PART 1: GROWTH STRATEGIES:
INVESTING IN DIGITAL MARKETING STRATEGIES
The competitive advantage of Airbnb has been how they market an experience, rather than just a place to stay. “Don’t go there, live there” has been one of their most successful campaigns that they have run. Airbnb has also built for themselves great brand recognition and awareness that makes it difficult for competitors to ‘steal’ customers. With the growing desire for travel, the potential of Airbnb is massive in the coming years, and its uniqueness in regards to the experience given to the clients is one of the areas through which it can maximize its competitive advantages to boost sales and popularity.
One major way through which Airbnb can gain new customers is to focus on increasing the trust between host and potential renter. This would serve specifically new clients who may be reluctant due to the perceived risk of sharing a room with a stranger, and this can be done by methods such as suggesting highly rated hosts and using celebrity endorsements. Emphasis should also be made on Airbnb to market itself as a service that is easy to use, or easier, than traditional hotels. This way, if potential new guests determine that staying at an Airbnb is cheaper, more convenient for the travel goals, and is easier to use, they are far more likely to make their switch.
Another probable method for Airbnb to use to grow its market base is through innovation. For example, Airbnb can expand offerings to make it even more convenient, such as having travel planning services and car rental services. It could also work to move into the bed-and-breakfast area, motivating hosts to offer home cooked or locally sourced meals, food and drinks for guests; much like a hotel has continental breakfasts or a small bar in the lobby. This can also increase share of wallet from the current customers by expanding offerings to make itself more convenient, for example through adding additional travel services, whether by partnership or direct expansion, with the goal being to gain more revenue per trip. It could even add a service that sets up reservations at local restaurants that partner with the company in exchange for a small fee.
Airbnb can also broaden its marketing strategies, with an emphasis on its website and any other demographic marketing plan other than recent social media influence. This can be done also as a quality control measure by always adhering to the highest standards available, and can also serve as proof of quality in entering new countries for market. They can also work on their legal teams across the world to draft their contracts in detail and have both hosts and potential clients in check, as well as having visits and random checks to ensure compliance.
PART 2: THREATS AGAINST AIRBNB
- Social Media Attacks:
While social media has been used largely to promote the Airbnb industry, there is no doubt that unhappy customers are vocal customers. It is not surprising that some unsatisfied customers take to social media to express their feedback by highlighting grievances and complaints. Feedback is still an integral part of communication, whether negative or positive, (Lurie, 1986) and the responses to it are as important as the feedback itself. Negative word-of-mouth dynamics have been used to create huge waves of online firestorms, where many social media users vocalize their criticisms and complaints about a product or a feature and the company’s actions through interactive online channels. (J. Pfeffer, 2014). Negative media also seems to cover more distance across social media (Jain, 2019), and guests who may have had a bad experience may be more apt to cause bigger issues that is diffused across various internet sources. It poses a challenge because the Airbnb model is based on a value proposition and customer model, meaning that there is freedom for the client to choose what they want. The unfortunate experience of one client may not necessarily mean that the whole system is flawed, but it is still part of the system and has to bear the brunt of negative social media, especially since Airbnb acts as the intermediary channel between the host and the guest.
- Disruption to Established Lodging Markets
Airbnb, in its website, lists itself as a community-based online platform for listing and renting local homes, connecting hosts and travelers and facilitates the process of renting without owning the rooms itself (Airbnb, Inc.). A major advantage of Airbnb has been its tendency to be substantially cheaper, with the price ranging between 30% and 80% less than hotels in the same location. This definitely caused a stir in the already existing hotel and lodging industry, as their successful targeted marketing strategies made them deliver more than just a place to sleep as was the practice in hotels and lodges. There were concerns that if Airbnb “…went mainstream, the whole thing would crash down if rogue people started accessing the system, spreading fear and corrupting the whole thing.” (Schonfeld, 2008). The other major concerns were that room service and maid services, which were seen as an essential part of hotel and lodging and the accommodation sector as a whole, are currently two big factors that Airbnb does not have control over, and which some guests ultimately see as a necessity in travel.
- Same Business Model Competitors.
At the start of Airbnb in 2008, it was a unique entity that had cut its niche across the accommodation sector, and entering a new space of vacation rental booking. To date, there are numerous other sites that use the same business model to provide similar sources, such as Tripping, HomeToGo, FlipKey, HomeAway, VRBO (Vacation Rental By Owner), HouseTrip, VayStays, VacayHero, Luxury Retreats and Wimdu. While they have actively borrowed from the original model by Airbnb, these competitors will need to continue to look for ways to differentiate themselves in their own right. At the moment, n company is as popular as Airbnb, and for them to maintain the momentum and relevance needed to thrive, their best shot at the moment is to avoid bad press and negative reviews while keenly analyzing any gaps that exist and how to fill them to boost their market share.
- Local Laws and Regulations:
Since Airbnb has spread to one hundred and ninety two countries across the world, each of which have their own laws and legal systems, it has to rely heavily on the host country to comply with the laws that differ from one country to another, as well as city to city in some countries. With the rising competition, it is important that Airbnb focuses on helping their hosts and guests understand these laws, as well as abiding by the regulations to maintain their market edge over other upcoming competitors.
REFERENCES
Jain, K., Garg. A., J, Somya. (2019). Reconstructing Diffusion Model for Virality Detection in News Spread Networks. International Journal of Knowledge and Systems Science. 21-37.
Lurie, B. J. (1986). Feedback Maximization. Massachusetts: Artech House.
Pfeffer, J., Zorbach, T., Carley, M. (2014). Understanding Online Firestorms: Negative Word-of-Mouth Dynamics in Social Media Networks. Journal of Marketing Communications. 1-2, 117-128.
