Wednesday, 16 April 2014

How co-creation is defining a new direction for Airbnb

If you’re not familiar with Airbnb, then to put it simply, you’re not travelling the right way.

Sure, we could all simply check into a hotel when we get to a foreign city, but in many ways this distances us from the sense of place and marginalises us to the category of a tourist. In the search for something more authentic, an experience with purpose, Airbnb connects property owners with short term renters through an online collaborative consumption marketplace. The result is the potential for a traveller, or guests as they are known to Airbnb, to stay in 34,000 cities around the world in accommodation ranging from soho lofts, to igloos; houses to lake side log cabins. The value for owners, which they refer to as hosts, is that they can unlock value in their idle assets and contribute to a global community movement.

An example of one of the many destinations available through the Airbnb marketplace -

So how do you grow an online marketplace with a customer centric approach when many of the touch points for the consumer are beyond your control? Airbnb continues to increase their interactions with hosts and guests by co-creating new tools and systems which allow greater trust between stakeholders, captures more value through augmented product features and enhances the unique experience while working to increasing consistency.

By building a Hospitality Innovation Lab in Dublin to train hosts and observe guests, Airbnb has been able to capture their interactions, developing new features in direct response such as instant bookings and friction reducing moments for exchanging keys. This process of co-creation increases the value of the experience for each of the engaging actors as well as the brand of Airbnb.

In augmenting the core product of a lodging marketplace, Airbnb storyboarded the entire experience for a typical traveller to identify new customer touch points, which could be captured in the move to reposition the company as a hospitality provider. From this, new ideas such as airport transfers, dry cleaning services and restaurant recommendations have been identified with the potential to integrate with the Airbnb marketplace to augment their offering.

Finally, Airbnb’s value proposition of a unique travel experience has been let down in the past by the inconsistent and even negative experiences of a minority of its guests. To increase consistency while maintaining uniqueness, they will soon be offering cleaning services to their hosts, including the provision of towels and linen. Additionally, a graded system of hosts will help increase quality and manage guest expectations. These paid services help guests select premium services, hosts to differentiate themselves through increased quality, and Airbnb a revenue generating augmented product feature.

In short, these customer centric features are bringing Airbnb more inline with the expectation of a traditional traveller, while staying true to the value proposition of unique holiday locations with which it differentiated itself and disrupted the industry.

The Airbnb headquarters reflect the diversity of experience offered by their hosts to guests.

The search for a new meaning for Airbnb beyond the online platform has led them toward becoming an integrated hospitality provider, seeking to co-create new value for their guests and hosts through a more rigorous understanding of the customer value chain.

As they enter this new era, it’s clear the innovation that created this disruptive platform is far from petering out.

Duncan Alexander Bell
Current student in the Master of Marketing program at the University of Sydney Business School

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