After reviewing some Airbnb properties and staying in one recently, it became evident that an Airbnb loyalty program is needed, not just for guests, but for their hosts as well.
It’s Needed To Compete
Airbnb has to capture more marketshare to grow and to compete in a difficult market for guest nights. For leisure stays, consumers are able to choose individual homes close to anywhere they want to be, not only if there is a hotel conveniently located nearby. The market is dynamically-priced, Airbnb hosts can offer every size and style of accommodation possible without the limitations of a hotel where all of the rooms are in one place with standardized room types.
Yet with all of those advantages, Airbnb still loses to traditional hotels for some of the following reasons:
- Limited Amenities
- Checkin/Checkout Hassles
- Inconsistency of Deliverables
- No Advantages for Loyal Customers
Hotel Affiliations Are Not Meaningful
Hyatt, Marriott, and others have announced adding vacation home rentals to their offering. Does it matter that the CEO of Marriott who has never stayed in an Airbnb but believes he can compete against their offering? Not if his daughter has anything to say about it:
Mr. Sorenson, Marriott’s chief executive, said he had never used Airbnb to book lodging, but his daughter has. She told him he had nothing to worry about.
The real problem is not disillusioned CEOs that know nothing about the business in which they are both partnering and competing against. I think they could actually make that work if implemented correctly, but alas, it has not been implemented in a meaningful way.
Hyatt goes through the trouble of making an agreement with Oasis which offers home rentals in places where the chain doesn’t currently offer hotels and has no plans to do so. When searching for a large market where Hyatt has a void, like Spain. (Hyatt only recently added two properties in the entire country, the Park Hyatt Mallorca and the newly opened Hyatt Centric Gran Via Madrid)
If Hyatt doesn’t want to advertise Oasis properties side-by-side with their own, I think that’s fair enough, a logical business conclusion. But if I have World of Hyatt points or want to spend money and choose to look at Hyatt first, why not list those properties on the Hyatt website?
Lack of implementation is what makes the hotel partnerships meaningless.
What I Want As A Guest
It’s not the recognition that I seek, it’s the benefits. With a wide variety of homes and varied amenities, how do I achieve a consistent experience on par with what I am getting when staying in hotel chains? Outside of the chains, why not use Hotels.com for their 10% back program?
The benefits are what call loyal guests back to a given platform. Does it come in the form of points or rebates? Sure, but there are others items too. Here is what I want to see as a frequent guest from an Airbnb loyalty program:
- Cashback or points – If I stay as much with Airbnb for leisure as I do right now with the chains I should be incentivized for my spend. If I start using Airbnb for business stays, it could cross 200 nights a year in aggregate. The hotels give me a lot back for that business and Airbnb would need to have a program commensurate with hotel programs.
- Status levels – If I stay 60 nights every year in a single hotel chain I have top-tier status (Hyatt, Hilton, reasonable status with SPG) that give me extra cancellation options, more availability, cheaper rates, breakfast, cocktails, upgrades, wifi, the list goes on. If I move some or all of my business to Airbnb properties some of this is already included and others really aren’t possible (free breakfast). Could Airbnb partner with WholeFoods to offer a breakfast pack delivered to the host (via Amazon Prime) prior to the guest’s arrival to be left in the fridge? Perhaps it would include stocking certain snack items the guest prefers.
- Partnerships – If I stay at Hiltons I can still earn American miles if I would like. I can exchange my American miles for Hilton points as well. I would like to be able to see the point currency flexible across partnered brands.
- Consistent deliverables – With every property unique and separate from the next, how do you deliver a consistent experience for the guest? Standardized deliverables. Example deliverables that would qualify a property for eligibility in the frequent guest program might be: Wifi available in the property for free with a minimum of 20Mbps speed. Properties must provide shampoo, conditioner, and soap to guests. Flexible checkin and out times. TVs must have an ability to run Netflix, etc. Properties outside of the standardized requirements wouldn’t be eligible to participate in the loyalty program.
There are some really unique ways to implement the above options. I prefer to see points rather than cashback because its opacity allows for gamification. Status levels are needed, and I think elite guests should have priority for wait lists, have access to status-only properties in key markets. Airbnb should waive a portion of the booking fee for their most frequent guests who make the program worthwhile.
An affinity credit card would also make a lot of sense. If I can redeem my daily credit card spend for world-class home rentals, I might prefer that over my current options. It’s the most unique, most dynamic accommodation you can book as a guest.
Airbnb would need to ensure that their best guests are getting taken care of by centrally handling the perks and benefits sent out to property managers and landlords of the properties that are hosting elite guests. It can’t be left up to the host as some may go further than needed (making it harder on other hosts to satisfy the guest) while other hosts may not understand why it’s important to reward these guests specifically and fail to put in much effort.
Airbnb has the ability to allow guests the use of their points for unique activities in a way that SPG, Hilton, and others are trying to replicate but can’t. For some, spending a million SPG points to throw out a ceremonial first pitch in Game 7 of the world series was worth it; to each their own. However, for Airbnb guests, their new Experiences section is really very attractive. Learn to cook from local chefs in your rented home, take a bike ride, go through a ghost tour in New Orleans – that’s not something Hilton is going to invest in and I don’t blame them.
That’s a real opportunity to differentiate for Airbnb.
The Program Must Incentivize Guests and Hosts
Incentivizing guests is only half the equation. What “gig economy” businesses like Lyft, Uber, and Airbnb have learned is that they play to two markets. Customers will not use Lyft if they have to wait for a car for 20 minutes. If Uber’s cut is too large, they lose drivers. Fewer drivers mean longer waits and open the door to the competition. Airbnb has the same dilemma. They must add as many properties as possible but a guest loyalty program, especially if there is additional work, could push some of those owners away and onto alternative services.
The program should incentivize hosts in a way that makes them want to solicit elite guests specifically.
- Lower Airbnb commission rate. As a result, hosts make more money when they accommodate members of the program.
- Free perks distributed from corporate that makes the guest happier and costs the host nothing.
- Higher placement for host listings if they have a good track record with their elite guests.
- Guests must feel like their business is valued and hosts must have a reason to want to host frequent guests specifically.
What do you think? Did I miss the mark? Will they roll out a program? What do you want to see (as a guest or a host) in an Airbnb loyalty program?