We were previously instructed to avoid strangers. We were instructed not to share personal information online and, most importantly, never stay at a stranger’s home. Today, we not only communicate with strangers online, but we even book their homes for an overnight visit. Could you have imagined launching a business in 2008, when unemployment was at its highest? Not at all.
But there is a company that not only started during the crisis, but has surpassed major hotel chains such as Hilton and Taj to become the world’s largest accommodation provider.
Table of Contents
History of Airbnb – The Idea of living in Stranger’s House
The story begins in 2008. When Lehman Brothers failed, the world fell silent. Everything seemed to stop. The company’s collapse left lakhs of workers unemployed. There was sadness and silence everywhere. The recession did not spare interior designers Brian Chesky and Joe Gebbia. Their rent went up by 25% overnight. They also had to attend a design conference in San Francisco. However, they are unable to find a place to stay because the rooms are all reserved. They returned disappointed, and they were out of money, so they couldn’t pay the additional rent.
To resolve this, Brian hired an extra bed for his room. He earns some money and pays his rent. But who thought Brian’s survival strategy would turn into such a lucrative business? Following this incident, Brian and Joe decided to market their services online, which is how Airbnb was founded. It began by renting an empty room in their house, but Brian saw the potential and decided to list other houses with empty rooms as well. But, you know what? If you’d heard this back then, you might have laughed. Because if individuals can’t even communicate with strangers, why would they let a stranger stay in their home?
People lost their employment as rents rose. As a result, they were forced to rent out their spare rooms in order to pay their bills. As a result, it was as though Airbnb had won the lotto. The startup, which had been rejected by over 20 investors, experienced unexpected growth. However, following Airbnb’s popularity, copycat firms entered the market. Tripping.com, hometogo, onefinestay, flipkey, and other similar firms joined the market, preparing to compete with Airbnb.
The Challenging Phase
In the year 2013. It had been 5 years since the company began, and the situation was extremely heated. Things were now extremely challenging for Airbnb, and the company was in a sensitive state. But then something unexpected happens, which opens the door to fate for Airbnb. Instagram had just been around for a year in 2013. People began to pay more attention to the digital world after they gained access to free Internet.
Everything was changing pretty quickly. Airbnb did something that surprised everyone. So, pay close attention to what follows. Airbnb’s entire business is based on both of these factors. The first and foremost host. That refers to the individual whose residence people visit. Travellers come in second place. The clients who remained at people’s homes. The company faced a significant difficulty. The problem was not only to keep both hosts and travellers satisfied, but also to attract more such players to the ecosystem.
The quickest and most straightforward approach to accomplish this is to spend a lot of money to attract more of them to the site. The fundamental issue, however, was that the company lacked sufficient funds. So, what did the corporation do? Well, the company developed a powerful cycle system.
The first and foremost, the company began training hosts. As a result, the hosts were able to provide excellent service to tourists. Its knock-on effect was that whenever a traveller stayed with a host, they were impressed with their service. Furthermore, they noticed that the host not only offered excellent service, shared their culture, and had fun with me, but he also earned money.
This would also encourage the traveller to offer their property on Airbnb, assuming they had one. As a result of their excellent host training, not only did more tourists arrive, but they were also turned into hosts. I understand what you are thinking. Airbnb’s competitors are doing the same thing, so what makes Airbnb unique? The answer is personal connection.
The Digital Marketing Strategy to reach more travellers
Airbnb uses Craigslist integration to quickly gain new customers. Craigslist is a website where users may search for everything from employment to apartments. They reverse-engineered it to improve compatibility and combined the two platforms. Thus, when a short-term rental ad appears on Craigslist, the information is sent to Airbnb. Airbnb would now propose that they use their host programme. This not only increased the number of hosts on Airbnb, but it also generated more inbound connections, resulting in increased traffic to their website.
Airbnb has also used Google Ads, specifically search ads, since its inception. There were only 10,000 visitors to their website; but, thanks to Google Ads, their traffic increased to 80,000. Very few people are aware that when Google first launched its advertising services, Amazon was their first customer. Nobody believed Google Ads before then, but people observed Amazon’s development as a result of Google Ads, and Google gained a lot more advertisers.
The competition was increasing day by day. Every competition was fired up by Airbnb’s success. As a result, some people have circulated propaganda against it. However, while everyone was trying to ruin Airbnb, the company had already begun working on its next approach. The strategy was dubbed content management. Any brand’s content collection contains two categories of material. Number one, team content.
This is the stuff created by their staff, including blogs, posts, banners, and videos. All of these are made by the company’s internal personnel, specifically their creative team. The second category of material is user-generated content. This is the content that the company is not connected with. It is created by the company’s users. Its main advantage is that the company only needs to share this pre-made material and receives free attention.
Airbnb prioritised user-generated content over team work, focusing only 30% on the latter. To accomplish this, they first guaranteed that hosts provided excellent service to their guests. Furthermore, travelers receive not just wonderful amenities, but also good travel support. When Airbnb guests received all of these amenities, they began commenting about them on social media. They started blogging about where they stayed.
This provided the organisation with two benefits. Number one, increased publicity. Number two, a rise in host revenue, and since Airbnb operates on a commission basis, when the host earned more, Airbnb profited. I understand what you are thinking. Why would a traveller do this for free?
The main factor is a personal connection inside the community. When a traveler accomplishes something like this, their personal connection to their community improves. For example, suppose I posted on my community tab or you are viewing this video, and your personal connection with me is growing. The same thing happened to travellers who wrote about their trips on Instagram or Facebook.
Composing the reach to the roots of the local Market
Not only that, but Airbnb cooperated with local city guides in each location so that when a traveller stayed at Airbnb, the city guide could assist them. What are the closest popular cities? What are the most popular neighbourhoods nearby? So that the tourist staying at Airbnb has a better experience and feels more connected to the company. The company developed a client interaction loop by offering travel assistance.
When the company gave travel assistance to its consumers, these travellers were more engaged with the company. They would be converted into extremely devoted clients. Furthermore, in addition to being incredibly devoted clients, they would go on to become brand advocates, which means they would tell people about Airbnb for free.
The company would benefit from free marketing. As a result, the company acquired additional customers. Pineapple was a print magazine that people used to read during tea time. People began sharing their Airbnb trip experiences here. Whoever reads these stories will identify with both the company and the traveller. When you form such a connection with someone, you get attracted by their trip and want to go on it yourself. Many of us still think of Airbnb as a lodging provider. However, Airbnb is more of a travel support organisation than a stay provider.
The Photography that matters
It employs over 3000 freelance photographers across six continents to capture high-quality images of the sights. These high-quality photographs draw attention to the host website. With increased attractiveness, the host gets more rent. Airbnb benefits more from higher rents. Airbnb offers everything, from positive Google ratings to over 7 million indexed pages with user-generated content.
As a result, the organisation does not need to develop content or execute SEO, as competitors do. Most brands share the same piece of content across many social media platforms, giving the impression that they are working hard yet yielding little results. Airbnb, on the other hand, had a unique social media approach from the start. Their Instagram feed resembles a vacation diary. Their YouTube channel is full of trip vlogs, which give off an adventurous feel. Their Twitter feed includes daily lingo, which helps you connect with the company. Airbnb has built such a strong client base that individuals not only want to use it again and again, but they also spread the word about it for free.
Airbnb’s Approach to win instead of defeating others
This brings us to the most crucial aspect. What significant business lessons can we take from this case study and apply to our own businesses? The first lesson is about myopia, or thinking you know everything. When most of us achieve, we believe we know everything. We know everything. As a result, we frequently make business judgements that prove to be quite detrimental to us. Second lesson: you are your own competitor. When Airbnb first launched, there were nine similar firms.
Everyone wanted Airbnb to lose. However, Airbnb has never focused on its competitors. Their primary goal has always been to improve themselves. It is more useful to better yourself than to defeat your competitors, because you are your largest competitor.