Is Airbnb Lacking B2C Loyalty?

Jul 25, 2023

Airbnb, the renowned short-term vacation rental platform, has been intriguingly missing a robust guest loyalty program.  In 2018, plans for a “Superguest” initiative were announced, but it never came to fruition, leading to speculation about the underlying reasons for its absence. According to a recent WSJ article, a “guest loyalty program” was one of the top suggestions from users on how to improve Airbnb. So, why doesn’t one of the most recognizable travel companies in the world have a loyalty program? Was it solely due to the disruption caused by the COVID-19 pandemic, or were there other factors at play?

With loyalty expertise in the Travel & Hospitality, Kobie sees that one significant challenge could be Airbnb’s limited share in the business travel market, accounting for just about 14% of bookings. Successful loyalty programs in the travel industry thrive on a mix of business and leisure travel. With a limited presence in the business segment, the motivation for implementing a rewards system may have been less compelling for Airbnb.

Furthermore, Airbnb faces a unique hurdle due to its diverse property offerings. Unlike hotel chains, which offer standardized benefits, the independent nature of Airbnb’s host community complicates the implementation and communication of consistent rewards.

Creating a funding model for such benefits presents another obstacle. The diversity of Airbnb’s host network and varying price points make it difficult to establish a funding model that satisfies all hosts. Introducing a points system could lead to uneven redemption burdens on certain properties or regions, necessitating intricate solutions that may be challenging to agree upon among hosts.

Another potential deterrent is the cultural positioning of a loyalty program. Airbnb’s core user base consists of younger, price-sensitive individuals who might be less inclined to engage with a traditional loyalty program. Designing a loyalty program that resonates with this demographic could pose an additional challenge.

Airbnb might argue that it doesn’t need a loyalty program. Unlike car rental and hotel companies that use loyalty programs to create differentiation due to their homogeneous offerings, the diversity of Airbnb properties allows each listing to stand out uniquely.

However, the absence of a loyalty program could mean missing out on potential revenue opportunities. For example, co-branded credit card-related revenue, a source frequently used by hotels to fund loyalty programs, remains untapped for Airbnb. Additionally, a loyalty program could incentivize direct bookings, allowing the platform to retain a larger share of profits.

Moreover, a well-designed loyalty program could offer a structured framework to address inconsistent booking and property management interactions that occasionally occur on the platform.

One innovative idea is to use a co-brand card as the basis for the loyalty program, allowing providers to opt-in independently. Nevertheless, convincing frequent Airbnb users, who likely already have universal rewards cards offering value across multiple platforms, to switch to an Airbnb-specific card could be a challenge. Additionally, the individual and unique nature of Airbnb rentals might dilute the potential benefits a loyalty program could offer, as guests often perceive their experience as more tied to the property and host than the platform itself.

Crafting a compelling, effective, and mutually beneficial loyalty system for all stakeholders remains a complex challenge for Airbnb. While a small percentage of Airbnb’s user base might find value in a loyalty program, determining whether this opportunity is substantial enough to warrant implementation remains to be seen.

If like Airbnb, you are exploring ways to reward your best customers, Kobie’s team of loyalty experts can help you think through how to design a program while ensuring it continues to be profitable, engaging, and loved by members. Let’s connect today.