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20 November 2020
Airbnb highlights importance of brand for loyalty
Brand loyaltyHotelsUnited States
Booking platform Airbnb has published its IPO prospectus – an opportunity to peer under the hood at its long-term strategy.
Why it matters: Loyalty among both hosts and guests is crucial, with revenue retention growing over the course of years, and the prospectus makes clear the importance of brand to the overall project.
Attracting and keeping hosts is crucial to Airbnb’s strategy, which it does through word of mouth and organic channels, with the brand at the centre of this effort.
For the year to September 2020, “approximately 91% of all traffic to Airbnb came organically through direct or unpaid channels, reflecting the strength of our brand”.
Brand strength and community are central to driving revenue and loyalty. In 2019, 69% of revenue came from repeat guests.
Longer stays are growing as “work-from-home becomes work-from-any-home … the lines between travel and living are blurring”.
The Total Available Market is estimated at $3.4 trillion, broken down as:
$1.8 trillion for short-term stays
$210 billion for long-term stays
$1.4 trillion for experiences.
Airbnb has clawed back a Q3 profit, a bright spot in a filing whose fortunes will likely be read as a bellwether for the global travel industry. But achieving that profit has required laying off 25% of its staff and cutting nearly $400 million from its advertising budget – a potentially risky strategy for a platform business that needs to keep both hosts and punters interested.