Last week, Airbnb made an important move to help the company step up in the competition against hotel chains and online travel agents — the debut of two branded products. I expect Airbnb's new branding strategy will change the competition landscape in the market even though I was not surprised at this news at all, as suggested in last month's discussion.
The debut of two new brands
As a milestone of Airbnb's 10th anniversary, the company is introducing two new brands — Airbnb Plus and Beyond by Airbnb. According to The New York Times, the company is debuting the Airbnb Plus brand with more than 2,000 homes in 13 cities around the globe, with an expectation of having more than 75,000 homes in 50-plus locations under this brand by the end of this year.
Airbnb Plus
To be qualified as an Airbnb Plus home, a property must meet the 100-point quality checklist set by Airbnb. Some important features of this brand include:
- Hosts with a 4.8-plus rating (out of 5), who know how to create a perfect stay for travelers
- Lockbox, keypad or a host being on call, which is critical in providing easy check-ins
- Thoughtfully arranged furniture, with hangers and drawers
- Adequate towels and fluffy pillows
- Filtered or bottle water
- Cooking equipment and utensils, including oil and servingware
- Iron and hairdryer
- Well-kept facilities
- A clean and neat house/room
- Functional locks on all bedroom doors if there is shared space
The average daily rate (ADR) for an Airbnb Plus home is at $200-plus, about $100 extra than the $100 ADR for a standard listing. Qualified hosts must submit an application to get into the program. Once accepted, Airbnb will send a local photographer, who is also an Airbnb host in most cases, to inspect the properties and determine if they meet the brand standards of Airbnb Plus.
Beyond by Airbnb
Beyond by Airbnb is a collection of high-end homes that target luxury-seeking travelers. Airbnb describes this collection on its website as "extraordinary homes with full service hospitality," which is set to debut in late spring of 2018. Just a year ago, Airbnb bought Luxury Retreats, which has more than 4,000 properties with concierge service.
Why adding two brands matters
Today, Airbnb has more than 3 million listings around the world, ranging from a cheap lodging alternative, such as a sofa bed in a living room, to an extraordinary experience in one of the 1,400 castles listed on the website. The debut of these two brands can help Airbnb better segment its products with distinguishable identities, making it easier for travelers to pick the right products that meet their needs.
In return, better brand recognition will help Airbnb win more loyal customers, creating an even bigger threat to hotels. As a matter of fact, hotel chains like Best Western have also adopted a similar tier-branding strategy to improve their products' positions in the market.
Other initiatives taken by Airbnb
As Airbnb is striving to become a full-service travel enterprise, the company has added boutique hotels into its listings, in addition to other unique properties like tree houses and bed-and-breakfast (B&B).
In the last year, Airbnb has seen a 520 percent increase in boutique hotel listings on the website, as suggested by Forbes. Now, there are 240,000-plus boutique hotel rooms and 180,000-plus B&Bs listings on Airbnb.com. In this sense, Airbnb could be helpful to certain types of lodging products.
In another example, since its launch of Airbnb Experience back in November 2016, the service has seen a 2,500 percent growth in bookings over the year. Travelers can now book Airbnb Experience in 60 cities worldwide, a five-time increase from 12 cities at this service's initial stage.
So, what will hotels do in response to Airbnb's new branding strategy? Will they get into the short-term residential rental business, like what Hyatt is doing?
