >
Confirm Sign-Up
Renting Your Property-
576 Seconds,​ clicks too
many… about 45+
Homepage > Become a Host
> Host a Home (or Host an
Experience) > Input info
about room > Get Started >
Login… etc.

2-4 Essential Sections Airbnb has: ​About Us, Sign Airbnb has all the essential sections to make
up/Sign in, Search bar, the experience transparent and easy to
Logo, Help, “Become a navigate. The Search bar is near the top
because the whole experience is about
Host” how to, trust & safety,
searching for rooms or experiences. They have
travel credit. a trust and safety button because the business
concept is different because people are putting
their lives in the hands of strangers. It is
important to be transparent in this business
and it shows that the company cares about the
consumer and wants to help them through the
whole booking and host process.

2-5 Principles of UI Follows the principles of UI The Airbnb website strongly follows the
through the use of colors principles of UI. Each website page is well
and design. organized and instinctually easy to use and
follow. The search bar is located at the top,
while the search results are structured in block
format with compelling images to represent
each home or experience. The website breaks
up the different options of finding a rental, an
experience, or a restaurant. This organization
is essential to separate the different choices
you can choose with Airbnb. The colors are
consistent follow a white background, grey
text, salmon buttons/logo, and the seafoam
green images and shapes. These colors are
very consistent when buttons represent

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 different actions. All the titles and text are a
dark clear grey that all match the same font
but varying in styles of the font. The salmon
color that is used in the logo is correlated with
buttons related to booking rooms and making
purchases. The seafoam green is used with
customer reviews and seeing more options on
details and descriptions of rooms.

2-6 Color Consistency Highly consistent The salmon color of the logo is present
throughout, especially with booking and
rentals. Blue is a secondary color used for help
and other services.

2-7 Website Banners There is a small, concise Airbnb wants to help customers navigate and
banner at the top of the travel the site. Focusing on keeping the banner
website, it features 2 lines, small and and in a singular location will help
do that. Noticeable when needed but out of the
top line being search, sign
way so the site can be the main focus.
up, and help and the lower
being experiences,
restaurants, and rentals.

2-8 Social Media Links Bottom right corner of Social media isn’t as big for different areas of
webpage has social media the site. Their social media platforms create
links. After you click on an awareness of their rooms and experiences.
They seem more like advertisements rather
experience for more info,
than a different method to gain followers.
they have social media links
under the experience photo
so that you can share it on
social media. There is a
share button to share a room
before and/or after you book
a room

2-9 Ease of Sharing via Sharing allows you to show Airbnb made it easy to share their pages so
Social Media the landing page for that people will promote their site and spread
different experiences or the word online.
brings you to airbnbs social

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 media pages. It is simple, as
there are links to share.

2-11 URL patterns URL remains consistent Airbnb’s code is organized, clean, and precise.
throughout the site.
Different areas all break
down with the same
groupings, airbnb.com/ and
then
airbnb.com/experiences/ or
/restaurants etc

2-12 Basic Site Design -Font size: 3 sizes, headings The site is organized, and not overly flashy.
are largest (around 20 pt.), The images of the activities/rentals are the
secondary headings (around center focus---not the headings or text. This is
14 pt), and body text likely to draw the reader to the content which
(around 12 points) will lead to a sale and not to distract them with
-Positions of words in the other information, especially on the home
webpage: Most text is page.
aligned left, except for the
menu options which are
located on the right side of
the banner
-Webpage title: “Explore
Airbnb”, aligned left and is
the regular heading size
(around 20 pt)

3-1 Android and IOS -Airbnb has both Android Airbnb is highly available through the two
Apps and IOS apps biggest app platforms. This give customers
-Air BnB app description: maximum accessibility.
“Unforgettable ​trips ​start
with Airbnb. Find
adventures ​in faraway
places or your hometown,
and access unique homes,
experiences​, and ​places
around the ​world​. Book
everything your trip needs,
or start earning money as a

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 host.” Same of IOS and
Droid

3-2 App’s UI Their app’s user interface is Their app is essential to the experience of
well created the apps Airbnb. They need to have it functioning well
function well on both for users to continue to use it.
androids and iOS devices.

3-3 App Functionality With a 4.8 IOS rating and The app performs all functions you would
4.3 Droid rating, the app is expect and need. The app is both reliable and
known for stability and ease easy to use. The biggest complaint is on
of accessibility as seen in Android, certain user face login issues.
reviews Though only affecting a small portion of
customers it's important to continue to work
on and update the app.

4-1 Domain Rank Global Rank 332 Airbnb is a well traffic, globally used website.
US Rank 121 It is one of the first sites user go to for
Travel & Accom. Rank 2 accommodations, and shows the brand Airbnb
has built. Airbnb competitors are not ranked
Homeaway.com on websites for their domain. They have
Tripping.com minimal traffic and people do not go to this
site over Airbnb.

4-2 Daily Time on Site 4:00 minutes 4 minutes is definitely enough time for a user
who knows what they are looking for to log
on, compare a few rental options and book so
this time is not bad for Airbnb. It takes less
than a minute to create an account or book a
room. This gives people the opportunity to
search and browse for rooms or experiences as
well. It is likely that people who do make
purchases spend a longer time on the site but
this average is probably lowered by people
who go to the site and leave soon after.

4-3 Daily Pageviews per 5.62 This statistic is OK for Airbnb if a user is
visitor coming on the site simply to book a rental and
they know what they are looking for because
this process can be completed in 5 clicks. If
they are looking to become a host this will
take far more than 5 clicks.

4-4 Bounce Rate 31.00% Airbnb’s bounce rate is pretty typical for
similar companies. Expedia, a major

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 competitor, has a bounce rate of 29.3% which
isn’t far off.

4-5 Search Traffic 22.4% Roughly a quarter of traffic is search traffic,

and when combined with performance in other
traffI've sources, you can see people are
effectively finding Airbnb when looking for
the type of service Airbnb provides.

4-6 Top Search Engine 1. Airbnb (38.69%) Although 30.12% of Airbnb’s traffic is from
Keywords 2. air bnb (1.15%) search sources, the 5 top keywords are still
3. Air (0.24%) airbnb, air bnb, airbnb.com etc. This shows
4. airbnb seattle (0.21%) that people are aware of the company’s name
5. airbnb chicago (0.20%) and are trying to reach the website directly,
they just may not know the exact URL to
reach the website.

4-7 Upstream Sites 1. ​Google.com​ (29.5%) Most users come from Google, showing
2. ​Facebook.com​ (5.4%) effective placing ads and well used keywords.
3. ​goeuro.com​ (2.5%) Facebook and Youtube show that users are
4. ​Booking.com​ (2.1%) coming to the site from social media. People
5. ​Youtube.com​ (1.6%) are seeing trips and ideas for adventure and
turn to Airbnb to make it happen.

4-8 Number of Apps Google Play: 10-50 million App data is becoming more restricted,
Downloaded Apple: ??? companies don't offer much information, and
neither do 3rd party analytics sites. Airbnb is a
top rated app for travel and

4-9 Number of Social Facebook: 9.3 million The number of followers Airbnb has on each
Media Followers Instagram: 2.4 million of the social media sites correlates with each
Twitter: 626 thousand of the sites popularity. Airbnb uses its social
media to promote its Airbnb magazine, and
feature top hosts/experiences/rentals to keep
its community excited about travel
opportunities. Airbnb’s facebook is also “very
responsive” to messages; according to its
Facebook pages 616 people messaged the
page this week (10.24)

4-10 Estimation of 1,005,000 daily Airbnb has consistent traffic, with ebbs and
daily/monthly/unique ~30,000,000 monthly flows during holidays and other large events.
visitors

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4-11 Traffic Sources Direct - 46.37% Almost half of Air BnB’s traffic comes from direct
Referrals- 15.95% traffic. Direct traffic can range from bookmarked
Search- 28.28 pages to direct URLS. This traffic is likely caused
Social- 3.50% by users who send links to others to view certain
Mail- 5.45%
Air BnB’s listings or just the website in general.
Display- .44%
People may bookmark and save certain listings
that add direct traffic. Air BnB’s mobile app drives
direct traffic, they have a superior design and user
experience on their app. It is a well recognized
brand, it is the first link to come up compared to its
competitors.
Although 30.12% of their traffic is from search
sources, the 5 top keywords are still airbnb, air
bnb, airbnb.com etc. This shows that people are
still aware of the name and are trying to reach the
website directly, they just may not know the exact
URL to reach the website.

4-12 Blog? Yes. Airbnb’s blog features a variety of resources

for both hosts and travelers. Posts include
topics such as, “Answers to your top search
questions,” “Link your Airbnb calendars,”
“Faster Access to Customer Support” etc.

4-13 Pop-ups None Airbnb does not use pop ups on their site,
instead leaving the user to navigate and
explore on their own.

4-14 Referral Links Top referrals are through

sites aggregating different
rental websites, this is
unpaid referral, airbnb also
offers incentives to current
users when they refer others
to the site. These would be
paid referral. One of the
companies PrimeWire is a
movie streaming site, likely
paid for referrals.

4-15 Tag Analysis “Unforgettable trips start Airbnb works to create an unforgettable
with ​Airbnb​. Find experience anywhere you choose to stay. They
adventures nearby or in work to transform the room stay at in any
faraway places and access culture.
unique homes, experiences,

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 and places around the
world.”

5-1 Google Ads (Airbnb Airbnb as well as all of its Though the competition varies, Airbnb has
vs. competitors) major competitors use good traffic from Google ads, and use clear,
Google ads. related meta-data tags and descriptions
relating to product or experience.

5-2 Website keywords Hosts to rent home- Keywords

Airbnb, how to make Vacationer- ​ Airbnb, beach, ocean, city,
money, easy cash, easy travel, Europe, destination, Asia, Middle East,
money, ways to make quick Australia, South-Pacific, tropical, pool,
cash, renting out room, relaxing, getaway, inn, bed & breakfast, hotel,
renting out home, becoming accommodation, rental, scenic, remote, resort,
a renter, bed and breakfast, ocean-view, private room, unforgettable
spare room uses, fast cash, Price-Limited​- Airbnb, inexpensive stay,
how to generate business, discounted rental, cheap room, underpriced
side jobs, make money experience, discounted week-stay, cheaper
outside job, gain consumers, than hotel options, discounted vacation,
how to gain vacation guests, on-sale opportunity, cheap vacation, sign-up
b and b, renting property, discount, cheap rental, tropical sale, beach
become a host, generate getaway sale, affordable vacation, secret trip
traffic, become a top airbnb ideas, best-deal trips, inexpensive vacation,
host, experience, relaxing worth your money, vacation steals,
home, vacancy, empty inexpensive rental, discounted prices, cheap
rooms. vacation, low-price trips.

Experiences- ​Once in a
lifetime, world, fun, local
events, undercover
experience, hidden
experience, unique, travel,
explore, embrace, sail,
swim, boat, rent, wine
tasting, travel, pictures, rare,
local, bike, city, hike, tour,
unbelievable, custom, enjoy,
immersive, concert,
unforgettable, visit, unwind,
learn.

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SUMMARY

Airbnb is a global company, partnered with some of the biggest companies in world like
Facebook, LinkedIn, and Twitter to ensure the safety and security of guests. They operate as a
platform for users to connect, experience, and live all over the world. By putting customers in
contact with one another and offering excellent customer services Airbnb can give those looking
for something different in their travel and accommodation just that. Airbnb has been able to
change the way people stay.

Airbnb has many opportunities to expand and grow the core of their business. Experiences and
restaurant reservations are just a few ways Airbnb is moving beyond lodging. New threats appear
every day though, as more sites like Home Away and 9Flat move into and expand in the
alternative lodging market. Traditional hotels continue to update to match Airbnb and offer new
more millennial focused hotels. They work to produce new legislation to stem illegal Airbnb use.
Yet, airbnb continues to grow and with their superb apps and connected and loyal customer base
are positioned to continue to do so. As long as a consistent, easy to use, and affordable stay is
what Airbnb provides, the brand will continue to draw people and the service will bring them
back.

Feel at home anywhere in the world with Airbnb. Find unique places to stay, learn from talented
hosts, and live as the locals do wherever you choose to travel.

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 SOURCES

“Airbnb Business Model.” ​Business Model Toolbox​, bmtoolbox.net/.

“Airbnb.” ​Vacation Rentals, Homes, Experiences, and Places​, Airbnb, Inc.

Benner, Katie. “Inside the Hotel Industry’s Plan to Combat Airbnb.” ​The New York Times​, The
New York Times, 16 Apr. 2017.

Bukszpan, Daniel. “Celebrity Homes on Airbnb | Money.” ​Time​, Time, 16 Dec. 2015.

“How Do You ‘Design’ Trust Between Strangers?” TED Radio Hour, NPR, 20 May 2016.

Mohn, Tanya. “Hostels Are More Popular .” ​Forbes​, Forbes Magazine, 17 May 2016.

Smith, Craig. “100 Amazing Airbnb Statistics.” DMR, 4 Oct. 2017.

Thomas, Lauren. “Airbnb .” CNBC, 9 Mar. 2017.

“What Is the Airbnb Stock Symbol?” ​Money Morning​, Money Morning , 15 June 2017,
moneymorning.com

Benner, Katie. “Inside the Hotel Industry’s Plan to Combat Airbnb.” The New York Times, The
New York Times, 16 Apr. 2017,
www.nytimes.com/2017/04/16/technology/inside-the-hotel-industrys-plan-to-combat-airbnb.htm
l.

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