What should Airbnb's strategy be during the COVID-19 pandemic?

1. Scope: 

   1. Talk about airbnb: It is an online platform which connects tourists(leisure/business) with local homeowners. Their mission is to allow anyone to feel like they belong to the place rather than just a tourist and to be able to plan their entire trip using the airbnb app. 

   2. So during pandemic when people are not stepping out of their homes much, how should airbnb continue to survive? This is what we are trying to solve, is that correct? - Yes.

   3. Are we thinking about any particular metric to focus on? -No, just survival as you said. 

   4. Okay so considering the stage airbnb is at, it has acquired quite a lot of users but given the pandemic, engagement must be something that they must be struggling with so I would like to focus on that. 

       

2. User segment: We have 2 broad categories:

   1. Homeowners: People who are locals at a place and want to lend their place to travelers for accommodation among other facilities 

      1. Who have created separate place for tourists to stay and enjoy their vacation

      2. Who are subletting room(s) in their homes where they are themselves staying

   2. Tourists: Folks who travel to places where they do not own an accommodation and have to rely on rentals like hotels/hostels/motels, etc for accommodation. 

      1. Business related travelers

      2. Leisure - solo travelers 

      3. Leisure - group travelers 

Right now both segments are facing problems so lets see what their problems are and then we will talk about which segment to pick. 

 

3. Problem: 

   1. Homeowners: Struggling to get a stable earning as their main source of income is tourism.

   2. Tourists - Not traveling because of health concerns and because of restrictions on travel (across states or across countries).

       

So if I think about airbnb mission, we want to make users feel like they are belonging elsewhere without having them to travel while also giving some way for homeowners to make money. 

Firstly, I would like to focus on tourists as our business has stopped moving because of them during the pandemic. So solving their issue will definitely have a large impact and will automatically solve homeowner's problem.

 

4. Solutions: We need a way to keep the users active on the app/site(no specific focus on any platform like mobile or laptop) and eventually have them make some sort of transaction as well.

   1. Community building: Conduct weekend online meetups where we ask folks to “Did you have to cancel your Goa plan this month because of pandemic so join in to get a feeling of being in Goa”. 

      1. Have some local shop owners, homeowners on this call and keep a segment where they get to showcase their speciality and if they want then even advertise some merchandise that they want to sell online to attendees of this call. 

      2. Have banners on site for local merch of different places - Help these localites to come up with these merch, pack and ship them. 

By doing so, we have solved both segment’s problems. Homeowners have some way to earn money and tourists have some way to get a feeling of belonging to those tourist places without actually visiting those places. 

 

Does this solution sound good or shall we  reconsider the problem again to come up with more solutions and then prioritize amongst them? - Lets try to think of more solutions.

I have a bias in mind for this solution as I would have personally enjoyed this if something like this were to happen during those times. So to think of more solutions, I would like to go back to the problems we have listed so that I can think of more solutions. 

 

2. For introverts who do not want to participate in interacting with strangers online but want to enjoy the local beauty (natural beauty), we can have travelers upload their photo dump on our platform. 

   1. How to motivate people to upload pictures? - Have a photography contest location-wise. So different winners for different locations. 

   2. How to bring people who are not photographers to the platform? - Entice users to look at the beautiful clicks of Goa from the travelers around the world. 

These contest would be judged based on number of likes on a picture. This will also help with photographers sharing link of their portfolio on airbnb, bringing in new users to the platform organically (reducing CAC). 

 

5. Prioritization: As I seem to have a personal bias for the online meetup solution so I would sit down with other members of the team to brainstorm which idea could create more impact. I would also test MVP both products by 

   1. Organizing a zoom video call 

   2. Organizing a contest on instagram with giveaways of in-app coupons. 

Then see which idea is gathering more crowd, and accordingly think about which solution will bring more engagement to the platform. If we are thinking about revenue, 1st solution will help with that then our solution prioritization becomes much easier. For the scope of current discussion, I would like to continue with the solutions of online weekend meetups. 

 

6. Metrics: 

   1. #attendees in the meetups

   2. #sellers (localites of tourist places) onboarded on to the platform

   3. Avg no of merch sold per seller

   4. Gauging how much are people talking about these meetups on social media platform like Instagram to understand organic acquisition of new users. 

 

 

                                                 Air BnBs strategy during Pandemic – So that they remain in business during the pandemic and are also prepared for the times after the lockdown

 

1. I think the first thing that Air BNB should do is to either entirely stop charging whatever fees they are charging businesses for renting their space on Air BnB or reduce the rates or give a credit line - for the period of the lock down. So that people do not have to worry about how they can manage paying the fees when there is no revenue – Some Empathy!! Air BNBS entire business is dependent on the hosts who are renting their space – so Air BNB needs to look after these small business owners
2. Ensure that people who have booked in advance before the lock downs, get a fair deal in terms of cancellation. It’s no one’s fault and this is the time to show some heart. 
3. Make sure all the Covid guidelines are available for all the people who are booking space on AIR BnB.
4. Air bnb should encourage the hosts to make their places covid friendly by giving users basic covid kits with Masks / Sanitizers / Steamers.
5. Try to give users new options to book spaces for a long time so that they can do their work from home from these places. Instead of booking for a few days allow users to book for multiple months.
6. Air BNB should tie up with organizations which have frontline workers who might want to stay away from their families to keep the families safe and arrange accommodations for them at a reasonable rate.
7. People are consuming a lot of digital content while at home during lockdown. Air BnB should run virtual travel tours so that people remain excited about travelling. This will also allow them to earn some advertising revenue which can be helpful in the absence of their standard revenue which comes from bookings.
8. With the standard business not operating this time can be used to take up some User experience initiatives which might have been put on the back burner while managing high importane business priorities. So that when the users return back to booking space they have a better experience.

 

 

Understand 

What does Airbnb Do? Let's users book their home-like stay experiences to the properties listed by the host for rental accommodation. 

What is the core value proposition(CVP)? 
Users - 

• Let's users browse, discover, and book their choice of places to stay during their vacation/traveling. 
• Accommodations are generally localized and rates are comparatively cheaper. 
• You can experience local cuisine, local events, and popular events nearby
• It makes sure that your overall experience of vacation was top notch

• Let's you put your property on rental and take full responsibility for the same. Solves for the trust. 
• Let's you build connections with folks across the world. 

1. More affordable, can stay longer without burning a hole in their pocket.
2. Localization of the stay experience plus a homely feeling
3. Community experiences in form of events, places to eat, etc. 

1. Trust of the users booking an unknown stay in form of hygiene, covid safe guidelines followed sanitized areas, etc. 
2.  Users traveling for work would stay for a longer duration thus allowing users to book for a long duration at ease 
3. Building virtual experiences for users/hosts to enjoy/create for those who can't travel. 

 

 

Assumptions - Traveling users would find it convenient to choose a location that follows all the safety guidelines and is a trustworthy platform. 
Non-traveling users already have trust in the system and are a part of the community thus are more likely to buy virtual experiences from Airbnb. 

List of potential strategic implementations that Airbnb can use - 

1. Assessing all the properties that are being listed are following strict covid guidelines and then rating them on the safety, and hygiene parameters. Also, making it mandatory for every host to give sanitizer PPE kits, etc which will factor in the overall rating system. 

2. Brokering a deal with hosts to put the property for a longer rental timeframe for lower costs and also at a reduced commission to support the hosts. Someone traveling to a new location might need 14 days of quarantine so this can be the best place to quarantine yourself. 

3. Listing the property for healthcare, frontline workers, etc. Enabling hosts to put up their property for accomodating healthcare workers etc. This will enable hosts and Airbnb to have a long steady income despite not having travelers. Airbnb will have to source govt and hospital contracts to marry such demands with the supply on the platform. 

4. Let existing hosts, users, or new users host virtual events such as pottery classes, cooking classes for local specific cuisine, or virtual whale watching sessions. 

Framework to evaluate and prioritize the strategies - 

Scale | Impact | Speed | Effort 

Strategy	Scale	Impact	Speed	Efforts
Building safety rating systems for listings	High	High	Medium	Medium
Longer rental durations for listings	High	Medium	High	Low
Listings for healthcare and frontline workers	Medium	Medium	High	Medium
Virtual Experiences	High	V.High	Medium	Medium

 Summary:- 

Primarily, the most opportune and quick strategy to implement would be to solve for the longer duration rentals, which can be implemented very quickly and would solve for the prime use case of quarantine during work travel. 

Airbnb should focus on solving the trust of the traveling users by building a good rating and review system from their end across the mobile app and web. 

Next, given the size of the community and the CVP experienced by the community, next Airbnb should really facilitate users to experience the localized experience of any region across the world while sitting in the comfort of their home, Product should solve for convenience and comfort. 
 

cheers,

 

 

 

 

 

 

Clarifications/Assumptions

 

1. The strategy to increase in Airbnb revenue or manage the operating cost or customer retention or increase in customer footfalls or launching a new line of business to the specific geographies

Assuming - it is revenue generation and increase in customer base that has been hampered due to lock down and restriction in travel

 

2. What is the scope of impact? Do we need to focus on Airbnb as whole or to the specific high risk countries where the contagious rate is high and death rate is high?

Assuming - We need to strategize as a whole and not just limited to high risk countries

 

Describe the company & Product

Airbnb works on aggregator business model and provide a platform to the hosts and travelers where the owners can list their property for rent and travelers can opt and stay on it while paying rent. Airbnb charges service fee or transaction feed for each deal/transaction from the host and travelers.

 

Strength of the company is the strong network of people and properties and the goodwill that has been built over a period of time.

 

Weakness: The revenue model is totally dependent on the service fee from host and travelers who uses the property on temp basis and no other alternative is being opted to diversify the portfolio of the business atleast to cover the unsystematic/uncalculated risk.

 

Strategic choices

We can go for two type of choices

1. Choices to bring back the business with steady inflow of cash during the covid period
2.  Choices with long term horizon to combat with similar kind unplanned risks in future

 

Choice A

 

1. Convert the properties as isolation centers where the suspected travelers can spend their self isolation time
2. Convert the properties as home quarantine centers as there is big chunk of population who do no have too big house with large families to manage the isolation for the infected patient with proper care
3. Convert properties as camps where private hospitals can carry the vaccination drive
4. Convert properties as camps where private labs can carry on the sample testing activity on the samples that has been collected at various places. 
5. Convert the properties as covid dedicated hospitals with beds to continue the treatment at large scale when the hospitals are struggling with beds and space issues for the patients
6. Convert the properties as a residential place for the hospital staff and doctors and the reporting media staff who are exclusively performing the covid duties and return to a place for rest after completing the duty hours in the hospital
7.  Use the property as temp storage used by the IT professionals who are moving to their native place and continue working from home but will come back to the city once everything will be back to normal

 

Choice B

1. Once the travel restrictions will be removed then the company should start giving offering and discounts to the travelers to motivate them to travel
2.  Entering into the catering contracts where AirBnb act as a platform and caterers can take the contracts for food services virtually for large scale functions like marriage, funerals, birthdays etc A diversified line of business along with individual or family orders
3.  Business can also be diversified in the transport business by providing hygenic cab facilities for short travels and premium courier services. The transportation of goods and courier helps to occupy the property as temp godowns

 

Evaluation of choices

 

I would like to evaluate Choice A as this is significant from covid standpoint

All the options in choice A are worthy to execute as this will improve user experience where in covid time people are not getting better place for isolation, quarrentine even after spending good amount of money.

 

Using the properties as testing labs might be tricky and will call out for additional expenditure as the labs should be appropriately equipped to carry the testing of samples

 

Properties can be used as covid dedicated hospitals but the patient needs to be shifted to the technologically advanced hospitals if the condition get deteriorated for the specific issue like cardic arrest or kidney failure where immediately dialysis is needed and that should happen quickly to avoid any unfortunate. Therefore execution will be difficult for the extreme cases. There will be upscale in the revenue as people are ready to spend money to get proper facility but due to scarcity of space and resources it is not happening. The customer adoption will be also high as the competitors will be the posh hotels acquired by the government on temp basis that may charge high or the overcrowded hospitals where the environment is distressed witnessing the high death rate of the people.

 

Recommendation of choice

Use option 1 to 7 except option 4 where we need to manage labs as the cost of execution is high and efforts are more. Also, the temp hospitals should be maintained nearby to the technologically advanced hospitals to manage the transfer of critical patients operationally well. Tough operations in transferring the patients to the advance hospital may deteriorate the user experience.

 

 

 

Clarifying questions: Are we making a strategy because of Covid Restrictions?

What is the Objective of this move?

Should we consider a strategy for Traveller’s engagement or Hosts , or Business overall.

 

What is the Product? - Airbnb provides a platform for hosts and travellers. Hosts can add their places on the App, and tourists can book these places. Hosts are charged Listing fees and Users who booked are charged booking fees and commission. 

Bookings may have decreased drastically due to Covid restrictions.

 

Problems: As the Primary User of the product is the Tourists , we need to consider their user Journey. Wants to go out? Covid Restrictions are placed. Uncertain about Covid Cases. Scared of travelling, going to unknown places? Uncertain about booking

 

Needs: In the current situation. Validity that the place to travel is safe.Covid Free. Workers and Hosting staff is Vaccinated. Covid Free. Health of Working staff. Cleaning and sanitization at the place. Easy Check In. No Contact check ins. Increase the Cost?,  Long Rentals, Quarantine facilities, Virtual Tours, and experiences. 

 

Prioritization : 

 

Conclusion : Covid Free & Safety validation , No Contact Check ins are two strategies which can increase / maintain Bookings in COVID restrictions. (Partial Restrictions)

If there is a complete Lockdown, Long Rentals and Quarantine Facilities are a better option.

 

 

Clarifying questions

1) Stragety can be centered around product, finance, marketing, operations, business model. I assume it is product.

2) I assume the strategy is to boost the revenue, number of nights stayed.

Generate solutions

Our aim is to provide the experience that allows for social distancing and offer full refund due to cancellation resulting from COVID related exigencies.

We can modify the site and add features to the site:

Promoted houses:

Bring visibility to safe houses: we can partner with the houses to offer the contactless check-in experience, hand sanitizer, and require the hosts to mask up all the time and also to get vaccinated.

In return, we can promote such places on the site. 

New features:

Add Covid Stats of the Neighorhood: we can highlight the neigborhood where the COVID cases are lower, vaccination rates are higher and hence safer for the customers.

Add the information about the COVID-safe restuarants in the neighorhood: we can suggest the places where the restuarants offer the no-contact delivery.

Provide information about the hospital services in the neighorhood: we can include the details on the hositals that are locate in the neighborhood, in cases customers need them.

Add information about the vaccination status of the host or recent COVID test results

Offer free cancellation and free alternation for COVID related sickness:

Adopt and communicate policies that offer the full refund when customers had to change the plans due to COVID related sickness.

Offer low cost health insurance for treating COVID cases

Discuss solutions and prioritization and conclude

I would prioritize promoting low-risk places because it give confidence to the customers that can travel

Next I woud prioritize offering free cancellation. Because customers can are less concerned about the certainites know that they can get a full refund if something goes wrong.

Lastly I would prioritize adding stats about the neighborhood. Because it is something that customers can learn about from the external sources like google whereas risk-status of the houses and stay-protection can be offered only by AirBNB.

 

 

Clarifying qn - 

1.How bad is the business right now?

Assuming answer --? Zero or minimal business.

Objective - it is very clear from the question that out objective is to develop a business strategy for Airbnb during pandemic.

Product description - Airbnb connects owners and guests. they provide multiple types of services 

a. Hotel bookings

b. Individual house rentals ( relatively longer time 1-2 week stays)

c. Party events ( 2-3 days)

Strategy thinking :- 

1.I would like to realize the fact that we are not competing against competitors, but the unusual situations.

2.Restrcited air travel and safety concerns are a threat to all 3 types of services provided by AirBnB.

Keeping above 2 points in mind, I will try to think few strategic options we can adopt.

1. Decrease operational cost --> problem at hand comes from uncontrollable factors. Hence we can categorize host places into high / medium / low spreading sections. Focus on decreasing operational cost at high spreading places. Also adopt to a dynamic cost model instead of full 24*7 maintenance model.

2. Introduce longer stay packages (along with WFH setting)-- Convince hosts. Adopt this strategy to places where there is less infection. This would enable guests to book places for longer duration - less air travel.

3. Exhaustive advertising of sanity followed at hotels/host places. -- This is commonly seen across industries during pandemic. Hence, might not have a huge impact. If infection rate is high, no matter how safe the hotel is, people still might not want to show up.

4. Use this time as an opportunity to renovate the infrastructure and facilities. -- Adopt this strategy to use set back time as an opportunity and come back with cool features & facilities after pandemic.

Evaluting strategies -

s.noImpactCost Tech cost

1	H	L	L
2	M	M	L
3	L	L	L
4	H	H	L

Conclusions-

Based on the impact, I would like to eliminate choice 3.

I think we have to go with a robust strategy to be ready for all outcomes after pandemic. Hence,

1, 4 --> High infection areas --> reduce ops cost and use the time to renovation.

2-->low/medium infection areas--> introduce new longer stay packages with WFH setting.

Summary - I would go with different strategies for different infection rate places. We should also consider the fact that the infection rate is dynamic - so, team should quickly adapt to the changes for better outcomes.

 

 

1. Is the strategy only for pandemic ? Yes, the key concern is for the pandemic period but if the strategy works for post-pandemic world it is welcome.
2. Are we focusing on a specific region ?No, we want to handle this globally
3. Are we focusing on specific part of business ? No, focus is on overall business

1. Commission  on bookings
2. Listing Costs of hosts
3. Cancellation Charges
4. Commission on Experiences

1. On-ground Workforce linked to listings like partnerships, verification etc
2. Technical Work-force to maintain platform/product
3. Rent/Cost of Physical Assets like office space, utilities etc

1. Should shut-down physical offices/end lease of physical assets wherever possible. Enable employees to WFH/remote. This should lead to some immediate cost savings.
2. On the product/platform side check if we can review contracts and negotiate for lower rates. As scale of things, would be much lesser, there might be a scope of cost reduction in terms of fees to external vendors of infra/tools/software.
3. This is a tricky situation, but Airbnb should also look at optimising the workforce and/or salaries. Due to WFH , employees expense might have gone down and Airbnb could possibly reduce salaries without impacting the savings of employees.
4. Try to re-negotiate commission with hosts for homes & experiences keeping them in confidence. Also since both consumer and host will be fearful of guests, the additional savings can be used to sanitise/cleans the place which will help warding of one of the threats.
5. Removing/Reducing cancellation charges. This one is tricky but lots of people may book and travel if they know the cancellation will not cost much. Since situation is changing day by day, people are not sure if they can plan much ahead because of cancellation charges.

1. In the countries under lock-down, governments are under pressure to open up fast.
2. Governments are also under pressure to not allow people from countries hard hit by Covid to travel to their own country.
3. Restrictions and regulations by various countries for travel which will keep on changing.

1. Lots of people have lost their livelihood and income. The impact is more on lower-to-middle income classes.
2. Higher income groups are somewhat less economically impacted.
3. As businesses open up, business travel will resume sooner.
4. Demand for sanitisation items like PPE kits, Masks, hand sanitizers has increased.

1. WFH and Remote Working will gain more popularity.
2. People will try to avoid congestion especially traveling via public transport. So 'experiences near home' might become preferable than long distance options
3. Air Travel will resume very slowly and would take years to normalize.
4. There would be lot of uncertainty around lock-downs, covid waves etc and people will not make plans too far in the future
5. Sanitisation, cleanliness would be top priority. There would be fear in mind of people. People may not like to travel & hosts may not like to open up their homes for 'others'
6. People might want to stay home and not travel at all for sometime.

1. Lot of businesses (which are not yet online) would move online to avoid travel and congestion.

Idea	Comment	Impact	Ease of Implementation	Size of Impact	Priority
Focus & improve features For Business Travel	Most of what is required already exists except the fact that sales/partnership team might be required to up-skill	New Segment of Users as well as Revenue	Medium	High	3
Local Experiences (excluding stays)	Double down on in-city experiences. AirBnb has most of this already in place and just need to reach out to their huge user base	Mainly revenue as well as get users who don't /can't travel outside the city	Easy	Medium	6
Luxury Travel	They can carve out their product or build appropriate flows in their product and strengthen their offering for Luxury Travellers (people who spend most)	Revenue	Easy	High	2
Long-Term Rentals and Workations	Since lots of offices would offer WFH and Remote Work, offer long-term rentals with appropriate working facilities and discounted rates	Revenue and new consumer segment	Easy	Medium	7
Provide Quarantine Homes for Travellers	Since lots of governments want travellers to Quarantine first, offering such home might open up a new market. Moreover, this can also be leveraged in future	Revenue and new consumer segment	Hard	Medium	9
Become a Booking Aggregator/Reservation Platform for SMBs	Lot of businesses (which are not yet online) would move online	Revenue and new consumer segment	Hard	High	10
Home-To-Home Experiences by doing Tie-ups with Cabs/Car-Rentals	Since people would not like to travel in public transport, Airbnb could tie-up with rental companies to provide home-to-home service to consumers and at the same time earn some revenue share from these companies for providing them with business.	Consumer's peace of mind and hence revenue	Medium	Medium	8
Virtual Content	While there is market for it, I believe there are lot of platforms catering to content for tourism. Airbnb won't be able to make an impact here at-least in short-term pandemic duration. Also the impact is just users on the website and some advertising opportunity.	Revenue	Medium	Low	12
Get into selling Covid related items like PPE kits, sanitizers etc		Revenue and additional business	Hard	Low	11
Modify their platform for easy and cheap cancellation/Postponement	Since there is lot of uncertainty around lock-downs, this would provide a lot of peace of mind to travellers and this might lead to more bookings.	Consumer's peace of mind and hence revenue	Easy	Medium	5
Sanatization as a Focus of their properties	Should implement sanitization processes and ensure strict vigil on hosts following the same. Also travellers could be asked for covid negative report and/or offer discount to such users. This is especially important for in-country travellers	Consumer's peace of mind and hence revenue	Easy	High	1
Get more inventory in areas where AirBnB has less presence	Since some people would like additional revenue streams and lost their primary jobs, they might want to open up their homes. So this could be used to increase supply and grow foot-prints in areas where AirBnB has less presence	Growth and more revenue	Medium	High	4

• it is a community where guests can book stays and experiences and hosts can rent their stays.

• There are 5 stake holders: hosts, guests, community, employees and shareholders. Airbnb has over 4million hosts around the world providing unique stay options and experiences to 800 million guests .

• Hosts share their unique stays and experience for a price. Guests select and use their offerings. The goal is to make experiences memorable for them. Airbnb gets a fee in each transaction. It can be accessed by website and app

• a community of 4 million hosts and 800 million guests
• excellent customer service: personalized support to host and guests available in 42 languages
• hosts inspire guests to become host- a virtuous cycle
• depth of experiences available
• focus on flexibility: flexible dates, flexible matching and flexible destinations
• easy hosting process
  • easy host on-boarding: a 10 step easy process
  • host today tab : host can easily manage booking and more
• strong technology innovations
  • deep learning models to arrange photos as per guest preferences
  • smart text suggestions for smart host titles

• travel stopped.
• trip cancellations increased drastically
• big drop in bookings
• focus on safety and hygiene
• guest preferences changed
  • shift from international to local and domestic travel
  • shift from hotels to small homes
  • shift to longer stay duration
  • shift from work-from-home to work-from-any-home

• searches for travel options
• opens airbnb website
• searches stay options or experiences
• selects one of them
• books the stay/ experience for desired date
• pays for the stay/experience
• contact host
• consume the stay/experience
• reviews host
• return

• lists its property/experience
• gets approval from airbnb
• gets fresh  booking
• approves booking
• sends welcome guide to guest
• makes the property ready
• guest use the property
• receives payment from airbnb
• reviews guest

 

	impact on the business	alignment with core capabilities	how risky it is?	priority
S1: support host community from large number of cancellations	H	H	L	1
S2: focus on local travel options	H	H	L	1
S3: introduction of online experiences	M	L	M	3
S4: guide to strict safety and hygiene protocol.	H	H	L	1
S5: introduction of ppe and sanitization kits for guests	H	M	L	2

 

Clarifying questions

• Is this during the pandemic or after the pandemic? During the pandemic.
• What is our objective here? Keep the lights on and prime us for post-pandemic boom.
• Assuming this is a global strategy we are after? Yes.
• Anything else that I should know about the status quo? No.

Setting the context

• Airbnb
  • Mission: Belong anywhere.
  • Marketplace of hosts and travelers - people let out their homes for short stays.
  • Airbnb makes its money from platform fees, cut of the rent, etc.
  • Experiences + Long term stays → new options.
• COVID-19
  • Travel down to 0.
  • Both hosts and travelers are unable to derive value from Airbnb.
  • Cash inflow has plummeted but outflow remains the same.
  • Whole of travel and tourism sector affected.

Assessing the good and bad

• Strengths and capabilities of Airbnb
  • Millions of rooms and accommodation spaces across the world.
  • Strong brand recall among travelers.
  • Seen as a good company.
• Weaknesses
  • Almost entirely built on travel - no diversification.
  • Network effects can spiral down if hosts and/or travelers leave platform.
• Opportunities
  • Whole of travel industry has taken a hit - competitors and potential acquisitons would become super cheap.
  • Remote work has uprooted everybody from their usual places - possibly many jobs in the future will be remote first.
  • Post pandemic travel is expected to grow explosively - Airbnb can capitalize on this.
• Threats
  • Hotels are seen as safer than Airbnbs - because of standardization.
  • People might be very wary of coming into contact with others.
  • People might not recollect Airbnb too much.
  • People (Airbnb community or others) might not take vaccines.

What should Airbnb's priorities be?

• Survive the pandemic
• Retain hosts and help them
• Engage customers and stay on top of mind

How can Airbnb do that?

• Utilize the empty rooms and homes to host frontline workers and as COVID quarantine spaces - in partnership with hospitals and governments - for a modest fee.
• Partner with local governments to organize vaccination drives for communities at large.
• Utilize low costs to acquire competitors such as Couchsurfing or adjacencies like Booking or even entire hotel chains.
• Convert Airbnb stays → Airbnb living and give Living as a Subscription product for users.
• Crowdfund relief for Airbnb hosts from Airbnb customers in exchange for future discounts and offers.
• Launch new modes of stays like caravans that tie back to a remote-first world.
• Build VR, video, audio content about travel that people can consume and draw inspirations from, as they plan a post pandemic trip.
• Launch Airbnb Hygiene - a new product that focuses on improving the perception of safety on Airbnb properties.

 

 

AirBnB basically provides Homestay services for tourists in different cities across the globe

Product vision : Provide a comfortable and homely stay for travellers

Covid-19 pandemic has impacted Travel and Hospitality sector the most due to Lockdowns imposed by Govts to contain the pandemic.

Users fear that Hotels, restaurants can act as a strong source for Covid infection which has been proven true in certain scenarios where there was no proper hygience practices being followed

This has impacted revenues of Hotels, Homestays etc.

Product Strategy should be derived from business and product goals and should be revisited when such external factors disrupt the industry

Target Users of AirBnB

Travellers : People who book Homestay as part of their tour. These people fear from being getting infected at such places

Caretakers - People who provide their houses as Homestays. These people fear that Tourists can bring Covid-19 infection from outside and spread it

User Needs and Pain-points:

a.  Homes should be properly sanitized every day
b.  Nutritious diet to build immunity
c.  Hotels should be rated as Covid-Safe based on global sanitization protocols
d.  Availability of Medicines and Emergency services like Ambulance
e. Option to insure Homestay - all medical charges should be reimbursed

Solution to address:
a.  Cartakers can be given option to opt for AirBnB Sanitization for some fee, where staff will come and sanitize the house after each stay - High impact, High cost
b. Users can opt for Nutritious diet option during checkout which will be chargeable , they will be provided with Ready to Eat Dishes which are high on protein and vitamins - High impact, Low effort
c. AirBnB can review the sanitization practices being followed by the Caretaker and provide rating on the Website or App - High Impact, Low effort
d. Caretakers can opt for Medicines and Emergency services, these homestays will be offered at premium pricing to Travellers - High Impact, High effort
e. Tie-up with Insurance providers to insure Homestay, Users will have to pay one-time insurance premium during Checkout- Medium Impact, High cost

Based on above prioritization lets focus on Traveller Persona and Covid-Safe Rating feature

User Journey for Travellers-

Launch Website - > Search Location - > View List of Hotels - > Option to filter by Covid-Safe Rating

User Journey for Caretakers-

Launch Website - > View Homepage -> Apply for Covid-Safe Rating -> Pay inspection charge -> 3rd party vendor will inspect the Homestay -> Provide Feedback to AirBnB -> Rating will be updated based on Feedback provided

Feature Launch-

AirBnB can do a soft launch for this feature in a particular region lets assume Goa and review the key KPIs

Feature can be marketed through Advertisements on YouTube, Facebook, Instagram and Linkedin, Electronic Media and Email Marketing

Metrics to Track

Increase in No of Visits, Increase in Conversion Rates, DAU, MAU, ARPU

Clarify

Should I assume we're determining this strategy at the start of the pandemic? (Yes)

Is there a particular vertical of Airbnb to focus on or should I assume the broad company strategy? (All company)

Mission and Product

Airbnb mission is to make everyone feel like they are home and belong. Airbnb offers ways for customers to book short-term stays and for hosts to earn income on different properties. Airbnb also offers experiences, which is basically activities.

COVID Impact

Now let's talk about COVID and its impact to Airbnb with the following considerations of customers, the market, profit, company capabilities, and the environment.

Customers

• Travelers and customers who have booked experiences can no longer due to restrictions and safety. They are disappointed and likely want to rebook when it is safe and be refunded in the meantime as many people were negatively financially impacted.
• Hosts were counting on the income for future travel. They are worried about refunds and the underutilized space they now have, some solely used only for Airbnb.
• While travelers plans are disrupted, hosts rely on us, so our primary goal should be on supporting our hosts in this tough time. Our hosts are what make our mission of belonging a reality and are a key differentiator from other platforms.
• How to respond
  • Support our customers by refunding their cancelled travel plans and giving them confidence in future travel through lenient cancellation policies
  • Support hosts by paying some of their lost income and suggesting safe alternatives, including cleaning policies and cancellation policies

Market

• Because this is a global pandemic, our competitors (in terms of booking platforms) are in a similar situation. 
• However, virtual conferencing and activites have boomed as stay-at-home orders are in place.
• How to respond
  • Encourage hosts to create more virtual experiences. Make this the primary offering on site.

Profit

• For the near future, we forecast extremely limited revenue. Do we have enough runway to survive? We don't know when this will end
• How to respond: Cut costs where we can with different 3rd party contracts, raising capital, or evaluating personnel

Company

• Our advantage is that we have an advanced booking system and a rockstar engineering team. 
• Disadvantage is that our whole brand is built on meeting new people, visiting new places which are at odds with what people should be doing
• How to respond: Build new user experiences around education how to safely travel/use Airbnb offerings

Environment

• The situation is changing rapidly across every market, including guidelines and restrictions.
• How to respond:  In order to have the right information, we should set up a company task force to stay on top of the latest news in our top markets and update our site with the guidelines or ways to access most up-to-date information.

 

Airbnb’s strategy during Covid-19 Pandemic

Clarifying Questions

1. What is the strategy aimed at – increasing clients/revenue, lowering cost, etc?

For now, I will assume the strategy is not clear.

First, I will start by looking at the new problems that customers have during the pandemic and compare what has changed. To list a few,

1.       Want the cheapest accommodations/experiences due to reduced incomes for most.

2.       Want hosts that maintain sanitation and hygiene as per covid standards.

3.       Guarantee of hosts not being previously exposed – this goes for hosts and guests.

4.       Want an experience where there is less exposure and I feel safe.

5.       Want to know which places are safe for tourism – no travel restriction and where people are following all regulations.

It is clear that customers would still look for cheaper/affordable experiences. The major change during pandemic is the fear of going and staying at an unknown place. There is no guarantee of lesser exposure and not getting infected.

Goal during pandemic – Increase the trust of customers, both hosts and guests, on the platform.
Airbnb’s strategy should include the following

1.       Position itself as low-cost platform taking all measures to provide a covid-free experience.

2.       Market itself taking all the covid-19 precautions with hosts and guests.

Mapping problems to solutions

New problems	Solution to new problems	Impact/Priority
Want hosts that maintain sanitation and hygiene as per covid standards	1. Airbnb can set sanitation standards for hosts to be able to register on their platform.	High
Guarantee of hosts not being previously exposed – this goes for hosts and guests	1. Airbnb can post covid-19 precautions/requirements on its website and request hosts and guests to follow them. 2. Ask both hosts and guests to fill forms and latest medical documents certifying good health. 3. Get feedback from both hosts and guests. 4. Show recommendations to guests of hosts that have maintained protocol – rating system adding sanitation and cleanliness as an option	High
Want to know which places are safe for tourism – where people are following all regulations	1. Airbnb can tie-up with the government and provide latest updates to guests, thus also recommending safe places to guests.	Medium

I will start with the high priority items and move on to the lower priority ones. This will align with the strategy and ensure that both hosts and guests trust Airbnb to deliver and covid-free experience.

 

 

 

Clarification Questions

1. Airbnb - provides a place for travelers to stay when they go to a new place, provides experience
2. Are we looking at a short term strategy or a long term strategy - since there are a number of unknowns - both
3. Which geographies are we looking to focus on - US

Business Understanding

Company - Airbnb's vision is to provide places for travelers to stay when they go to a new place - they main tagline being to experience the places as a local. To enable this vision, Airbnb has multiple businesses -

• Find a place to stay
• Local experiences that the company is providing for the end customer

Stakeholders - The company has multiple stakeholders:

1. Employees - Most important
2. Travelers or Tourists - Most important
3. Hosts who provide the places to them - Most important
4. Other folks who provide services to enable the ecosystem to work properly
   1. Providers of cleaning services
   2. Providers of photographing services to enable listings etc.
5. Experience providers who arrange for activities locally

Impact of COVID on the business: Global travel has stopped, affecting both the businesses, and bringing the revenue down to zero. At the same time, the company is also bleeding money because there are fixed costs expenses such as employee cost and other folks we have on retainers.

Impact on the stakeholders:

1. Employees now have to work remotely and all the community managers who need to manage listings in their locations effectively have no work to do
2. Tourists have the urge to travel but aren't sure where they can go and how safe the travel is. People who want to do global travel can't do it anymore.
3. Hosts are left without any income from renting their space. For some folks this could be their only source of income.
4. Similar is the case with other providers of other services also

Objectives:

1. Find a way to conserve cash as much as possible
2. Find alternate ways to generate revenue for the business

SWOT Analysis

Strengths

1. Team of Engineers and PMs who can build new tech quickly
2. A platform that people find alternate accommodations, not just for tourists but for anyone
3. Relationships with activity providers across the United States
4. A trusted brand that provides great service to existing customers

Weaknesses

1. Airbnb does not own any of the assets that are listed on the platform unlike the competitors like Hotel Chains
2. Since it is the local experience that an Airbnb delivers, there is not a lot of control on how a places are set up

Opportunities

1. Remote work trend has increased, and this has resulted in an ability for people to work from anywhere
2. Social experiences with friends have come to zero but people are craving for experiences
3. Employee Engagement in companies has come down significantly since folks can't meet in person anymore
4. Cases of COVID have caused a panic for users and hospital beds are usually full
5. More people are ordering
   1. Perishables
   2. Non-perishable items online
   3. Engaging alternate ways to send important stuff
6. More need for safe spaces

Threats

1. Hosts might lose their mortgage and stop their listings indefinitely
2. Airbnb's reputation might erode and go into oblivion because of this

Strategy

Use strengths to leverage opportunities and attack weaknesses while mitigating risks

1. Enable travelers or folks stuck at home to find a place where they can shelter safely during the pandemic - like a workation to build revenue and provide income to out of work hosts
2. Work with activity providers to enable virtual experiences to provide tourists and corporate teams with engaging virtual experiences
3. Leverage existing spaces as cheap storage spaces for people looking to move from one city to another
4. Work with the government to convert some of these isolated spaces into healthcare centers (like the makeshift hospitals in China)

 

 

AIR BNB Strategy- Post Corona Pandemic

Today I want to focus on AIR BNB the Company that disrupted the Hotel Industry and is now fighting for its survival due to travel restrictions

I am writing this article to suggest some of the ways by which company can bounce back and remain in business in the future

 AIR BNB is a company that connects guests and hosts, The advantage AIRBNB has is that it has a huge community of Host and Guest,

We all agree that not everyone will go out of their homes in current times, However, essential services have to keep on working and to fulfill that Essential service worker such as Doctors, Policemen, Grocery stores, medicines, Electricians, Transporters and many more has to go out

And In coming days those businesses which are not online they have no other option but to go out

Keeping in mind above situation, I think it is wise to focus on the needs of Essential service workers and their immediate family members

I believe the customer group which AIR BNB focus on can be an Essential service worker

Customer Journey with Air BNB  can be divided into 2 Phases

Phase 1 Online Booking Experience

a.       Customer comes to platform either directly or through search

b.      Select location

c.       Read online reviews

d.      Select Property

e.      Choose the date of arrival

f.        Choose the date of departure

g.       Mention any special preference if any

h.      Select the number of days

i.         Make payment

j.        Get notified over email, WhatsApp 

Pain points of Customers in this phase

1.        Customer want to stay in localities and properties that are least affected by corona  

2.        Customer Want to be sure that property is sanitized before he/she check-in

3.        Customer Need property for Longer duration and at cheap price

4.        Customer Worry about  their children and elderly parents when they are out doing duty in pandemic

Phase 2 of Journey Experience at location

a.        Customer Check in on the desired date

b.      Use the property for services  such as cooking, sleeping, washing clothes

c.       Check out on an intended date

d.      Share feedback on social media platforms

Pain points of Customers in Phase2

1.       Must have  proper safety measures for corona

2.       Customer need at least basic corona protection kit

3.       Touchless interaction at the entry gate and other commonly used locations

Some of the possible solutions that AIR BNB can implement  

1.       Promote longer duration stays at a cheaper price

2.       Rework on Search algorithm to display properties based on the number of corona cases in a locality

3.       Providing Virtual experience of property on Platform

4.       Displaying  a feature on a website that displays information related to the sanitization status of check-in property

5.       Adding a feature to buy PPT kits  from the platform

6.       Adding  monetization feature for a host on the platform

7.        Add feature to  request for providing facemasks, sanitizers  at property

8.        Feature to Provide accommodation and daycare to take care of children of essential workers

9.       Providing accommodation to elderly parents of essential service workers

Prioritization of Features can be done based on analysis of

User benefit, Business benefit and Cost to Build

Using a point-based system starting from  1 to 5 with 5 being highest

Priority Formula for Building feature = User benefit Score + Business Benefit Score – Cost to Build Score

 

 

Feature	User benefit Score	Business benefit Score	Cost to Build Score	Priority = User benefit +Business Benefit- Cost to Build
Promote longer duration stays at cheaper price	4	4	2	6
Rework on search algorithm	5	4	2	7
Providing Virtual experience of property on Platform	5	5	3	7
Sanitization status of property	5	4	3	6
Buy PPT Feature	5	5	2	8
Adding other monetization feature for host	3	4	4	3
Feature for children	5	5	4	6
Feature for elderly parents	4	4	4	4

 

Based on above Table below features can be build to revive

1.        Feature to Buy PPT  feature

2.        Reworking  on search algorithm

3.       Virtual experience of Property on platform

Parameters for Success

For PPT Feature Success criteria: Total Number of People who Bought PPT feature / Total Number of People who clicked on PPT feature

Search Algorithm:  Monthly search queries post-implementation of feature, Number of clicks on search results/ total number of search queries

Virtual experience: Ratio of the total number of people who clicked and watched/ Total number of people visited platform, Impact on Number of Booking post-launch of feature 

Since these are major changes, I would plan  roll out using A/B testing and would use Cohorts, I will release this feature in metros and with early innovators, based on the results obtained, will either continue or Pivot  

 

 

 

 

Problem statement 

What should be AirBnB strategy during Covid 19 pandemic?

Clarifying Questions

What is the most critical thing for AirBnB now?

Assume # Keeping its user base intact and generate revenue to keep company afloat?

Feature in AirBnB site

AirBnB memoirs

This feature should allow AirBnB customers (people who booked stay in one of AirBnB houses) and its vendors (house owners who listed their house on AirBnB) to post a short video with small description describing how they enjoyed their previous stay

We can have 3 options for each post

# Like, Share, Number of views

Restrictions on who can post #

Only users with Valid AirBnB login credentials or With atleast one booking on its site

What benefit does AirBnB get

1) Forecasting the destinations that are most loved by its customers 

Assume # The  ones with most likes, would be first spots people opt to go after Covid settles 

2) AirBnB can use its cash reserves (if present or raise some funding) to ensure the house owners in such destinations are not broke due to Covid and part away from AirBnB (Selling their properties or Dissatisfied with AirBnB for not helping them out when they most needed)

Monetization

Advertisements 

Implement Effort 

Small to Medium

Metrics

1. No. Of posts published on daily basis

2. Daily Active Visitors of this page in AirBnB site

 

1. Look into user needs:

why do people travel?

they want novelty, new experiences, getting out of their routines, a place to stay for work (less so now cuz Covid), and learn about the world outside of their surroundings.

2. Look into Airbnb's existing resources

they have international hosts and guests who enjoy traveling.

3. Consider restrictions

International travel is limited, yet there are opportunities for local exploration for local tourists or virtual experiences. When the pandemic will end is unknown and out of our control.

4. Create 2 core verticles Airbnb can dive into **targeting the local market** or **targeting the virtual market**

5. Choose **the virtual market** because we can sustain it after Covid and it's an existing branch that Airbnb is working on already.

Key Metrics:**number of nights booked** -->  **number of experiences booked**

Clarify: Are we talking about Airbnb’s strategy across its all locations or specific to some country.

Challenge: Due to communicable coronavirus disease across the globe, people are hesitant to travel and are avoiding unnecessary travel.  The tourism sector is baldy hit. 

Strategy:

1. First and foremost thing is to assure them the safety of their customers , ensuring   them that their personal hygiene would be taken care of with utmost sincerity. And to make them believe or trust Airbnb -they have to start with frequent communication. In the past also the companies which communicated well with the customers in times of crisis succeeded well. 

Communication strategy:

• Regular communication

• Use of social media - For example people who recently travelled could be asked to share their experience on instagram with regards to personal hygiene at AIRBNB

 

2. Come up with strict guidelines to be followed whoever wants to rent be it hotel, house, or farm house anything- Guidelines should include

• Beforehand sanitisation of rooms 

• Daily update of health of employees and staff- which could be shared with customers

• Availability of sanitisers , body temperature check instruments, 

          Apart from this Airbnb can take initiatives to help them -

• By leveraging the use of AI cameras which ensures social distancing in workplace- already many companies are doing so- Airbnb can charge a fee to the hotel to use this facility

3. Diversify: Since it is very likely that for coming at least 8-12 months - necessary travel would be seen which will mainly be about corporate . Hence they can come up with the corporate travel category.

 

Clarify
Couple clarifying questions: 

• Are we talking about any specific parts for the strategy like pricing or safety? 
  • (Assuming the interviewer tells me to define this)
• Are we talking about p2p renting, or also experiences?
  • (Again, assuming the interview tells me to define this)

1. Home hosts
   1. Safely  share their homes to get as much income as possible, with the flexibility of choosing who/ when enters their home.
2. Home renters
   1. Safely get a nice place to rent
      1. Cost
      2. Location
      3. Size
3. Experience hosts
   1. Safely share their experiences to get as much income as possible
4. Experience consumers
   1. Safely experience cool things, especially in new areas they visit.

1. Importance to AirBnb
   1. Home renters/ hosts (Significant % of revenue)
   2. Experience consumers/ hots (Non significant % of revenue)
       
2. Weakest Demand (As a marketplace, they constantly have to make sure there are enough demand of both sides, and if one side falls sgnificantly short, it should become the focus area to fix). I want to call out that I expect all of the 4 options to have dropped, but I'm going to rank from most significant 
   1. Home renters (using hotels as a proxy that are struggling right now)
   2. Experience consumers
   3. Experience hosts 
   4. Home hosts

1. Start looking for homes in a location
2. Find the right home
3. Book the home
4. Check in to the home
5. Enjoy visit
6. Check out of the home

1. Helping people find a better place to be stuck in quarantine in
   1. Better vibes, bigger size, more amenities, better lighting, etc.
2. Helping people find a safer location than where they currently are (less Covid cases)
   1. Less cases, similar "home" feel, maybe match similar cities in terms of urban vs. rural, city density, weather, etc.
3. Helping people social distance themselves more by separating into different places than their current roomates
   1. Convincing people who currently quarantine with many people to quarantine with less people for further social distancing

• Occupancy rate for hosts (most important)
  • This shows the supply/demand curve
• # of renters
• # of hosts
• average length of stay
• average price per listing

AirBnB is a marketplace company which provides lodging and homestay experience to travellers.

The suppliers are the home owners and the consumers are the travellers.

On the basis of house listing, suppliers can be broadly divided into two categories :

1. One who list a part of their house and share the house with travellers

2. Others who list their complete house on the platform

 

Due to the COVID-19 pandemic, the travel industry has been hit hard because nobody is travelling due to the lockdown measures taken by the government. Hence, the properties listed on AirBnB are completely unoccupied.

But to keep the country running and preventing the economy to slump down, goverments have allowed the factories producing essential goods to run on the terms that factory owners should be provided with lodging facilities. Hence, the factory workers are not allowed back to go back to their homes.

In this situation, AirBnB can tie-up with factory owners to provide accommodation at low cost for their workers in the fully listed buildings on its platform keeping in mind the safety measures and regulations laid out by the government.

This strategy will help AirBnB to generate revenue in this pandemic situation.