There was talk of an Airbnb loyalty program over 8 years ago, with some bank executives angling to do a co-brand credit card deal. Members would earn rebates in the form of points to use at Airbnb, banks would make money and Airbnb would make money. But it never happened.
- Airbnb can offer rebates on stays, but never saw the reason why – they think everyone is going to stay with them anyway.
- And the other side of loyalty – better experience for your best customers – is tough for Airbnb to promise because the product is delivered by individual property owners, who aren’t going to want to do things like waive cleaning fees, rules, or offer early check-in and late check-out that could interfere with the time needed to turn a property between guests.
Finally they’re getting serious about loyalty with co-founder Brian Chesky saying they’ll “eventually have something.” However be ‘doesn’t like’ points programs, so they won’t do one. He sees it as a pure cost,
It’s quite literally a subsidy. You’re taking your most valuable people and you’re making them a little less valuable.
If you assume you will get every booking anyway and that rebates do not increase business at the margin, then that’s true. You’re just giving back some of your revenue. However that’s not usually how this works.
- Airbnb is actually in a competitive space. There are other homesharing platforms. They compete against hotels. Customers have a choice.
- Increasingly may consider Airbnbs for business (reimburseable stays). Right now Airbnb is asking them to give up the rebates they get elsewhere.
- And that’s all before the opportunity to turn the marketing expense into a revenue generator, for which you need a points program (to sell currency to third parties).
So instead they’re considering charging their best customers more a la Amazon Prime.
He is toying with the idea of an Amazon Prime subscription model, which he says will bring in more money to provide a better service.
“I think a paid membership is also interesting,” he said. “Like a Prime. We’ve been looking at it for a while and we think that’s also compelling.”
The challenge that Airbnb faces is funding the program. Hotels pay chains for points and then get paid for redemption stays. That’s harder to make work on a single unit basis (although GHA makes it work with small chains). Regardless, they’d have to raise fees (pushing owners away from the platform) or give up margin (fund it themselves) but then those points spent back on the platform might help property owners more than Airbnb itself.
That’s, essentially, I think how Chesky is thinking about it: a points program would cost Airbnb money, but only earn them back a portion of increased business. He likely worries that it would benefit guests and hosts more than Airbnb itself.
- Except right now they’re offering 2 British Airways Avios per dollar spent. They also offer Delta miles. They do have a points program, they’re just renting someone else’s!
- They’ve offered as much as 30,000 Avios to new hosts with their first rental, so ‘subsidizing’ both sides of the platform.
And it’s important to note that loyalty is not just points. Every loyalty program has two components:
- Recognition (elite benefts)
- Reward (rebate)
Airbnb should certainly offer its best customers its best customer service, with no wait and empowered agents. How can they not do this? They have valuable data, their best customers are valuable, and they can easily arrange great experiences with other travel brands – for instance Airbnb Platinums receive British Airways Silver and National Executive status. It’s almost malpractice that they do so little to make their best customers feel like their best customers, while simultaneously failing to monetize their data.
Airbnb is an odd duck: They manage to have legendarily bad customer service for the people staying in properties while still having awful service for property owners. I’ve avoided them so far and can’t see staying in an Airbnb except in the most extreme circumstances.
On a side note, I find considerable value in Amazon Prime, not least of which is the sizeable free library. Where else can you stream every season of Endeavor without paying by the episode or the season, among many other movies and shows? I figure the two day shipping is a nice plus but no big deal.
Airbnb is an extremely bad business run by unethical people. They are happy to take your money but provide zero CS when things go south. And zero to anyone who is harmed by negative externalities (ie adjacent house/apt owners). And they are usually more expensive than comparable options (not surprising as Brian has to get his cut for the software platform)
I avoid as much as possible unless there is no other option.
As a solo traveler, I have yet to see the advantage of booking with Airbnb or any of its non-hotel competitors.
I’m sure I’ll jinx it for myself by saying it, but I’ve had good customer service from Airbnb as a renter.
I stay in a lot of out-of-the-way places where there are no hotels. Sometimes the same property is on Airbnb and Booking.com. The latter is usually cheaper, as I recall, but a rewards program might push me in favor of Airbnb in some situations.
Every tech CEO has an uncontrollable urge to be like Amazon.
DCS:Hilton::Tim Dunn:Delta::Tech CEO:Amazon
And CEOs are aware of this but people like me* think they are dumb.
*Investors/financiers, management consultants, and legal counsel.
Keep thinking about it for another 8 years, AirBnB. Meanwhile , keep offering scammer hosts, garbage fees, inconsistent service, no customer support, and sometimes restrictive check in times…and all the neighbors hate you.
If only there was some kind of business built specifically for traveling people to stay a short time, in rooms rented by the night. Alas, as far as I know, no such service exists, so I guess I have to stay at an Airbnb.
Mantis: I agree with you in part, but Airbnb fills a void in places with no hotels. It still works great when it’s used for renting a couch or spare bedroom. I’m not fond of the trend of people buying up properties to rent them out this way, though. And I concur that the fees are often arbitrary and excessive.
I’m surprised VRBO (the original AirbNB, Vacation Rental by Owner) hasn’t been mentioned? They have great service and great reach. Customer service has been good through many (10+) rentals. My understanding is that they charge less too, which is why owners like them, and finally, they have combined reward points with Expedia?
Not that it matters too much, but for my extended family (20+ people) and business trips, I probably ring up $30k in spending a year just with them, so the rewards are a nice perk?
-Jon
I have been the highest rated host in my area for the past 2 years. I take care of my guests in every way I can. I charge a reasonable price for amazing service. Airbnb already charges very high fees to guests and hosts. VRBO guests are generally better behaved in my experience. Not sure I would continue with Airbnb if they added requirements for elite guests, although it does make sense.
You forgot to mention that you can pay for your stay in gift cards that you purchase from United MileagePlusX app, so you can double dip and get DL & UA points.
@Seth: This is a sincere question. What kind of places are you thinking of with no hotels for which AirBnB is a viable option?
I’ve heard too many horror stories about AirBNB to want to use them. I doubt I ever will.
I have only used Airbnb a few times for one night rentals. They were all fine and priced well. One was in La Cañada Flintridge, CA, a fairly rich city that may not have any hotels. Other places were Naples, FL and Youngstown, NY.
A benefit I would like is an *ACTUAL* reservation guarantee rather than their “we’ll help you find a similar place but if it’s twice as much or half the bedrooms that’s your problem non-guarantee. They won’t even waive their own fees to make you whole.
At least I know my Marriott status actually guarantees me a room.
Joshua K: I’m pursuing a goal to walk the perimeters of 26 islands (one starting with each letter). There are long stretches of Fasta Åland, Kangaroo Island, Oahu, Prince Edward Island, and other islands (even northwestern Singapore) with no hotels. There are also places where hotel prices are exorbitant but Airbnb prices are reasonable. I couldn’t efficiently do this project without Airbnb.
AirBnB has gotten worse with each stay!!
The latest made multiple demands:
– put the garbage out ( yet dumpster was overflowing with debris)
– load dishwasher ( yet no dishwasher in unit)
– very expensive fee for 2 hr early access (sat in court yard, no one in or out of unit while waiting for text with access code, used the pool)
– put dirty towels in tub (had shower stall)
– sweep out unit (no broom or dust pan in unit, used damp bath towel which I threw into overloaded dumpster)
– multiple follow up text & phone calls requesting “positive” review, kept upping a future discount with each call. (never leave a review till manager leaves a review. Allows you room to dispute any penalty fees or negative comments)
Have found myself checking out hotels for future trips. AirBnB is off the radar scope for now.
They have a lot more competition than hotels. Booking.com is a much larger industry player
“You’re taking your most valuable people and you’re making them a little less valuable.”
This is everything you need to know. Instead of trying to give value to the customer, they see the customer as revenue and margin. Which is why they TAKE exorbinant fees but then GIVE horrible customer support. And why they’d want to TAKE extra fees for a prime type service rather than GIVE appreciation in any form to a customer.
It’s also evident they don’t care about guests because its far easier to find a new guest than a new host. As such, they allow for bad hosts to stay on the platform all while chasing away good guests with insane fees and poor support.
The pricing algorithms have made AirBNB stays much less competitive to hotels as they chase higher and higher EPS. Hotels have accounability. AirBNB has none.
I do everything I can to book anywhere else but AirBNB. If I see the same property on Booking or can find it direct or anywhere else, I go that route. I am surprised more hosts don’t have direct booking engines.
Many of us have been customers for a super long time and have stayed a lot of nights and the only reason we use it is because the lack of alternatives. We are well aware the company does not care about us whatever and only cares about itself. The upside, is more hosts have listings on Booking and other alternatives as time goes on.
VRBO predates the gig economy vulture model that AirBnB subscribes to. I’ll stick with VRBO when I need a house for a trip, which isn’t often, but it’s usually more economical with groups that don’t fit in a pair of hotel rooms. I would avoid AirBnB even if they had a program as generous as Starwood’s.
What an out of touch view – this biz was a product of artificially low interest rates
And what is there to be loyal to – it’s a wildly inconsistent product that makes Marriott look consistent
For sure there are places where AirBnb or the like is the only option. Northern California up in the redwoods – there are a few coastal motels but some areas inland where there is nada. Ditto for Turo – places like Hana Maui have air service but no taxis and no car rentals.
That said I don’t really understand people who would pay $$$ for a room much less a couch in someone’s home. Seriously? If you are that broke why bother traveling? Maybe they blew all their cash on concert tix?
If I don’t get the whole place it’s a no go. I stopped staying with strangers as soon as I could afford to jettison hostels and overnight trains.
Boraxo: I’ve had some great conversations with my hosts when staying in their homes. I had a fabulous time in an Airbnb on Quinchao Island in Chile where I got to know the family, superficially partake in their lifestyle, share dinner with them, and play soccer with the kid. I usually do prefer having my own private space, but I’d rather spend $15 or even $40 to stay on someone’s couch for one night (many of my stays are one night) than $200 in a hotel, especially if I’m arriving late and leaving early.
The $400-a-night vacation homes where you have to take out the trash are problematic, but there are still a lot of solid Airbnb experiences.
Booking.com has great customer service for their frequent guests… plus a dedicated phone number with empowered customer service reps. I’ve had things go weird with about five stays, and they’ve always made me whole. Booking is eligible for cash back portals as well.
Airbnb? I was staying in Valencia, Spain when I heard scurrying in the walls. Soon after a rat come out. Yay. The host then killed the rat. I was like there’s never just one rat, I want out. Airbnb took multiple calls on the phone to even get help. I’d had had over 100 stays with platform (in contrast to booking.com who bend over backwards to help after seeing just how much commission they’ve earned off of me.over the years!). They didn’t help me find alternate accommodation. Instead I had to get an Uber across town to a hotel 3X as expensive. Then another trip to a replacement for the Airbnb. It took months for them to even give me a $50 gift card to help offset some of the costs. Because of this, Airbnb is always my choice of last resort.