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PRD: Airbnb Customer Loyalty Program

Building customer loyalty through delight

Tijana Laban

Why loyalty matters?

Competitive landscape

SuperGuest MVP

Host Community

Program Cost Structure

Project:

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EDIT INFO

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Team:

@Retention Team

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Contributors:

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TL;DR:

Airbnb customer loyalty program

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Status:

@Planning

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Shipping:

[ ]

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Problem Alignment

The Problem

Airbnb, a global leader in short-term rentals and unique travel experiences, has achieved significant reach, with over 7 million hosts welcoming 2 billion guests worldwide. In 2023, Airbnb’s financial growth was strong, showing an 18% revenue increase and an 11% rise in room nights and experiences. However, by the second quarter of 2024, growth in key areas slowed, with net income falling 14% to $555 million, a contrast to the prior year’s 71% increase.

Airbnb holds a 20% share of the market, with strong brand recognition and name familiarity. However, little differentiates Airbnb from competitors today. Companies like Vrbo, Booking.com, and Expedia are gaining traction, largely due to their loyalty programs, which are attracting and retaining travelers. For example, Vrbo’s "One Key" and Booking.com's "Genius" programs offer valuable perks to frequent users, an area Airbnb has yet to explore.

Frequent Airbnb users, such as travel expert Sam Kemmis on

Nerdwallet⁠

.com, have already highlighted this gap:

“Since 2016, I’ve spent $26,243 on 50 bookings with Airbnb. That’s more than I spent with Amazon in the same time period — $10,434 — and probably more than I’ve spent with any single company over that span. So I must have, like, Ultra-Adamantium Elite status with Airbnb, right? Unfortunately, no, because Airbnb doesn’t have a loyalty program. There’s no elite status to earn, points to accrue or little welcome gifts to receive at check-in. Despite spending a small fortune with the vacation rental giant, I don’t even get a cool badge next to my username. “

Industry benchmarks suggest that loyalty program members can spend up to 18% more annually, with retention rates 5-10% higher than non-members. Assuming a 10% improvement in the annual retention rate of frequent travelers (approx. 1 million users), we could anticipate increased annual revenue in this segment by approximately $130 million. The assumption is based on the CLT of $1300 for frequent traveler.

With competition from brands with loyalty programs, Airbnb could see a further decline in retention if this gap isn’t addressed. Introducing loyalty now strengthens its value proposition by appealing to its frequent, high-value travelers and positioning Airbnb as a platform that rewards loyalty, reducing the appeal of competitors’ programs.

High-level Approach

To address Airbnb's need for customer loyalty, we’re proposing the development of a tiered loyalty program, “SuperGuest,” that rewards frequent users with benefits to incentivize repeat bookings and deepen engagement. This program will feature progressive tiers, offering perks like discounts, early check-in, exclusive experiences, and travel recommendations as users advance.

Our approach will start with validating user interest through surveys and a pilot program in US. Based on feedback, we’ll refine the benefits and expand globally. This solution will integrate with Airbnb’s current platform, involving product updates, UX design for an easy-to-use loyalty dashboard, and marketing to create awareness.

Our focus are frequent Airbnb travelers, especially the ones who alternate between Airbnb and other booking platforms. Hypothesis we are starting the research with is that Airbnb users will show higher retention and booking frequency if offered rewards and exclusive perks through a loyalty program.

Goals & Success

Goals:

Increase Customer Retention: Boost the retention rate of frequent travelers by incentivizing repeat bookings with meaningful rewards. Beyond rewards, Superguest aims to build a community of explorers, inspiring travelers to share experiences, follow local guides, and interact with hosts for a more enriching travel experience.

Enhance User Engagement: Encourage engagement with the Airbnb platform by leveraging data to offer users personalized travel recommendations and tier-specific perks, enhancing each guest’s unique experience on Airbnb.

Differentiate from Competitors: Establish a competitive edge by implementing a unique loyalty program that matches or exceeds offerings from competitors like Vrbo and Booking.com.

Build Host Relationships: Strengthen partnerships with hosts by identifying high-quality guests through the loyalty program, enhancing trust and reliability.

Drive Revenue Growth: Increase gross booking value and revenue through greater booking frequency and higher customer lifetime value.

Success Metrics

Success Metrics

NorthStar Metric

Primary Metrics

Secondary

Re-Book Rate

Number of nights booked

Customer satisfaction score

Customer Retention Rate

NPS

Tier Advancement

Host Retention Rate

Redemption rate

Churn Rate

Customer Lifetime Value (CLV)

Support requests related to Loyalty

Discounted Booking Revenue Loss

Host Churn Rate

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Solution Alignment

Key Features

Launch the “Airbnb Superguest” loyalty program, designed to reward frequent Airbnb travelers. It is hybrid loyalty program that combines Tiered structure, exclusive perks and point based system. As guests book and engage with Airbnb, they move through four loyalty tiers, gaining access to increasingly valuable rewards. Aim of the program is not to pay for customer’s loyalty but to create long-lasting bond as consequence of improved overall travel experience.

Tiered Reward System

Three tiers (SuperGuest level one, two, three) with progressively better rewards as users advance. Progress is tracked by stays and platform engagement like no of reviews. Users progress through tiers after reaching a target number of bookings per each tier. To reach second user needs to have 20 nights successfully booked and for level 3, 40 nights within a 2-year window.

Tier one: Discounts on experiences, early access to select stays, instant booking. Appeals to casual travelers and experience-seekers.

Tier two: Early check-in, late checkout, extended-stay discounts, curated recommendations. Targets frequent travelers and digital nomads.

Tier three: Milestone rewards, special perks for long-term bookings, workspace benefits, priority support, exclusive experience access. Attractive to frequent users across all segments.

Benefits, perks and rewards

Discounts on stays and experiences: User can have up to 15% off on bookings (stays, experiences and transportation) on SuperGuest level 2 and up to 20% on level 3.

Exclusive Perks: Early check-in, discounts on popular experiences, and access to unique stays as users advance in tiers.

Milestone Bonuses: Reward users with bonus points when reaching milestones like 20, 30 and 50 nights booked.

Book ten, get one for free - Offer one night free for 10 consecutive nights at the same rental.

Personalized Experience Recommendations - Based on past bookings, users receive experiences and stay suggestions that align with their interests like like a personalized welcome note from the host, a discount code for experiences, or free Wi-Fi if otherwise charged.

Anniversary Rewards - Special annual rewards, such as a one-time discount or free experience, to celebrate user loyalty.

Loyalty dashboard

Users can access the loyalty dashboard in the profile section. Main parts of the dashboard are:

Progress bar on where in the loyalty journey user is and what comes next.

List of unused discounts and coupons.

Total savings - how much money user has saved as SuperGuest member

FAQ section

Available in both mobile app and on the web.

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We are starting with activity-based rewards in the

MVP⁠

as they are easier to implement and understand and that system encourages engagement regardless of spend while attracting diverse travelers. Moreover, Airbnb started as alternative to hotel accommodation, and people turned to it mainly due to affordability, which is why we will target frequent travelers but not necessary high spenders. Customers earn points on all bookings on the platform (rentals, experiences etc) that accumulates for Tier advancement. This approach includes broader audience which is why it’s our starting point.

Activity-based system is less attractive to high-spend users that want to feel valued and special, so in next iteration we will test special rewards awarded after certain spend threshold is reached e.g. for every $500 spent, user gets 50% off from selected experience. With this hybrid approach, we will best balance engagement and revenue goals.

Target Segments

Frequent travelers

Key segment we are focusing on are frequent leisure travelers who book multiple times a year, value consistency in quality and amenities and seek unique experiences.

This group has a higher lifetime value and is more likely to benefit from a tailored loyalty structure that incentivizes repeat bookings and referrals.

Data from similar loyalty programs in hospitality and travel industry shows that frequent, higher-spending customers respond well to tiered reward structures, indicating potential gains if a similar approach is taken.

This segment seeks trusted, convenient stays, often seeking perks that ease the booking experience, such as priority support, early check-in, or flexible cancellations, which could address their pain points and enhance loyalty.

Other segments include:

Casual travelers

Users who book with Airbnb 1-2 times per year, usually for leisure trips.

Bookings tend to focus on affordability, and unique experiences.

Often consider alternative platforms for deals or loyalty perks.

Feel little or no connection to Airbnb.

Business travelers

Professionals booking for work-related travel, often in urban locations.

They prioritize convenience, reliability, and amenities conducive to work.

Focus on comfortable, well-located, and secure accommodations with reliable internet and workspaces.

Appreciate hassle-free check-ins, responsive customer support, and flexibility in bookings.

Remote workers

Professionals who work remotely and frequently travel, booking long-term stays

Seek comfortable, work-friendly accommodations with amenities like Wi-Fi, kitchen facilities, and proximity to coworking spaces.

May prioritize locations with good weather, affordability, and flexible cancellation options.

Family and group travelers

Families or groups booking larger accommodations for vacations, reunions, or special events.

Look for accommodations with amenities like kitchens, multiple bedrooms, and family-friendly features.

Value space, safety, and access to activities for all ages.

Out of scope

Personalized rewards.

Points based system that will award users points per dollar spent.

Loyalty badges

Host alignment and campaigns to increase host participation (This is the scope of B2B retention team)

Key Flows

Customer Journey

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Risks and Trade-offs

Risks

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Red alerts

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`2 of 8 risks`
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Yellow alerts

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`5 of 8 risks`
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Add a known risk

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Risk map

Risk map

Topic

Red

Yellow

Green

The loyalty program may increase costs if high-value rewards reduce revenue.

Potentially high operational and development costs

Decreased host earnings that can affect host’s trust in the program.

Overloading customer support with tickets related to new program.

Success of the program depends on the willingness of hosts to participate.

Over-incentivizing lower-value bookings.

Alienating hosts if perks undermine their control over pricing and booking policies.

Program complexity and confusion about the tier structures.

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Severity

Severity

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Trade-offs

Allocating resources to a loyalty program could delay other initiatives, but if successful, the program could drive higher customer lifetime value and frequency.

Immediate costs will affect short-term revenue as costs increase but can positively affect long-term revenue.

Personalization will require more investment in data analytics, tailoring benefits per tiers and can bring more traction, but duo to the risks, we will start with standardized perks and iteratively add more personalization and tailored benefits.

Simplified tired program is easier to start with and to understand, but we can add more tiers and benefits in the future.

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Launch Readiness

Key Milestones

Date

Milestone

Audience

Description

Sat, Nov 30

Research and Ideation

Internal: Product team, engineering, designers, marketing, CX, leadership

Customer and host surveys done and the need validated.

Internal stakeholders aligned on program vision.

Fri, Dec 27

MVP

Internal: Product team, engineering, designers, marketing, CX, finance, leadership

Loyalty programe framework defined

Technical infrastructure defined

Financial modeling finished

MVP scope agreed

Fri, Jan 31

Prototype ⚙️

Internal employees

Prototype of the loyalty dashboard built, showing points, tier progression, and sample rewards.

Sun, Mar 30

Alpha 📝

Internal employees

Run the program internally with a small group of employees to gather feedback on the user experience, identify potential bugs, and refine the UI.

Iterate based on the internal feedback

Mon, May 5

Beta 👥

Early cohort of 10 000 customers

Launch the program in a few key markets to observe real user behavior without a large-scale rollout.

Run A/B tests to determine the optimal combination of rewards, points and tier thresholds.

Track enrollment rate, engagement, retention, and tier advancement metrics to assess program impact.

Collect qualitative feedback from beta testers on the program’s perceived value and any areas for improvement.

Tue, Jul 1

Loyalty v01.2

Internal

Adjust reward types and points based on beta data and feedback

Ensure the loyalty program can scale effectively by running stress tests on the back-end systems and identifying any potential bottlenecks

Prepare documentation and training for customer support and operations teams to handle program-related inquiries.

Mon, Sep 1

GTM

Internal

Define and plan GTM strategy

Develop marketing plan such as email campaigns, push notifications, and in-app promotions to educate users about the program.

Create an onboarding flow for new and existing users that highlights the loyalty program, its benefits, and how to maximize their rewards.

Tue, Sep 30

Launch! 🚀

Gradual ramp over the day to 100% of all users

Roll out the loyalty program globally

Continue A/B testing different reward combinations and messaging to optimize program engagement and satisfaction.

Track the north star metric along with sub-metrics (enrollment, tier progression) and counter-metrics (e.g., customer churn, support tickets)

Sat, Nov 1

Post-launch reviews

All users

Conduct a post-launch review with data on user engagement, retention, revenue impact, and host satisfaction.

Identify next-phase enhancements

Plan long-term scaling strategy

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PRD: Airbnb Customer Loyalty Program

Problem Alignment

The Problem

High-level Approach

Goals & Success

Solution Alignment

Key Features

Tiered Reward System

Benefits, perks and rewards

Loyalty dashboard

Target Segments

Out of scope

Key Flows

Risks and Trade-offs

Red alerts

⁠2 of 8 risks⁠

Yellow alerts

⁠5 of 8 risks⁠

Launch Readiness

Key Milestones

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`2 of 8 risks`
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`5 of 8 risks`
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