What is the success metric for Airbnb's booking experience?

First off, let's just establish a common understanding of what AirBnb is, why users' use it, and what the booking experience encapsulates. Airbnb is a platform for booking places to stay when traveling, most often for the short term, as an alternative to hotels. These places are offered by Hosts and are often properties they use themselves and may often be their very own home. Travelers book via Airbnb instead of a hotel for a variety of reasons but some include trying to get a better price or a more unique experience, like a folksy cottage.

For the sake of this question let's consider the booking experience as everything from finding a stay to successfully booking it.

Before we dive into the nitty gritty, let's first take a step back and make sure we understand the context surrounding the bigger picture. Airbnb's mission statement is to create a world where anyone can belong through their offering of a end-to-end travel platform. The booking experience helps facilitate this mission statement by facilitating access to different areas of the world where travelers can go and belong.

Users

The primary user of the booking experience is obviously going to be the traveler, but we need to call out that the booking experience is critical for the Hosts as well. They want to ensure that users are able to properly find their property, understand what they are getting, and book it.

User Journey

Travelers:

1. Figure out where I want to travel to

2. Search for different housing options

3. Narrow down results by various criteria/filters

4. Read descriptions and view photos of various properties

5. Select Dates & Pay

6. Receive confirmation / check in instructions from Host

Hosts:

1. Create listing of property with description and photos

2. Monitor listing for activity

3. Answer questions and inquiries from prospective travelers

4. Receive payment

5. Send check in / out instructions to travelers

4. View Feedback and Traveler Ratings

Metrics

At it's core AirBnb is a two sided marketplace, we need a sufficient number of both travelers and hosts for both to have a good experience. In order to ensure we maintain equilibrium between the two I suggest we measure and monitor:

# of travelers who have made at least 1 search in the past week
# of property listings with available dates

Now that we've established we have enough users on both sides of the equation, we should measure and monitor how effective we are at facilitating the actual booking of properties. We've established there is a need / market, are we able to effectively solve the problems that these users have?

# of user searches
Average # of bookings per month
Average feedback ratings

Airbnb is a mature product and while we are focused on solving problems for our users, we still need to generate revenue. There is often a discrepancy between what users want and what users are willing to pay for. We want to make sure our product is in the latter category. In order to measure our ability to monetize I would measure the following:

Average booking price (daily price * # of days)
Total # of bookings per month
Average platform fee (our cut)

Downsides

While I'm confident in the ability of our chosen set of metrics to monitor the success of Airbnb, no set of metrics is perfect so I think it's worth spending some time discussing or calling out any potenial downsides or gaps.

All of our metrics are intentionally very high level, which doesn't give us much insight into specific user groups. For example, we could do a very poor job of catering to the needs of travelers looking for long term needs and our above metrics wouldn't alert us to this if we don't drill down further.
We're looking at the supply and demand on the platform in an aggregate form where as in reality it needs to be examined on a per location basis. It doesn't matter if we have a bunch of listings available in Hawaii if everyone is looking to travel to New York city.
# of user search and average # of bookings is going to grow and decrease with the total number of users on the platform. We're using it as an indicator of the booking experience's effectiveness, but if the total number of users on our platform grows that number is going to go up even if we make changes to the UX that makes it harder to find and book a listing.

Summary

In order to measure the success of the Airbnb booking experience, which encapsulates every from discovery to stay, we've brainstormed a variety of metrics listed above. These metrics focus on monitoring our ability to address the following questions:

Is there a market for our service, and are we able to attract enough participants on both sides of the equation, travelers and hosts, to our platform?
Are we able to effictively help these travelers and hosts find each other?
Do we provide enough value to our users to generate money for ourselves?

Shravan Shankar · Answer 2 · 2021-12-01T23:05:09+0000

Structure:
Clarifying Questions
Users and User Journey
Metrics
North Star Metrics
Supplementary Metrics
Metrics to watch out for

Clarifying Questions:
What does booking experience mean? - Think of it end to end - Right from Booking a reservation until the end.
Are we trying to focus on a particular booking experience - Stay vs nearby activities or classes? - You Choose
Im narrowing the scope by looking at only booking experience for stay. - That's fine
Are we looking at it Web vs App? - These are semantics - does not matter.
Are we interested in the US or WW? - Think US for now.
Any constraints to be known? - No

Users:
Supply Side - Hosts
Demand Side - Renters/Guests
Power users
Moderate users
Rare Users

User Journey:
1. Open AirBnB app
2. Enter details about destination and dates for booking (among other filters)
3. Select booking and pay
4. Await confirmation and response from Host
5. Communicate with Host for calrifications and other aspects of booking
6. Stay at reservation
7. Review and rate before rebooking next stay.

Metrics:
As we think through the metrics, we can classify them into various groups:
Supply Side Metrics
Demand Side Metrics
Business Metrics

Supply Side:
Number of hosts putting up their inventory on the platform
Number of new sign-ups and host additions
Number of rentals per host
Average booking duration (by week/month/year) - Average Occupancy Rate
Average time between bookings per property
Average time to respond to booking requests
Number of requests cancelled as a % of booking requests
Average host ratings

Demand Side:
Total number of new customers (over time/region etc)
Total number of bookings per customer
Total number of cancellations
Average duration between booking and cancellations
Average stay duration per booking
Average Time between bookings

Business Metrics:
Number of App downloads
App/Site availability and reliability
ARPU - Average Revenue per User (host and guest)
Total number of bookings (by day/ week/month/region/ etc.)
Total number of cancellations as a % of booking
Average ratings
Total number of Acquisitions (host and guest)
Total number of repeat customers (Guest - repeat bookings)
Total number of churned customers (hosts and guests - 30/60/90/180 days etc)
Total number of customer complains/incidents reported (hosts and guests)
Total compensation paid out to Guests/Hosts based on incidents.

From these set of metrics, here are some that I would highlight for booking experiences.

North Star metrics:
Total number of bookings (by day/ week/month/region/ etc.)
Total number of cancellations as a % of booking.

Supplementary metrics I would focus on:
Total number of repeat customers (Guest - repeat bookings)
Total number of churned customers (hosts and guests - 30/60/90/180 days etc)

Metrics I would watch out for:
Total number of customer complains/incidents reported (hosts and guests)
Total compensation paid out to Guests/Hosts based on incidents.