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.
- New guest recruitment reflects the importance of search as a digital shopfront: for the year 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”.
- Short travel (50 miles or fewer) has also proved resilient.
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.
Sourced from Airbnb, Fast Company, WARC