Introduction of Airbnb

Airbnb (Air Bed and Breakfast) is an online community place where people to rent out their

apartments, houses, or even individual rooms in their homes. It allows people to rent out their

homes in over 65,000 cities across 191 countries. It connects people to one-of-a-kind travel

experiences at almost any price point specified by the host. (2017)

History of Airbnb

Brian Chesky, Joe Gebbia, and Nathan Blecharczyk launched the company in San Francisco in

2008 August, and it quickly became one of the first peer-to-peer housing accommodations

providers. In 2007, the founders were traveling to a conference but couldn't afford to pay for

their lodging, so two of them decided to rent out a portion of their flats to help cover the costs of

the trip. Their concept was motivated by this. The founders want to influence people's

perceptions about travel. They teamed with Y Combinatory in 2009 to extend their limited

products. They kept expanding and raising investment, eventually acquiring Accoleo to expand

their operations worldwide. Airbnb now operates in 191 countries, allowing users to rent a room,

a home, or even a castle for a night or longer. (2016)

SWOT Analysis of Airbnb

Strength
It has a leadership position in its service category.

Furthermore, while there are numerous imitators, Airbnb is the category leader.In a market wher

e every tourist is seeking for the greatest value as well as the most reliable service and experienc

e, Airbnb 

stands out owing to its market domination. Airbnb has evolved as a popular option for folks who 

want a unique environment when they travel and do not want to be tied down to the hotel reserva

tion experience with a mainly uniform room. (Gaille, 2021)

It offers a cheaper alternative to hotels.

Choosing an Airbnb is generally less expensive than booking a hotel room. Prices are already far 

cheaper than those of hotels, given to the company's principal business strategy of undercutting s

uch types of lodgings. In addition, Airbnb hosts do not have to charge as much since there is sign

ificantly less overhead

hotels must pay for employees, supplies and materials for all rooms, and upkeep, whereas Airbnb 

hosts must just cover a few peripheral costs. Customers save money as

well since there are no resort fees or increased hotel taxes. (Gaille, 2021)

It gives travelers choices of places to stay across the globe.

Airbnb hosts can post available rooms from anywhere in the globe; there are no geographical

restrictions on where an open room can be discovered if a willing host is not available. The

physical locations of hotels limit their capacity, and they can only pick particular areas based on

saturation from rivals and proximity to existing sites. Travelers using Airbnb may simply select a

host location regardless of where they are going or coming from. (Gaille, 2021)

Weakness

Searching online for accommodations will usually not bring up Airbnb as an option.
Another area where the marketing plan fails to make a significant impact is through Search

Engine Optimization (SEO). Users will only see Airbnb in their top search results if they search

for it directly, rather than the destination or kind of lodging. Many of the top positions are

occupied by hotels and travel firms who have invested in SEO in order to rank on Google's first

page. (Gaille, 2021)

Lack of quality control for hosts

Part of the appeal of Airbnb is that tourists may locate rooms almost anywhere, but because there

are no quality control rules, the degree of comfort or cleanliness can vary greatly. Hotels, at the

very least, have some corporate standards to adhere to, resulting in a consistent experience

regardless of location. Because Airbnb hosts are not obliged to fulfill any "brand" criteria, unique

experiences may suffer from a less-than-ideal host atmosphere. (Gaille, 2021)

Some hosts charge high prices.

In most circumstances, the host sets the price. While some hosts charge only enough to cover the

price of utilities and other basic necessities, others who perceive their space to be a "luxury"

location may charge more than their place is genuinely worth. And when prices are raised to

compete with hotels, Airbnb loses one of its key competitive advantages. (Gaille, 2021)

Opportunity

Continue up selling the travel experience.

Airbnb's key selling point is that it makes lodging a part of the experience rather than just a

requirement since the tourist needs a somewhere to sleep. Beyond the straightforward cost

savings, appealing to the individuality of a person's stay will be crucial to retaining Airbnb's

charm. (Gaille, 2021)

Continued global expansion.

Airbnb is yet to develop in other global countries, particularly in emerging nations. As an early

entry into the travel industry, taking advantage of possibilities throughout the world may be a

great chance for development. (Gaille, 2021)

It could increase the power of its mobile app.

Airbnb, like many modern services, has a Smartphone app that allows users to make bookings

from anywhere, even while on the road. Investing extensively in a smooth mobile experience

will increase the accessibility of their goods to more travelers. (Gaille, 2021)

Threats

Decrease of acceptance of home-sharing

Home-sharing may be less popular in some areas due to cultural factors. As a result, Airbnb's

competitiveness may suffer as a result. For example, many hosts and visitors are unwilling to

share their houses during the Covid-19 issue. (Gaille, 2021)

There is uncertainty regarding the current and future legal framework.

Local and state governments are constantly shifting the goalposts about what is necessary for a

private property owner to rent out their space. Because of the ever-changing nature of regulatory

regulations, it may be difficult to list a place for rent on Airbnb, and potential hosts must do their

study if they intend to host. (Gaille, 2021)

It faces lawsuits (welcome to the business world).

Airbnb may face legal action from hosts who utilize its site. For example, some hosts have sued

Airbnb because it did not reimburse cancellation costs, and county governments have sought to

collect tourism taxes from Airbnb in the same way as they would from a traditional hotel. Other

common difficulties, such as host and tourist discrimination, may also develop. (Gaille, 2021)
Airbnb Mission Statement

Airbnb's mission is to help create a world where you can belong anywhere and where people can

live in a place, instead of just traveling to it. That is to grow for supporting the community.

(2019)

Airbnb Competitor analysis

Airbnb’s market share has risen dramatically since 2010. Statistics from 2019 estimate that

Airbnb now accounts for upwards of 20% of the vacation rental industry as a whole. With the

entire market valued at roughly $87 Billion in 2020, this puts Airbnb’s total revenue in the

realms of $20 Billion. Analyzing Airbnb’s growth rate in 2018 topping 30% in the first quarter

alone, it’s healthy to assume these statistics are only going to rise in the coming years. Despite

being owning most of the space in the market and their growth there are tough competitors in the

industry for Airbnb. (Airbnb sales)

Booking.com

Booking.com origin as a small startup from Amsterdam with its focus originally on aggregating

Hotel and short-term accommodation onto one marketplace. Both Booking.com and Airbnb are

the giants when it comes to letting private accommodation. If we compare them both side by side

we can see that Booking.com is still primarily a platform for booking Hotel/Holiday apartment-

style accommodation, whereas the core of Airbnb’s listings is still from small-time homeowners

looking to monetize their properties. As Airbnb and booking.com both are trying to provide

solutions for the entire travel journey — from car rentals and flights to activity bookings and

restaurant reservations, it can be said that the competition has just begun. (2021)

Flip key
Flip Key was originally a house-swapping platform. In 2008 after Flip Key got featured in in

Travel and Leisure Magazine’s Top Travel website list was quickly acquired by Trip Advisor.

Flip Key has the same end goal as Airbnb, to create a complete smooth experience for the

consumers whether it's car rental to flight bookings or restaurant recommendations to local tour.

A key advantage for Flip Key is that they have combined wisdom over 500+ million Trip advisor

traveler reviews which can help the consumers make more informed travel decisions. However,

the Airbnb brand reigns supreme as Airbnb still dominates Flip Key in almost every market.

However, the time will tell whether Airbnb going to continue to dominate Flip Key. (2021)

Vrbo

Vrbo is a lot like Airbnb in terms of their services. It's basically a P2P rental site that

allowsprivate and commercial accommodation owners to rent their places out. This platform acts

as broker by advertising and executing a transaction, and they get a commission from each

booking. Comping both the company’s side by side we can see that, Airbnb allows property

owners to list shared spaces, while on Vrbo, you can list only the entire property. Besides, Vrbo

requires owners to showcase at least 15 pictures of the home, while on Airbnb, as few as five

photos will do. Another difference between these popular platforms is the listing fee. At Airbnb,

property owners can list their homes for free, and pay a 3% host commission rate for each

reservation. (2021)

Marketing strategy
The three-step process of marketing strategy which are "Segmentation-Targeting-Positioning" is

one notion that might aid a company's path to developing a brand identity in the market. A firm's

brand identity is formed on a deep understanding of its consumers, competition, and business

surrounding. (Marketing strategy of Airbnb - A Case Study)

Segmentation

Airbnb segments their audience by four categories, geographic, demographic, behavioral,

psychographic. In geographic they have two parts regional and density. In demographic they

divided by age, gender, occupation and life cycle. In behavioral they have Degree of loyalty,

Benefits sought and Personality. In psychological they segmented through social class and life-

style. Also, the aggregate statistics for respondents' reasons for choosing Airbnb show the wide

range of factors that attract visitors to the site. The exploratory factor analysis classified the

motives into five categories: interaction, home benefits, novelty, sharing economy ethos, and

local authenticity. Following a statistical approach, the respondents were split into five groups:

Money Savers, Home Seekers, Collaborative Consumers, Pragmatic Novelty Seekers, and

Interactive Novelty Seekers. (Marketing strategy of Airbnb - A Case Study)

Targeting

The Targeting component of this three-part strategy will assist a company in narrowing their

vision and delivering an impactful message. A company must carve out a vision of how its brand

should be perceived by its target audience. Airbnb was able to do this by focusing its vision on

people who travel and want to save money on their living expenses. By focusing on a specific
demand niche, they were able to target the proper sort of suppliers, allowing them to provide

their own houses at a cheap cost as an alternative source of income and satisfy the need of their

consumers.

Positioning

Positioning plays a role in the reliability of Airbnb. Because the model is based on people

allowing strangers into their homes, many security issues may arise; however, the brand

positioning is such that there is a sense of reliability associated with the brand, so the input of

new customers is much higher. Furthermore, by satisfying a previously unsatisfied niche market,

Airbnb was able to promote itself as the pioneer of home-staying, thereby reinforcing its status in

the hotel industry's hierarchy. (Marketing strategy of Airbnb - A Case Study)

Marketing mix of Airbnb (4ps)

Product

The product strategy and mix in Airbnb marketing strategy can be explained as follows:

Airbnb is a popular website that assists consumers and users in booking hotels, hostels, and other

types of lodging. Because Airbnb works in a business-to-business market, the platform is the

service that they provide to hosts in exchange for the value proposition of 'making money to fuel

their own hobbies.' Airbnb's marketing mix includes a wide range of service offers. They make it

easy for visitors to locate the ideal lodging, such as homestays, hostel beds, hotel rooms, and so

on, or travel activities, such as scuba diving, culinary courses, art classes, and so on, by selecting

from a selection of listings accessible on the platform. They provide the hosts with two options:

host alone or host with others. They provide hosts with two options: host alone by offering their

house for rental or any experience they choose to provide to the visitors, or co-host with others
by sharing their obligations with them. Airbnb also provides enhanced additional services like as

protection plans to its hosts. The cost for the location or service given can then be established by

the hosts. Because few hosts have expertise establishing pricing, Airbnb gives an estimate based

on similar listing type, location, and guest capacity. As a result, Airbnb serves as a middleman by

enabling all conversations and transactions between the visitor and the host via the site.

Bookings were substantially cut as a result of the epidemic. However, by 2021, the corporation

had gone public with a $3.5 billion IPO. (2016)

Airbnb price

Below is the pricing strategy in Airbnb marketing strategy:

Airbnb earns money by charging service fees to its hosts. Airbnb does not collect any fees for the

services it provides to visitors or consumers directly. Instead, it assesses a service fee on each

reservation made, regardless of listing type or whether it is a single host or a co-host from the

hosts, which is ultimately paid by the travelers or guests. In addition, hosts might invite bookings

through internet ad campaigns. Because all transactions are processed through the platform, the

funds are remitted to the hosts 24 hours after the guest checks in. The hosts can also select from a

variety of common cancellation policies with varying degrees of flexibility. The hosts also have

a variety of typical cancellation policies from which to pick, each with its own set of criteria for

returns in the event that either the hosts or the guests cancel their bookings prior to or after their

arrival. (2016)

Airbnb place

Following is the place strategy in the Airbnb marketing mix:

Airbnb began in San Francisco in 2007 when the proprietors converted their living room into a

bed and breakfast. As the concept expanded, they built a website that offered short-term living
quarters to customers who found hotel bookings too expensive or couldn't get a booking at all.

By 2009, the website's offerings had extended beyond air beds and shared spaces to include

complete houses, flats, private rooms, castles, yachts, and other assets, as well as other

'experiences.' Currently, Airbnb's online site allows access to rooms and activities in over 190

countries. It is accessible via all digital media and hence has a broad worldwide reach. As a

result, anyone in the internet ecosystem may utilize Airbnb. (2016)

Airbnb promotion

The promotional strategy in the Airbnb marketing strategy is as follows:

The Airbnb marketing approach aims to foster growth through digital marketing, internet

advertising, community engagement, referral marketing, and local partnerships. Airbnb promotes

itself through a variety of marketing tactics. It promotes to hosts and passengers using both

classic and new tactics like as TV commercials, outdoor advertising, and digital media

marketing. Airbnb attempts to express the value proposition of 'living like a local' through its

commercials and employs a geo-localized strategy for these promotions by providing material

appropriate to a certain place. It also employs social media analytics to target the appropriate

audience for the properties featured on its platform. The corporation also engages in other public

relations operations such as offering support and donating to various causes, such as providing

free housing for individuals affected by Hurricane Sandy in New York in November 2012,

thereby engaging in cause-related marketing. Based on the results of the customer study, the logo

and website were also changed. Airbnb also supports numerous events and has collaborated with

other agencies to increase brand awareness. (2016)

Recommendation

Though Airbnb is quite a large brand itself, still there are a few recommendations we have for

them to by which they can improve themselves more.

 The first thing is that they should build an app for them. They do have a website for all

the information and bookings, still we feel having an own app will make a huge

difference in their business. People will find it easy to use if they build an app which will

be easy to use and people will have access to all their information within a click.

 They should be more on social media and keep themselves updated in those platforms to

reach to their maximum target market. As nowadays people travel places and need houses

or hotels to stay in by that Airbnb can use the social medias to let more people know

about their company.

 They should use key words more in their website as in take SEO in their account so that

people can find them even if they don’t write their name directly. It is very necessary

these days as there are many other options in a same business industry being available

and being in front of people’s eyes is a must.

 They should build a little more control with their host. There are less quality control

rules, the degree of comfort or cleanliness can vary from place to place so they should

provide proper photographs and proper details so that the tourist or the person taking their

service does not feel that they are getting any less then they are paying.