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Airbnb provides a convenient way for people to rent out their extra space or entire homes for short-term stays. It has disrupted the hospitality industry and has become a major contender against more traditional forms of accommodation.
Since its launch in 2008, Airbnb has quickly grown to become one of the most popular rental services in the world.
This report explores the evolution of Airbnb and the changing landscape of travel accommodation, understanding Airbnb customers and how hotels can capture guests.
Contents
The Evolution of Airbnb
Platform Experience
Airbnb Brand Loyalty Drivers
Future of Airbnb
Understanding Airbnb Guests
The Changing Landscape of Travel Accommodation
Winning Back Market Share
How Hotels Can Capture Airbnb Guests
The Evolution of Airbnb
Airbnb is available in over 220 countries and regions worldwide and has over 1 billion guest arrivals.
Airbnb's initial success can be attributed to several factors that set it apart from traditional hotels and accommodation options.
The unique concept of home-sharing and peer-to-peer rentals allowed travellers to stay in local homes rather than hotel rooms, which were perceived as impersonal. This provided a more authentic and immersive travel experience, allowing guests to live like locals and explore neighbourhoods they otherwise may not have discovered.
This concept taps into the increasing desire for unique and personalised travel experiences.
In 2020, the company was valued at $75 billion, a substantial increase from just $35 billion the previous year.
A key factor contributing to Airbnb's success was its lower prices than traditional hotels. By offering a more affordable alternative, Airbnb appealed to budget-conscious travellers seeking cost-effective accommodation options. This allowed travellers to stretch their travel budgets further and allocate more funds towards other aspects of their trip, such as dining, activities, and experiences.
With more than 250,000 homes on Airbnb offering family-friendly amenities, the platform has become a go-to choice for family travel. The unique and diverse accommodations available are also worth noting, including approximately 300 lighthouses and 140 igloos where guests can spend the night. This variety adds to the appeal of Airbnb, offering travellers unforgettable experiences.
One of Airbnb's key strengths is its ability to cater to long-term stays, allowing travellers and digital nomads to immerse themselves fully in the local way of living. This flexibility has made Airbnb a preferred choice for those seeking extended stays in different parts of the world.
Unlike hotels and other traditional accommodations, Airbnb operates in a relatively unregulated space. This lack of regulation has led to concerns about tax evasion, illegal rentals, and unfair competition with traditional lodging providers.
Critics argue that Airbnb should be subject to the same regulations and standards as other hospitality businesses to ensure a level playing field and protect consumers.
Airbnb has been criticised for its adverse impacts on local housing markets. In cities with limited affordable housing options, critics argue that the proliferation of short-term rentals on Airbnb has led to decreased available housing for long-term residents.
Related Reading: A Town That Became 'One Giant Airbnb' Is Now Facing a Reckoning
This can contribute to rising rents and housing shortages, making it more difficult for locals to find affordable homes. As a result, some cities have implemented stricter regulations on short-term rentals to address this issue.
Scams on Airbnb have raised concern among hosts and guests. There have been instances where scammers create fake listings or use stolen credit card information to book accommodations through the platform. This results in financial loss for the victims and damages Airbnb's reputation. While Airbnb has taken steps to address these scams by implementing verification processes and refund policies, they remain challenging for the platform.
Platform Experience
The rise of peer-to-peer (P2P) platforms has revolutionised the travel industry, offering consumers innovative and attractive alternatives to traditional accommodations. Airbnb, one of the industry's leading players, has captured travellers' attention by providing unique experiences beyond mere lodging.
The Power of Memorable Experiences
Memorability is vital in building platform loyalty, particularly in tourism and hospitality. Customers in the experience economy seek unique and memorable experiences beyond traditional goods and services.
Airbnb's platform model focuses on co-creating experiences between hosts and guests. Interacting with locals and providing an authentic immersion into different cultures, Airbnb boosts consumer memorability, leading to positive outcomes and increased loyalty.
Key Factors Driving Platform Loyalty
Three main dimensions drive platform attachment and maintain customer loyalty on Airbnb: home benefits, social interaction, and authenticity.
Home benefits encompass the "home atmosphere" and "household amenities" that differentiate Airbnb from traditional hotels such as private hot tubs and fully equipped kitchens.
Social interaction Communication and engagement through Airbnb are important, even if physical interaction isn't necessary. Customers prefer to connect with hosts before their visit, establishing a connection that meets their sense of belonging and safety.
Authenticity is key for Airbnb customers in their travel experiences. Airbnb offers an immersive experience that allows customers to connect with locals and genuinely experience different cultures.
Airbnb Brand Loyalty Drivers
A recent study has shed light on the factors contributing to Airbnb’s brand loyalty; it highlights the importance of customer satisfaction and trust in the platform and its hosts.
Trust and Likability
When customers trust Airbnb and its hosts, it increases guest liking for the brand, satisfaction with their experience, loyalty to Airbnb, and the likelihood they will return. Trust is paramount in shaping customers' perceptions of the platform and hosts.
Positive experiences lead to favourable emotional responses, such as affection, satisfaction, and liking. Establishing trust and cultivating a likeable brand image is essential for enhancing brand loyalty.
Customer Satisfaction
Customer satisfaction determines whether brand loyalty will translate into repeat business. There are a lot of factors that affect satisfaction, including customer service and brand image.
Satisfied customers are more likely to revisit and share their experiences, leading to a loyal customer base and positive word-of-mouth marketing.
Outlook
The future of Airbnb is set to be shaped by several key factors, as revealed in an interview with Airbnb CEO Brian Chesky.
One major focus for the company is the expansion into longer-term rentals, with Chesky seeing it as a "huge opportunity." The rise of remote working has made customers more open to three-month or longer stays. Chesky also mentioned the possibility of Airbnb branching into car rentals and hosting dining pop-ups.
Looking ahead, Chesky highlighted the importance of perfecting Airbnb's core business and rebuilding the company after the significant impact of the COVID-19 pandemic. Using AI, Airbnb aims to create rich user profiles and enhance the search and booking processes.
Understanding Airbnb Guests
Airbnb guests come from a diverse range of age groups, with 36% falling between the ages of 25 and 34. There is also a significant percentage of younger guests, with 15% being teenagers aged 18 to 24, only 13% of all Airbnb guests are 55 years or older
One of the primary reasons for choosing Airbnb over traditional hotels is affordability, with 53% of guests citing this as a significant factor.
30% of guests opt for Airbnb due to its location. 33% are attracted by the opportunity to experience the local area authentically.
It is worth noting that solo travellers contribute significantly to Airbnb bookings, accounting for 26% of all nights booked on the platform.
Airbnb guests are drawn to the unique accommodations, personalised experiences, affordability, and the chance to immerse themselves in the authenticity of the local culture.
Airbnb Buyer Personas
Solo Traveller
Name: Sarah Johnson
Age: 23
Occupation: Freelance Writer
Buying Motivations: Sarah seeks unique, authentic experiences while travelling. She values exploring new cultures and immersing herself in local communities. Convenience and affordability are important to her.
Decision-Making Influencers: Online reviews and recommendations from friends who have had positive experiences with Airbnb influence Sarah's decision-making. She also considers the location, amenities, and safety of the accommodation.
Why they use Airbnb over a hotel: Sarah prefers Airbnb because it allows her to stay in residential neighbourhoods, providing a more local experience. She appreciates connecting with hosts who can offer insider tips and recommendations.
Values: Cleanliness and reliable communication with the host.
Pain Points: Sarah's main pain point is safety. She wants to make sure that the neighbourhood and her chosen accommodation are secure.
Family Group
Name: Mark and Emily Thompson
Age: Mark (38), Emily (36)
Occupation: Mark (Engineer), Emily (Stay-at-home mum)
Buying Motivations: Mark and Emily prioritise family-friendly accommodations and activities. They look for spacious and comfortable places that can accommodate their children. Safety, convenience, and proximity to attractions are vital to their decision-making.
Decision-Making Influencers: Recommendations from other families, online reviews, and the availability of child-friendly amenities greatly influence Mark and Emily's decision-making.
Why they use Airbnb over a hotel: Airbnb offers Mark and Emily the flexibility to have separate bedrooms or a kitchenette, which is essential when travelling with children. They appreciate the home-like environment that allows them to maintain a routine and prepare meals.
Values: Clear communication with the host and a hassle-free check-in process.
Pain Points: Mark and Emily's main pain points include finding accommodations that are child-friendly, clean, and spacious enough to accommodate their family.
Digital Nomad
Name: Alex Evans
Age: 28
Occupation: Software Developer
Buying Motivations: Alex seeks comfortable and functional workspaces, fast internet, and affordable long-term stays. He values the ability to work remotely and explore new destinations while maintaining a productive work routine.
Decision-Making Influencers: Reviews from other digital nomads, proximity to coworking spaces, and the availability of reliable internet connection influence Alex's decision-making.
Why they use Airbnb over a hotel: Airbnb offers Alex the flexibility to find accommodations that cater to his unique needs as a digital nomad. He can choose places with dedicated workspaces, ample natural light, and a local atmosphere that inspires creativity.
Values: Clear communication with the host and flexibility in extending his stay if needed.
Pain Points: Alex's main pain points include finding reliable internet, comfortable workspaces, and accommodations that align with his budget.
Guest Complaints
As the popularity of Airbnb continues to soar, so does the number of guest complaints, from misleading property descriptions to unresponsive hosts.
Complaints during the Booking Process
One of the most prevalent complaints from guests revolves around the lack of transparency during the booking process. Misleading or inaccurate property descriptions, photos, or amenities deceive many guests.
What may appear as a luxurious getaway in the pictures can be a disappointing reality. This lack of transparency leads to disappointment and undermines guests' trust in Airbnb.
Unresponsive Hosts
Another major complaint is the slow response from hosts. Guests often encounter frustration when hosts take unreasonable time to respond to enquiries or booking requests. This delay can cause anxiety and uncertainty, especially when guests are trying to secure accommodation for their travel plans. The lack of prompt communication can leave guests feeling neglected and undervalued.
Complaints during the Stay
Once guests have successfully booked their stay, they may encounter one of these common grievances.
Cleanliness
Guests expect a clean and hygienic space but often face unclean environments. Dirty linens, bathrooms, and common areas can quickly ruin a guest's experience and leave a lasting negative impression. Airbnb hosts are responsible for maintaining high cleanliness standards, but unfortunately, many fall short of meeting these expectations.
Poor Communication
Guests also express frustration when there is poor communication between themselves and the host during their stay. They expect prompt and helpful communication, including recommendations for local attractions and dining and resolving any concerns or issues that may arise. However, some hosts fail to provide the level of communication guests expect, leaving guests feeling uninformed and unsupported.
Reliance on Hosts
Guests using Airbnb face the risk of hosts cancelling bookings at short notice, causing significant inconvenience. Airbnb's assistance in such situations may be limited, leaving guests stranded.
Complaints about Aftercare
Even after the stay, guests may encounter further issues when seeking a resolution for their complaints.
Poor Resolution of Issues
Whether it's maintenance problems or property-related concerns, guests feel let down when their complaints are not adequately addressed. Airbnb's failure to provide effective solutions can lead to frustration and disappointment among guests, tarnishing their travel experience.
Inconsistent Reviews
Guests may also question the reliability of reviews on Airbnb. When their personal experience differs significantly from the positive reviews of a property, it raises doubts about the authenticity of the reviews. This inconsistency erodes trust and leaves guests wondering if they can genuinely rely on the feedback provided by other guests.
Privacy and Safety Concerns
With millions of users staying in someone else's home, there is always a risk of privacy breaches and safety issues. These privacy and safety concerns have raised questions about the measures Airbnb takes to ensure the well-being of its users.
Privacy Breaches
One of the most alarming privacy concerns associated with Airbnb is the presence of hidden cameras in rental properties. While hosts must disclose the existence of any surveillance devices, there have been numerous reports of guests discovering hidden cameras without their knowledge or consent, leaving guests feeling insecure and exposed.
Safety Concerns
Beyond privacy breaches, safety concerns have also plagued the Airbnb experience. Incidents of theft and assault in Airbnb listings have been reported, leaving guests traumatised and questioning the security measures in place. Unlike hotels, which often have security guards and staff available 24/7, Airbnb properties lack the same level of on-site supervision and support.
Illegal subletting can also pose security risks to residents of a building.
There are growing concerns about the compliance of Airbnb listings with fire safety measures. It has been reported that approximately 18,000 Airbnbs in the UK do not have smoke detectors, and nearly 65,000 lack carbon monoxide alarms.
Starting October 1 2023, Airbnb and holiday let owners in England and Wales must implement new fire safety measures in their properties to ensure the safety of guests. These measures include conducting fire risk assessments and installing fire doors, keyless locks, and smoke alarms in every room, even for single-night rentals.
Implementing these new fire safety requirements may have financial implications for hosts who own multiple properties. As a result of these regulations, the government seeks to provide clarity and guidance to property owners in meeting their duties of care and creating a safer environment for guests.
Loss of Trust
Guests who have fallen victim to hidden cameras or experienced theft and assault during their stays have felt betrayed and violated.
From account hacking and fraudulent bookings to bug infestations, invasions of privacy through hidden cameras, and unwanted visitors, discussions on popular forums paint a grim picture of the risks of staying at an Airbnb property.
Compared to hotels, where stringent safety and quality regulations are in place, the disparity in safety standards is concerning.
Regulations and Accountability
Legal Issues
Airbnb faces legal challenges in major cities, potentially rendering their rentals illegal. For instance, in New York City, 72% of reservations made in 2014 were unlawful. Similarly, almost half of holiday rentals in Barcelona lack licenses, contravening local regulations. Cities like Paris and Mexico City have restricted the days for holiday rentals, and Japan has taken strict action against illegal minpaku accommodations.
Legal Enforcement in European Cities
Several European cities, including Amsterdam, Barcelona, Berlin, Paris, and Vienna, have called for the European Commission to address the flaws associated with services like Airbnb. Berlin, for example, has implemented stringent laws that impose fines of up to €100,000 for illegal short-term property leasing.
Illegal Subletting
A concerning trend within Airbnb is the prevalence of illegal subletting. In Australia, approximately 35% of Airbnb listings are by individuals who do not own the property, which can lead to eviction for tenants subletting without permission.
Negative Impact on Local Communities
Airbnb can negatively impact local communities by contributing to the shortage of long-term housing, disrupting the social fabric, and increasing rent prices. In some cases, Airbnb hosts have demonstrated a lack of respect for local customs, straining community relations.
Supporting regulated accommodation in major cities helps preserve local life and culture, making it a more ethical choice.
The Changing Landscape of Travel Accommodation
As the travel industry evolves, hoteliers face the challenge of winning back market share from alternative booking platforms like Airbnb. By understanding the changing landscape and adapting to the needs of modern travellers, hotels can position themselves as the preferred choice for accommodation.
According to statistics from Airbnb, they have over 7 million listings worldwide, compared to approximately 18 million hotel rooms offered by global hotel chains. Airbnb's user base has surpassed 150 million, while hotels have around 1 billion guests annually.
One of the key reasons behind the rise of alternative booking platforms is the shift in customer preferences. Modern travellers seek unique and authentic experiences and are increasingly drawn to accommodations that offer a more personalised touch. Boutique and unique lodging options have seen a surge in popularity as they provide a sense of immersion in the local culture and environment.
Sustainability and eco-friendliness have become essential considerations for travellers. Many alternative booking platforms emphasise sustainable practices and offer eco-friendly accommodations, appealing to environmentally conscious guests. Hotels can tap into this trend by adopting green initiatives and promoting sustainable practices to attract eco-minded travellers.
Winning Back Market Share
To win back market share from alternative booking platforms, hotels need to adapt and differentiate themselves. Here are some strategies that hoteliers can implement:
Embrace Boutique and Unique Lodging
Hotels can cater to the demand for unique experiences by offering boutique and one-of-a-kind lodging options. By providing themed rooms, personalised services, and local experiences, hotels can create a memorable stay for their guests. Collaborations with local artists, designers, and artisans can add a touch of authenticity and exclusivity to the guest experience.
Focus on Sustainability and Eco-Friendliness
To attract environmentally conscious travellers, hotels should prioritise sustainability initiatives. This can include adopting energy-efficient practices, reducing waste, and promoting eco-friendly amenities. Certifications such as LEED (Leadership in Energy and Environmental Design) can serve as a testament to a hotel's commitment to sustainability.
Enhance Digital Presence and Experience
Hotels should invest in their digital presence to compete with the user-friendly interfaces of alternative booking platforms. A well-designed website, mobile app, and online booking system can streamline the reservation process and provide a seamless experience for guests. Integrating technology within the hotel, such as smart room controls and contactless check-ins, can further enhance the guest experience.
Go Deep on Data and Personalisation
Hotels can offer curated packages, personalised amenities, and targeted marketing campaigns by analysing guest preferences and behaviour. This personal touch can create a sense of exclusivity and loyalty among guests.
For example, a hotel can analyse data from guest surveys to determine their preferred amenities, such as complimentary Wi-Fi, complimentary snacks, or upgraded room amenities.
Collaborate with Local Partners
Partnering with local businesses, attractions, and events can make the trip more memorable. Hotels can offer exclusive access to local tours, dining experiences, and cultural events, creating a unique and immersive stay for their guests. This collaboration can also drive revenue and support the local economy.
Offer Competitive Pricing and Value
While alternative booking platforms often offer lower prices, hotels can compete by providing value-added services and amenities. This can include complimentary breakfast, spa treatments, or access to exclusive facilities.
Hotels should also ensure transparency in pricing and communicate the benefits of staying with them.
Provide Excellent Customer Service
Winning back market share requires exceptional customer service.
Hotel staff should be well-trained, attentive, and responsive to guest needs. Going above and beyond to exceed guest expectations can create a memorable experience and foster customer loyalty. It’s not just the first impression that counts; the last one does, too - perhaps even more so!
How Hotels Can Capture AirBnB Guests
Instead of seeing Airbnb as a threat, hotels can use it to reclaim customers and outperform the competition.
By understanding what Airbnb offers and capitalising on its unique advantages, hotels can create a compelling proposition that attracts and retains guests.
Communicate Hotel Strengths
One of the main advantages that hotels have over Airbnb is their infrastructure. Hotels offer professional management, safety, and security, providing guests peace of mind. Unlike Airbnb, hotels are subject to strict regulations and safety standards, ensuring a consistent and reliable experience. Hotel managers and marketers should double down on these advantages and highlight the value of staying in a professionally managed establishment.
Hotels also have the advantage of offering a wide range of amenities and services. From on-site restaurants and bars to fitness centres and conference facilities, hotels can provide a comprehensive experience that Airbnb cannot match. By showcasing these amenities, hotels can differentiate themselves from Airbnb and attract guests who value convenience and a full-service experience.
Use your hotel's reputation and brand recognition to attract Airbnb guests. Many hotels have established themselves as trusted brands for their quality and service. By promoting their brand identity and highlighting the benefits of staying in a well-known hotel, marketers can appeal to guests who may be hesitant to try Airbnb for the first time.
Creating Unique Experiences
Airbnb's success is partly attributed to its ability to offer unique and personalised experiences. Hotels can adopt a similar approach by creating immersive and memorable guest experiences. This can include curated local activities, culinary experiences, and cultural events that showcase the destination and provide a sense of authenticity.
Innovative hotel concepts can also capture the attention of Airbnb guests. Boutique hotels, themed accommodations, and eco-friendly resorts are just some unique offerings that can attract guests seeking something different. By creating a distinct and memorable experience, hotels can stand out from the competition and appeal to guests looking for more than a place to stay.
Hotels can integrate local culture and activities into their offerings. By partnering with local businesses, attractions, and artisans, hotels can provide guests with insider access to the destination. This can include guided tours, workshops, and exclusive deals that allow guests to immerse themselves in the local community.
Enhancing Social Connectivity
One of the key reasons why guests choose Airbnb is the opportunity to connect with locals and fellow travellers. Hotels can replicate this sense of community by fostering social interaction among guests. This can be achieved through social events, workshops, and networking opportunities.
Creating shared spaces where guests can gather and socialise is another effective strategy. Hotel lobbies, rooftop bars, and communal dining areas can serve as meeting points for guests, encouraging social interaction and creating a sense of belonging. Hotels can provide a social experience that rivals Airbnb by facilitating guest connections.
Mobile apps, chat platforms, and interactive guest portals can facilitate guest communication and provide a platform for sharing recommendations and experiences. By embracing technology, hotels can create a digital community that complements the physical space and encourages social interaction.
Collaborating with Local Partners
To offer guests a truly immersive experience, hotels should collaborate with local partners. By forming partnerships with local businesses, attractions, and tour operators, hotels can provide guests with exclusive access and unique experiences. This can include discounted tickets to local attractions, curated city tours, and special promotions at nearby restaurants and shops.
By offering guests access to local experiences, hotels can differentiate themselves from Airbnb and provide a value-added service. Guests can benefit from the hotel's local knowledge and connections, allowing them to discover hidden gems and enjoy personalised recommendations.
Marketing and Promotional Strategies
Hotels need to implement effective marketing and promotional strategies to attract Airbnb guests. Your online presence must be strong, including an optimised website, active social media profiles, and positive reviews.
Hotels should invest in search engine optimisation (SEO) to make sure their website ranks high in search results when potential guests are looking for accommodations.
Content marketing is also essential to engage with potential guests. Hotels should create compelling content that tells a story and highlights their unique features and experiences. This can include blog posts, videos, and social media campaigns that showcase the hotel's personality and appeal to the target audience.
Building partnerships with influencers and travel bloggers can help hotels reach a wider audience. By collaborating with individuals with a solid online following and influence in the travel industry, hotels can generate conversations and attract attention from potential guests.
Analysing Airbnb's Recent Initiatives
Airbnb has made significant efforts to regain customer trust and loyalty. Enhanced safety protocols, strengthened host and guest policies, and increased transparency and accountability are some of the measures Airbnb has implemented. Hotel managers should analyse and learn from these initiatives to improve their operations.
Transparency should be a priority for hotels, ensuring clear and accurate communication with guests. This includes transparent pricing, policies, and terms and conditions. Hotels should also focus on cleanliness and hygiene, implementing rigorous cleaning protocols and providing guests peace of mind.
Prompt issue resolution is another area where hotels can excel. By addressing guest concerns and resolving issues quickly and efficiently, hotels can build trust and loyalty. This can be achieved through effective communication channels, well-trained staff, and a commitment to guest satisfaction.
Conclusion
Airbnb has disrupted the hotel industry, but hotels still have unique strengths and advantages.
Hotels can provide a reliable and convenient experience that appeals to guests by emphasising their infrastructure, amenities, and services.
Creating unique experiences, enhancing social connectivity, collaborating with local partners, and implementing effective marketing strategies are all vital to attracting and retaining Airbnb guests.
With the right strategy and execution, hotels can reclaim customers from Airbnb and position themselves as the preferred choice for travellers.
References
https://www.statista.com/statistics/1193543/airbnb-nights-experiences-by-region-worldwide/
https://www.statista.com/statistics/1193565/airbnb-revenue-by-region-worldwide/
https://travelweekly.co.uk/articles/303470/us-study-highlights-airbnb-safety-failings
https://www.theinvisibletourist.com/why-you-shouldnt-use-airbnb-issues-you-didnt-know/
Journal of Hospitality and Tourism Technology (2023) Exploring the relationship between trusts, likability, brand loyalty, and revisit intentions in the context of Airbnb (Trang P. Tran, Chao Wen, Ilia Gugenishvili) Available at: https://www.emerald.com/insight/content/doi/10.1108/JHTT-09-2021-0270/full/html
Very interesting article!
Adding to the list of strengths that hotels should consider emphasizing: Higher health and safety standards. This is also one of the reasons why customers pick a hotel over a vacation rental, according to some research.