The marketing mix element focuses on product strategy, place strategy, online platform, pricing, and service fees, Airbnb digital marketing strategy, content marketing strategy, comprehensive referral programme, user-generated content, social media analytics, and promotion strategy. Such strategies lead to an increase in existing users, customer acquisition, community connection, value proposition, brand visibility, better market share, and business growth.
Currently, Airbnb is a crowded marketplace and that is because of its popularity amongst the public. Investors and customers have shown trust in Airbnb listings, and this has led to a unique and strong brand identity in the target market.
Airbnb’s growth in recent years is a perfect example of how an effective marketing tactic helps a brand expand with the help of local community members, local partnerships, and local businesses.
Table of Contents
- Origin Country: United States of America
- Founders: Brian Chesky, Joe Gebbia, Nathan Blecharczyk
- Founded: 2008 in San Francisco
- Headquarters: San Francisco
- Employees in 2023: 6,811
- Annual Revenue in 2023: 40 billion USD
- Net Income in 2023: 1.89 billion USD
- Market Cap in 2023: 81.3 billion USD
The San-Francisco based American company Airbnb Inc. is one of the prominent names in the tourism industry. Often called an industry disruptor, it operates as an online marketplace for people who are interested in short-term homestays, lodgings, and experiences.
Airbnb is a broker between the host and the guest that charges a commission for each booking and works for a service fee. The company has become one of the most in-demand alternatives to hotels all over the world.
Airbnb was founded in the year 2007 and the Airbnb website and Airbnb App were launched in the years 2008 and 2010 respectively. It is the most crowded marketplace with 4 million hosts registered on the site, 6+ million active listings, and a total of 900 million arrivals worldwide.
Target Market: Airbnb’s Marketing Mix
The Airbnb marketing strategy focuses on two demographics in the target market – the Airbnb Host and the Airbnb Guest.
Airbnb Host refers to people who have spare property or room and want the Airbnb company to use it as a rental property for a service fee.
Airbnb Guest refers to the person looking for suitable accommodation or a vacation rental property that will help to save money or provide community connection with the locals for a service fee.
Airbnb target audience group for a guest looking for a physical location is between 18 years to 45 years while the age group for the Experience category is 18 years to 60 years. Based on age demographics, 36% of guests are between 25 years and 34 years, 15% are teenagers between 18 years to 24 years, and 13% are older people of 55 years and above.
For a guest, the major point of attraction is the cheap cost that helps to save money and a variety of accommodation options like simple rooms, apartments, houses, boats, farms, and even private islands.
Airbnb’s growth is dependent on its target audiences which comprise professionals, employees, students, travelers, easy-going people seeking novelty or different experiences, conferences, and visitors looking for a short stay, etc. For the Experience category, the audience also includes older and financially established people like executives and senior managers.
Airbnb Marketing Strategy & Marketing Mix (4Ps)
The marketing mix element focuses on user-generated content, a comprehensive referral programme, Airbnb digital marketing strategy, content marketing strategy, social media accounts, and a search engine journal for customer acquisition.
Airbnb is a successful online marketplace that has seen immense growth and success because of its marketing mix elements and marketing strategies. Airbnb business allows travel bloggers, backpackers, and tourists looking for homestays to experience the local flavor and community connection without having to go the extra mile and find a suitable place to rent.
The Airbnb marketing strategy has helped the Airbnb brand expand the Airbnb brand establishment to include lodging, hospitality, homestay, and vacation rental business with the help of local partnerships, rental property, vacation rental software, Airbnb listings, local business, and local community members.
Airbnb Product Strategy
Airbnb’s concept of a vacation rental is one of the easiest ways of promoting local businesses and local partnerships for business growth.
Airbnb is an online platform that connects Hosts or people with free spaces to Guests or travelers interested in renting places for short stays. Most of the hosts are common citizens interested in earning money by renting their place. They simply have to register on the website and list their place.
Airbnb brand establishment is no longer the only vacation rental business as one of its key features is the “Experiences” category where the Host offers local adventures and activities to the guest for example tours, walks, arts and crafts, lectures, and local dining etc.
During the pandemic, Airbnb expanded its product offerings to include the “Online Experiences” category. The digital presence is a range of experiences that the company offers digitally which the customers can enjoy from the comfort of their home.
Product Mix of Airbnb
Airbnb is a vacation rental business that offers services like lodging, hospitality, and homestay. The company has entered partnership contracts with locals so that the hosts can easily run and maintain their rental properties.
The Airbnb marketing strategy and marketing mix strategy has ensured that it has become a trustworthy platform in such a short time as both the host and the guest trust the company to deal fairly with them.
The product offerings in Airbnb’s strategy also include “Superhosts”. These are highly-rated properties that ensure the best services. Hosts strive to get good ratings by offering the best services so that their listings can be considered Superhosts.
The marketing mix and marketing strategies of the company ensure that both hosts and guests get additional services for a smooth experience.
The marketing tactic helps the company to work closely with the host so that every small detail could be added to the website for example acceptance or non-acceptance of smoking, cleaning, dogs, and in some cases children, etc. All these details might seem trivial at the beginning but make a great impact on the traveler‘s experience and how he perceives the rental properties.
Airbnb marketing strategy and services also include direct customer service, direct contact with the host, conflict resolution, refund policies, and a simple design layout so that both the host and the guest feel comfortable using the website.
The Airbnb product strategy includes several offerings like castles, tropical, earth homes, cabins, private rooms, treehouses, cabins, national parks, beachfront, pools, countryside, and farms, etc.
The Airbnb marketing strategy ensures that the farms listed on the company website have all the amenities that travelers are looking for. Some of the most popular farms are
- VAGAMON, INDIA
- HIKKADUWA, SRI LANKA
- LANGKAWI, MALAYSIA
The Airbnb marketing strategy ensures that the places with amazing pools offer different amenities like Wi-Fi, air conditioning and kitchen, etc. Some of the popular pools listed on the site are
- SURIN, THAILAND
- LONAVALA, INDIA
- WALAHANDUWA, SRI LANKA
The Airbnb marketing strategy ensures that the Earth Homes offered by the Airbnb platform are simply some of the best.
- HERAKLION, GREECE
- MUNNAR, INDIA
- DATKA, TURKEY
The Airbnb marketing strategy ensures that the countryside segment can please its customers with scenic beauty.
- NANDI HILLS, INDIA
- WAYANAD, INDIA
- KUKLUR, INDIA
The Airbnb marketing strategy ensures that customers can enjoy some of the best beachfront in the world through its website.
- THALANG, THAILAND
- NILAVELI, SRI LANKA
- KERALA, INDIA
The Airbnb marketing strategy ensures that there are several national parks in its listings for its esteemed customers who love to travel there.
- BANNERGHATTA NATIONAL PARK – HOSUR, INDIA
- NAGARAHOLE TIGER RESERVE, MYSURU, INDIA
- MUKURTHI NATIONAL PARK – BANDUMY, INDIA
Place Strategy in the Airbnb’s Marketing Mix
Airbnb has spread its presence to 220 countries and 100,000 cities with more than 4 million existing users or Airbnb Hosts. The global brand has millions of listings and more than 900 million arrivals worldwide.
Europe with 2.47 + million active property listings is its biggest market followed by Asia Pacific with 1.5 million active listings, North America with 1 million listings, Latin America with 786,000 listings, and Africa with 173,000 listings.
Among the 6.6 million apartments, homes, and unique accommodation listings there are an estimated 24,000 tiny homes, 90,000 cabins, 300 lighthouses, 140 igloos, 2,600 treehouses, 2,800 yurts, and 1,600 private islands, etc.
Place and Distribution Strategy of Airbnb
Airbnb marketing strategies for place and distribution are quite clear and simple. Any person who follows the set guidelines can become a host by registering and listing their property on the site. The entire process takes place within a few minutes.
There are more than 6 million physical locations or properties listed on the site and this includes properties in tropicals, Arctic regions, Europe, Asia, amusement parks, historical sites, beaches, movie sites, etc. to provide the guests with a unique experience.
The marketing strategies for the guests are also very clear. They must open the website and browse through the listings until they find their desired destination. The guests can use filters to make browsing easy as the entire process takes place quickly. The guests have the option of dealing with the hosts directly so that they may provide the required information and tell them about the entire service fee involved in the transaction.
The place and distribution channel in the Airbnb marketing strategies include the company website as it is through this online portal that both host and guest can align their interests for the service fees.
Airbnb has ensured that its website is easy-to-use so that the host can easily list their place and the guest can find the desired place with minimum fuss and both can track bookings. The vacation rental software on the website makes the work look easy with just a few clicks. The site with UI/UX design helps the company to deal with both the host and guest in tandem and also ensures direct customer service between them.
Pricing Strategy of Airbnb
Despite suffering losses during the pandemic Airbnb Hosts managed to earn $1 billion and that was a remarkable feat. As travel resumed the brand bounced back from an income loss of 68 million USD in 2021 Q2 to 834 million USD profit in 2021 Q3. Currently, the Airbnb vacation rental business is seeing immense business growth and has become a multibillion-dollar business.
Although North America is placed 3rd in terms of listings, it comes at the number one position in terms of profits as the country has proved to be the highest revenue driver for the brand. This is because the price of the vacation rental is higher in North America than in Europe or any other country.
Airbnb’s strategy ensures that all the listings and amenities along with clear prices and further breakdowns must be posted on the site so that travelers can choose the best possible option easily.
The Airbnb company has adopted a business model where the company keeps a cut or a service fee for every booking that happens on its platform. Other revenue earners for the company are Airbnb Experiences and Airbnb Plus.
The average cost in the Airbnb Business earns nearly 9,600 USD annually from the listings whereas the brand offers a “Plus Program” for the top Airbnb Host. The Plus Listings must strictly follow the brand rules and maintain high standards as these properties often earn 400% more than the regular listings. On average the Plus listings are sold for $250 per night and hosts must pay $149 for features in Verified Stay.
Under the host-only fee structure, the host service fee is 3% of the booking subtotal amount and the guest service fee is 14% of the booking subtotal amount. The median cleaning fee is $75 for one night per listing in the US market. Airbnb also publishes vital content that helps the host price their listings properly.
The Airbnb marketing strategy has ensured that the price or the entire service fee structure is at par with the value proposition. The target audience of the company is the hosts who list their properties on the platform for service fees and the guests who want to rent places on this platform instead of booking at hotels so that they could save some money.
The pricing strategy in Airbnb marketing includes the following –
Affordable Pricing Strategy
Airbnb has adopted an affordable pricing strategy and kept the service fee as well as other prices reasonable so that guests who want to save on their expenses can easily afford the rates.
Premium Pricing Strategy
The Airbnb marketing strategy has also adopted a premium pricing strategy for its elite guests who are looking for amazing and unique experiences and are willing to pay the price.
Value-Based Pricing Strategy
The Airbnb marketing strategy has also adopted value-based pricing for maximum value proposition under the host-only fee structure to offer maximum value to both hosts and guests.
Promotion Strategy and Promotional Mix of Airbnb
Airbnb follows a marketplace business model that targets both hosts and guests with the help of Airbnb marketing channels, Airbnb digital marketing strategy, content marketing strategy, search engines, social media accounts, user-generated content, and successful referral marketing.
The marketing channels in the marketing mix and promotion strategy of Airbnb include –
Airbnb acts as a marketplace where users are creating a digital presence through user-generated content like web pages that rank in travel and location-specific keywords. The hosts also have their own marketing strategies, digital presence, social media accounts, and marketing channels like the Facebook business page and the most popular video site the YouTube channel to promote their rental properties.
They run ad campaigns and post pictures, reels, and content on these social media channels. Travelers or guests also have their digital platforms and YouTube channels which when tagged with the user-generated content of the brand create brand visibility and awareness in the market.
Content Marketing Strategy
Airbnb uses a content marketing strategy for branding and SEO. It includes stories, reels, blog posts, pictures, and ad campaigns on Facebook business pages, Instagram, YouTube, and other sites. Airbnb’s travel magazine Pineapple posts pictures and visually rich stories for guests and hosts.
Airbnb Social Media Analytics
Airbnb has more than 16 million Facebook followers, 878,900+ Twitter followers, 5.2 million Instagram followers, and 442,000 subscribers on its YouTube channel. Airbnb knows the importance of adopting an effective digital marketing strategy and being active on digital platforms and social media channels.
One of the most important digital marketing strategies adopted by the company is the highly successful referral program. The launch of the referral marketing program led to a 900% growth in the company books which was truly an amazing feat.
Referral marketing is a part of the Airbnb digital marketing strategy where the customers receive travel credit from the company for successful referrals. The referral program is quite popular as it helps in saving money.
The new logo design was launched in the year 2018 and coined Belo. The Airbnb Logo focuses on the brand message – Connecting people, places, and love and became a branding success with time.
Airbnb has sponsored the 2022 Winter Olympics as part of its promotional activities
Don’t Go There, Live There
Airbnb marketing campaign “Don’t Go There, Live There” focuses on quality experiences at competitive prices. The ad campaign managed to put the customers at the focal point which led to better value proposition and more brand visibility.
That’s Why Airbnb
The ad campaign “That’s Why We Airbnb” celebrates the concept of individuality, uniqueness, and acceptance. It was specially created for the Indian audience and is shown across multiple channels
Airbnb continues to be the popular choice of travelers making the platform a market leader in the industry. It offers rare opportunities to experience unique and authentic local ways and see new destinations at comparatively cheaper rates.
The key takeaways from the Airbnb marketing mix and marketing strategy are
- Being an early industry disruptor is a good business tactic
- Maintain its pricing strategies
- Keep up with the listings
- More attention should be given to promotional tools
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