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Brand Audit

Zach Steinert

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Table of Contents

Company 2

Category & Competition 3

Product Lines 4

Brand Analysis 5

Consumer Profile 6

Advertising & Marketing Communications 7

Media 9

Promotions 10

Internet & New Media 11

Other Pertinent Information 12

AirBNB’s Brand Value for 2014 13

References 14

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Company

AirBNB is a wonderful company/service that allows users “to list, discover, and book unique accommodations around the world.” In its essence, hosts list space they wish to rent, then through the AirBNB website, travellers can find and book places to stay while they travel. After the stay, hosts and guests will rate each other’s experience.

The company is located in San Francisco, and was founded in 2008 by co-founders Nathan Blecharczyk - CTO, Brian Chesky - CEO, and Joe Gebbia - CPO. The service has accommodated over 20 million guests, and is located in approximately 34,000 cities and 190 countries. Since 2008, the company has grown its listings from 120,000 to 300,000 in 2012. In 2012 alone, over 3 million guests used AirBNB to travel. With this exceptional growth came the addition of 11 new international offices.

In recent news, AirBNB is expanding to publication. In the past month, they published the first edition of their new magazine, Pineapple. The magazine will be a “crossroad of travel and anthropology; a document of community, belonging and shared space”. Each edition will focus on three cities, sharing the stories and experiences of the AirBNB community. Also, the company recently rebranded themselves. The new logo is called Bélo (below), and it represents four things: People, Places, Love, and AirBNB.

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Category & Competition

Airbnb is categorized within the hospitality industry, specifically travel accommodations. It is a growing innovator within the industry, which can root itself back to the first business hotel, Buffalo Statler, in 1908.

Some of the traditional competitors include large hotels (i.e. Marriott, Hyatt, Hilton, etc.), and hostels (i.e. Hosteling International, independent hostels). Contemporary competitors, with services similar to AirBNB's, include Hotels.com, Hotwire.com, Travelocity.com, Vacation Rentals by Owners (www.vrbo.com), and House Trip (www.houstrip.com). While Vacation Rentals by Owners might be an alternative for consumers, AirBNB is more pervasive in the marketplace. Not only that, but AirBNB’s website is extremely user friendly. HouseTrip has a user interface that is similar to AirBNB’s, however they still lack strong brand resonance.

AirBNB has several factors that affect its business. Since the company is global, seasonal factors vary from country to country. However, typical peak season for most hosts is Spring, and Summer. Also, because of its global presence AirBNB does face challenges in each country. One of the biggest challenges is taxes. Many countries and cities do not know how to tax a service like AirBNB, so instead they decide not to allow it at all. Most of the time local tax is included into the cost. Another issue that they face is insurance. There have been reported incidences of guests destroying host property, and that lack of protection lead to lawsuits against the company. AirBNB’s solution was to come up with a extensive insurance plan for hosts that covers property damage up to $1,000,000. In this way hosts can feel safe renting their space to unknown guests.

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Product Lines AirBNB has two main product lines: their website service, and Pineapple

Magazine. Let’s take a deeper look into both. AirBNB’s online service is unlike anything that you will ever see. When a guest

decides to use AirBNB, they have the option to create their dream vacation, or even find their dream home. The service offers accommodations exotic and local, simple and luxurious, cheap and expensive, even bizarre and ordinary. To name a few, there are listings for tiny Parisian apartments, yachts, tree houses, and even an airplane converted into an apartment that sleeps eight! Each of these many different options are left to the users discretion and fiscal means. Not only are these spaces extensive, but also they embed you into the community. When a guest books a stay, and arrives at their destination, the host will typically give you a tour of the local neighborhood and make recommendations for your vacation. Finally, after the stay, guests and hosts will rate each on a five star system. The guest considers attributes such as:

● Accuracy ● Communication ● Cleanliness ● Location ● Check-In ● Value

Guests can also leave a 500 word comment about their experience. Hosts rate guests on similar attributes. By using this type of system, guests can receive quality service from hosts, and hosts can know which guests to trust from other hosts’ reviews. AirBNB’s service will take guests away from the cookie-cutter experience that they would normally find at hotel.

On the other hand, AirBNB recently launched a new venture, Pineapple Magazine. Their penetration into the publication industry is fascinatingly innovative, and possibly quite promising. Each issue of the magazine will set focus on three different cities around the world. From those cities, AirBNB will share the stories of guests and hosts to invite readers to learn and engage in the company’s expanding community. If the magazine is a success, expansion to airport magazine stores, gas station, and other publication distributors could lead to an increase in brand recognition, and customer conversion.

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Brand Analysis

AirBNB may not be the largest brand in its category, but it is growing innovator in the industry, and their services should not be taken lightly by larger hotel brands. A study performed at Boston University tried to measure the impact that AirBNB has had on the hotel industry. In the case study, they examined AirBNB properties in Texas, and compared their revenue growth again hotels in the state. Researchers found that a “1% increase in AirBNB listings led to a 0.05% decrease in hotel quarterly revenues” (Zervas 2014). Currently AirBNB captures an increasing majority of the Millennial generation. These young adults are value oriented, and want the “personal touch”. If AirBNB can continue to engage with Millennials as they move, and grow into their careers, then there could be a dramatic shift in what the hotel industry will look like within the near future (eMarketer 2014). While the company may seem that it only offers listings strictly for leisure, they do offer programs for business travel: https://www.airbnb.com/business-travel.

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Consumer Profile The typical AirBNB user is a millennial. Millennials, also known as Generation Y,

were born between the early 1980s and the early 2000s. This demographic is diverse, optimistic, desire authenticity, and wants the personal touch. AirBNB has made a sizable dent into the millennial market. While this impact may only be limited to today, if the company can continue to engage with millennial customers as they grow older, then there is a likely chance that AirBNB will be able to take the large competitors in the hospitality industry by storm.

Most users will typically only use AirBNB maybe once, or twice a year, because many people only have a few vacation days in a business, or school year. However, likelihood of a guest using AirBNB the next year is strong. Guests are almost always satisfied with their trip, and how AirBNB was able to facilitate that for them. For hosts, many of them use AirBNB several times a years, or even within a month. For hosts AirBNB can be a strong source of income.

Many people try AirBNB for the first time at the suggestion from their friends. AirBNB relies on strong word of mouth in order for people to become aware of them. Attitudes of the company entirely depend on how satisfied the guests were after their first stay in an AirBNB. Dissatisfied customers tend to never use AirBNB again. The company is working towards continuous engagement with consumers who have complaints about the service during their trips.

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Advertising & Marketing Communications

There are several creative strategies that revolve around the AirBNB brand. I’d like to focus on their new logo design, and video marketing efforts.

Below are examples of their old and new logos:

One of the ways that I believe that AirBNB has created a stronger brand is through the implementation of a new logo. The old logos has several qualities that make it ordinary:

● Cursive font is similar to many other logos ● Sky blue color is too similar to Twitter’s and Facebook’s brand color ● The name is the logo ● Not a clean graphic

On the other hand, the new logo makes AirBNB a unique brand in the hospitality marketplace. The following are qualities that make the new logo unique:

● Vibrant, pastel, coral-pink color that grabs attention and differentiates ● It has a name that creates brand recognition: Bélo ● Recognizable symbol that can stand alone from the name of the

company ○ No relation to the old logo

● Clean, easy to read font ● Creates user engagement ● Four company values associated with logo

○ People, Places, Love, and AirBNB

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Another strategy that AirBNB uses is video marketing. These videos offer the opportunity for users to learn more about the company, user experiences, and new events. One video in particular that comes to mind is “Wall and Chain”, which expresses a powerful story about the Berlin Wall, its fall, and a guard who finds closure through AirBNB. I think that AirBNB does an excellent job of humanizing their company by sharing heartfelt stories in a video format for anyone to view in a three minutes or less. AirBNB appeals to the adventurer who is seeking a way to escape the cookie-cutter vacation. The service is a way to grow and connect a community of travellers who want to become cultured, and embed themselves into the neighborhoods that they travel to around the world. Not only are they appealing to the wandering spirit, but the service is able to capture budget seekers, families, billionaires, young, old, and cultures from around the world.

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Media AirBNB is in the online market category, because all of their business is conducted through their website, and mobile services.

● Seasonally: ○ Experience higher bookings in the Fall due to a higher

concentration of holidays ○ Spikes in bookings during holidays

● Regionally: ○ Have separate Twitter accounts for each country that they operate

within ○ Employ team members in these countries to handle with public

relations and marketing Top competing brands use social media and television to promote their brands. Hilton, and Marriott have done a good job at incorporating the holiday season into their brands by posting pictures of their hotels decorated for the holidays.

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Promotions

AirBNB’s current promotions is, $25 off any AirBNB trip if you invite a friend and they book a stay using the website. That person will also get $25 off their first stay. For users who are looking to save money, this creates incentive to invite as many friends.

Competitors such as Hotels.com and Travelocity.com promote their ability to use a program to find users the “best deal in town”, by monitoring and comparing their prices with other competitors. Not only do they try to find users deals, but these websites will also bundle flight, rental, and accommodations all together. This method makes decision making for the user much simpler. Bundling services may be an area for AirBNB to research. A partnership with a service such as Uber, or Lyft could create strong brand value for users who are seeking bundle rates. These services are an optimal choice for AirBNB since they operate similar sharing-economy models.

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Internet & New Media

AirBNB’s website is their backbone. Listings, bookings, conversations, ratings, and so much more is all hosted on their website. From the website a user will have full access to the company’s services. The company is on every major social media, which includes, Facebook, Twitter, Instagram, YouTube, and LinkedIn. Here is a breakdown of how they utilize each one:

● Facebook ○ Link back to AirBNB’s blogs ○ Post new content

■ Mostly videos, and pictures ● Twitter:

○ Source for live feed updates during events such as the AirBNB Open

○ Uses Twitter to listen and engage in guests’ conversations, or complaints

○ Link back to AirBNB’s blogs ○ Twitter accounts for individual countries

● YouTube: ○ Share host and guest stories ○ Promotional videos ○ Captures AirBNB’s vision/story

● Instagram ○ Post pictures of hosts’ spaces

● LinkedIn ○ Job opportunities ○ AirBNB’s impact to the community

There is an excellent Ted Talk presentation by Simon Sinek where he talks about how leaders inspire action. In the video he makes a very profound statement, “People don’t buy what you do; they buy why you do it.” AirBNB understands why they do things, and tries to sell the vision and the story, more so than they do the services that they provide. In every single one of their social media accounts the company has woven together a story of connection, belonging, and love.

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Other Pertinent Information

AirBNB has also been using metrics to track the impact that they have had on local economies, specifically Berlin and Los Angeles.

● Last year Berlin: ○ Had over 245,000 guests stay in AirBNBs ○ 80% of those guest were from outside of Berlin ○ On average a host made 210€/mo.

■ This totaled up to 31.5M€ in Berlin ○ Guest spent 136.5M€ in Berlin ○ https://www.airbnb.com/berlin-economic-impact

● In Los Angeles: ○ 38% of hosts came from middle to low income ○ Guest spent $946 in the neighborhoods they stayed ○ http://blog.airbnb.com/airbnbs-positive-impact-in-los-angeles-2/

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AirBNB’s Brand Value for 2014

There is no doubt that AirBNB’s brand value has increased in the past year. Whether they redesign the company logo, or aggressively expand territory to challenge the hotel industry, AirBNB has done an excellent job at improving their brand appeal. The executive members have a clear understanding for the company’s purpose in the marketplace, and why consumers need their service. The company envisions a world that has a strong sense of community, and an openness to connect. That deep understanding drives the content that we see AirBNB provide to its social media followers. Also, statistically speaking, AirBNB has had some breakthroughs into the business market. An increase in AirBNB listings does create quite a negative, impactful result for the hotel industry. If AirBNB can continue to push into the millennial market, we may just see a shift in the hospitality industry. AirBNB has been in the market for almost seven years now, and shows no sign of leaving anytime soon. As long as the company continues with their current agenda, AirBNB will be one of the top hospitality brands in future.

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References:

eMarketer.com. (2014, Jul. 30). What’s Airbnb’s Future as Millennials Move from Backpacks to Briefcases? eMarketer. Retrieved from http://www.google.com

Zervas, G & Proseprio, D. (2014, Jan. 22). The Rise of the Sharing Economy: Estimating the Impact of

Aribnb on the Hotel Industry. Boston University School of Management Research Paper Series, No. 2013-16. Retreived from http://www.scholar.google.com

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AirBNB

Brand Exploratory

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AirBNB Survey

I conducted a Qualtrics survey on the Internet that asked respondents questions about their experience in the hospitality industry, and also introduced them to some of AirBNB’s services, and what they thought about them. 65 respondents completed the survey. Below I will present the questions, their results, and my interpretation of the results.

1. When planning for a vacation and choosing a place to stay, what attributes do you consider to be important? Please rank the following (Unimportant to Very Important):

a. Location: Mean = 4.58 b. Price: Mean = 4.60 c. Hotel Brand: Mean = 2.94 d. Nearness to Attractions: Mean = 4.02 e. Customer Service: Mean = 3.85

i. Interpretation: The two most important attributes to consumers are the Location and Price of a hotel. Hotel Brand was the least important to consumers while determining where to stay.

2. What is your most common reason for travelling? a. Pleasure: 43% b. Visiting Family and Friends: 49% c. Business: 6% d. Other: 2%

3. Which of these best describes the farthest that you have travelled? a. Only in the state I live: 0% b. Bordering States: 2% c. Within the United States: 25% d. International: 74%

i. Interpretation: We are becoming an increasingly global community.

4. Have you ever used a website like Hotels.com or Travelocity.com to book a hote?

a. Yes: 52% No: 48%

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5. Please list as many hotel brands that you can think of: ( I will give you the top 5)

a. Hilton: 31.06% b. Holiday Inn: 21.21% c. Marriott: 18.94% d. Hyatt: 15.91%

e. Double Tree (Hilton): 12.88% i. Interpretation: These are the Top 5 hotel brands that people

can recall from memory. These hotels have good brand recall.

6. Have you ever stayed in a hostel? a. Yes: 20% b. No: 80%

Interpretation: Americans are not used to the hostel culture. Not as many hostels available in the United States.

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7. Have you seen this symbol before? a. Yes: 12% b. No: 88%

i. Interpretation: AirBNB’s symbol needs more exposure. 8. Have you ever heard of AirBNB?

a. Yes: 45% b. No: 55%

i. Interpretation: They have name recognition. AirBNB redesigned their logo this past year. Maybe it needs time to take traction.

9. How likely are you to stay in an AirBNB if: (Very Unlikely to Very Likely, 7 options)

a. You had the entire place to yourself?: Mean = 5.68 b. You had a private room?: Mean = 4.75 c. You stayed in a shared space?: Mean = 2.78

i. Interpretation: Diminishing results as privacy is reduced. We can point back to living in a culture where privacy is important.

10. How likely are you to rent out your home to guests using AirBNB? a. Very Unlikely: 38.46% b. Unlikely: 16.92% c. Somewhat Unlikely: 13.84% d. Undecided: 13.84% e. Somewhat Likely: 10.76% f. Likely: 4.61% g. Very Likely: 1.53%

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11. AirBNB covers up to $1,000,000 in property damage. How likely are you

to rent out your home to guests now? a. Very Unlikely: 21.53% b. Unlikely: 12.30% c. Somewhat Unlikely: 9.23% d. Undecided: 20.00% e. Somewhat likely: 10.76% f. Likely: 16.92% g. Very Likely: 9.23%

Interpretation: Positive shift that respondents are more willing to try hosting with an insurance policy that protects themselves.

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Recommendations

I recommend that AirBNB do three things: increase the new logo’s exposure, raise awareness of hosting security, and continue their growth in international markets.

● The study I conducted showed that respondents recognized AirBNB’s name, but not their new logo. This recent change was made in just the last year, but it is so crucial that the company capitalize on gaining exposure. With a new logo that is memorable, recognizable, and unique to the company, this should not be a problem at all. Here are some ideas that come to mind: ○ Get people talking about the logo ○ Have a few exclusive blogs promote the new logo ○ Have a Bélo Instagram Contest of travellers recreating the logo

during their AirBNB stays ● Not only should the light be shined on the logo, but also on AirBNB’s

safety and security features. The survey showed us that people are not really willing to host, and this probably arises from a person’s natural sense of distrust from strangers. However, when told that AirBNB will cover property damage up to $1,000,000, responses shifted towards a willingness to host. Remember that a 1% increase in AirBNB listings leads to a 0.05% decrease in hotel quarterly revenue. If the company can increase its supply of properties, it can unlock the hospitality market. Here are some ideas to help consumers feel more secure about hosting: ○ A downloadable “Hosting Guidelines” pamphlet for first time hosts ○ A promotion, or incentive for hosting ○ Business Travel buy-in

● Finally, the company should continue its growth in international markets. 74% of respondents said that the farthest they had travel was internationally. As the world becomes increasingly global, the ability to travel becomes cheaper, and easier. By becoming an affordable option that is in all marketplaces, AirBNB can become a leader in the hospitality industry.