Booking.com booked 400.4 million short-term rental (STR) nights last year. This was 80% more than Airbnb’s total number of nights. Booking.com also generates nearly twice as many nights for each listing on its platform than Airbnb. Booking.com saw a growth rate of 17% for STR listings compared with only 4% at Airbnb.
Booking.com has overtaken Airbnb as the leading STR provider.
Airbnb’s advantage as the first mover in the short-term rentals (STR) market diminishes rapidly. Airbnb is losing ground to Booking.com, the OTAs and other online travel companies despite its claims of innovation, uniqueness, and market leadership.
Online travel best practices include a loyalty programme. What have all major OTAs and local activities OTAs such as Viator, GetYourGuide, airlines, car rental companies cruise lines, hotel chains etc. What do all major OTAs, local activities OTAs like Viator and GetYourGuide, all airlines, car rental companies cruise lines hotel chains etc. have in common All of them offer loyalty programs.
A loyalty program reinforces your brand’s perceived value proposition and strengthens your travel consumer’s emotional connection to your brand. Loyalty means repeat business. Repeat business is cheaper than direct sales.
All major players in the travel and retail industries have embraced loyalty programs as their main asset. The programs are not just a great way to get repeat business but also provide valuable data and insights from the first party. These companies shower their loyalty members with benefits, discounts and other perks to keep them coming back.
Airbnb is being arrogant by not having a customer loyalty program.
Airbnb needs to increase revenue by delivering more roomnights to existing hosts. It can’t rely on new inventory or revenge travel after the pandemic. Airbnb has been a talking point for years. It is a “noun and verb” that’s universally accepted. The same could be said for another company named Xerox.
Airbnb’s Achilles Heel is, in my opinion, the lack of any loyalty program. In place of failed corporate strategies and poorly executed experiences, such as “back to basics” shared room, etc., Airbnb should focus on implementing successful initiatives. Airbnb needs a Loyalty Program that is similar to Expedia One Key, Booking’s genius and Booking.com’s Genius.
Expedia’s Vrbo program and Booking.com have 220 million members between them. Both offer discounts and perks when booking the same STR property you find on Airbnb and other STR platforms. Imagine if you were an Airbnb customer. You would get points, discounts, or perks for booking the same STR properties on Booking.com or vrbo but nothing on Airbnb.
Those who rent short-term accommodations are not from Mars. PhocusWright reports that 45% STR customers compare rentals and hotels. They would book a hotel room for business travel, or shorter leisure trips. However, they would rent an Airbnb unit for extended stays or family reunions. Airbnb and hotels are in a “booking battle”.
Airbnb’s competitors include not only Booking.com, Expedia, or vrbo, but all the major hotel chains and boutiques as well as luxury hotel brands. All of these have reward or loyalty programs.
Marriott’s Bonvoy loyalty program, for example, has grown by 16% to 228 million members in 2024. This represents 73% of US bookings and 66% of global bookings. Marriott’s Homes & Villas program offers over 140,000 curated homes and villas globally and is direct competitors to Airbnb’s core business.
Hilton has also announced that Hilton Honors will have 211 million members by 2024. That’s a 17% rise from the previous year.
Airbnb has missed a strategic opportunity with Sponsored listings:
Airbnb does currently not offer paid listings, where hosts pay a fee to make their property appear higher on search results. Airbnb’s rating system instead relies on factors including guest reviews and host history as well as the perceived value.
How can you differentiate your STR property from the others? Sponsored listings? Of course! Yellow Pages introduced sponsored listings over 150 years ago. Yahoo introduced sponsored listings to the online world thirty years ago. Google started it 24 years earlier. Expedia Travel Ads began 17 years back. Booking.com started doing this more recently. This is a no-brainer.
Why does Airbnb not offer sponsored listings? This is a classic case of arrogance and not recognizing the benefits of online travel.
Booking.com offers a more robust loyalty program than Airbnb and a thriving Sponsored listings product. Booking.com, which is rapidly catching up to Airbnb in the sector of STR, has a robust loyalty program.
See related LinkedIn post by Miroslav Gospodinov
