Airbnb wants to be the one stop shop for booking vacation getaways from a
based model also knows as a
. This allows for fast and convenient getaways for travelers for various vacation reasons and even business travel.
Renters can rent a vacation home from Homeowners easily, and in general, for a much more affordable price for both vacation getaways and business travel when compared to popular digital travel agencies like
Before we dive into areas of improvements and possible solutions, it’ll be important to evaluate the product in various categories in order to get a sense of strengths and weaknesses:
Product Evaluation Scorecard
Meaningful Problem To Solve? Absolutely, disrupting the vacation industry from a peer-peer economic- based model is makes it appealing to any adult traveler
Differentiators? Offers ‘Experiences’ both online and in-person to help expand upon the ‘Places to Stay’ area for which Airbnb is known for
Finances and Revenue
Total Funding: 1 billion
Estimated Market Share of Vacation Rentals: ~20%
Booking.com: Recently released a ‘Homestays’ section
Local States & Government: Partners with states and local governments to help promote tourism recovery from the COIVD-19 pandemic
Transportation: Non-existent which is a key component for any vacation or business trip
Meaningful Problem To Solve?
Absolutely, disrupting the vacation industry from a peer-peer economic- based model is makes it appealing to any adult traveler
Yes, whether it be by demographic, age or traveling trends. 60% of bookings in 2020 were from millennials, just as an example. Most of the Renters on Airbnb, are young millennials that usually travel in pairs of 2-4 person groups.
Any customer can easily sign-up as a renter and begin to search for their getaway. Furthermore, the homeowner signup process to induce an easy-to-setup peer-peer model can be done within minutes as well
32 NPS via https://www.comparably.com/brands/airbnb#nps
Overall the takeaways from Airbnb are that it is a strong product and has an extremely large presence, as well as market share, of the vacation housing rental. Though there aren’t noticeable large problems within the business itself, there are some shorter-term strategies that could be applied, which we will dive into below.
A Key Part of The Renter Journey That Needs to Be Addressed
As the infamous 2020 COVID-19 Pandemic comes to a close, one of the key areas that people around the world are starting to see a spike in, is travel. As the #1 home rental platform, Airbnb’s traffic and home rentals are beginning to rise again, which reintroduces a common
that has yet to be solved for the business:
‘When going on vacation, Airbnb Renters shouldn’t have to worry about transportation, so that they can enjoy their vacation knowing that they have the means to explore.’
A common misconception is for someone to purchase a rental car, but if you closely look at the journey of renting a car it may seem easy, but in reality, can be a nightmare. Such issues can include:
Rental Car unavailability
Additionally, as Airbnb sees heavy utilization into in-person
and its offerings, Renters may want to have travel accommodations to those events as well.
Considerations & Questions
What Data is Available to Us? What Data Do We Need?
How many Airbnb Homeowners have a personal vehicle?
Where are the top rental car cities/states geographically, in relation to number of Airbnb Rentals?
How many Airbnb renters purchase Experiences that have a driving distance > 1 mile with their Airbnb home rental? Where do these purchases occur (city vs rural)?
What/Where are the largest number of Airbnbs that can only be accessed by car in relation to an airport?
Where are current car rental rates the highest?
What cities offer the most Uber or Lyft
Which cities is Uber struggling the most in comparison to Lyft
Who are our current casual, core, and power users?
What are the top buying/travel behaviors of our Renters and Homeowners?
Below, we will outline the high level experiences that we will want to introduce in a phased approach in terms of the ‘
Adding a Ride’
initiative. This will be done in phases over a 3-6 month time-boxed period. A key goal here is to maximize our
with minimal development costs and amount of effort on our part in order to reduce/maximize the following:
Implementation and associated costs
Improve our reach and impact to renters
Improve our brand with homeowners and renters
Add a Ride Goals
Our goals within the first 3 months for Add a Ride are as follows:
Implement Phase 1 and start build on Phase 2/3 within the first 3 months
Implement Phase 2/3 between 3-6 months
An increase in Airbnb’s monthly MRR by 10%
A Higher NPS for the renter and the owner within 3 months of launch
An increase in the average passive income per homeowner by 5% within 5 months
Metrics for Success
Strategy and Economics
How does Adding a Vehicle feature improve the Business?
If we were to increase the service for renters by 1.5% on average, then we can improve our MRR from the Renter channel. Currently, there is a non-refundable fee for renters that holds at 14.2%. With the introduction of the vehicle rental, we would increase it to
If we were to increase the service fee for homeowners
that include a vehicle
by 1.5%, then we can improve our MRR from the Owner channel. Currently, there is a 3% charged fee to owners with every booking. With the introduction of the vehicle rental, we would increase it to
4.5% per booking.
If we were to partner with uber and take a share of the booking fee, we could increase our revenue by x%
If we were to partner with different rental car vendors (AVIS, Enterprise etc.) and take a share of the reservation fee, we could increase our revenue by x%.
Airbnb connects travelers seeking affordable lodgings with hosts who offer their properties as short-term rentals.
Renters are charged a nonrefundable service fee of under 14.2% based on the listing. We would increase this rate by at least 1.5% for each booking.
Hosts are also charged a fee of no more than 3% for every completed booking.We would increase this rate by at least 1.5% for each booking.
Dependencies & Considerations
Reusable components from Adding a home for renter flow
Additional data tables and endpoints needed from the BE to call for client-side apps:
Owners to add/edit car listings
Renters to be able to modify their listings
Renters to be able to get refunds allocated to car rentals
What are the potential legal liabilities for both the renter and homeowner
Do we need to partner with any insurance providers in terms of protections
What do we do incase there is an accident? What services do we provide as Airbnb?
What happens if there is a dispute between the renter and owner regarding the vehicle’s condition pre/post stay?