Airbnb’s current market situation could mark a turning point in the future of the company, placing its marketers in a critical influential position. At the beginning of September 2023, New York City’s Local Law 18 came into effect, enforcing stricter regulations on short-term rental properties in order to improve short-term housing in the city. For rental companies like Airbnb, however, this poses a serious inventory challenge amidst an industry already in flux with falling home prices and rising mortgage rates.
There are two sides to Airbnb marketing:
- How does Airbnb market its own brand so that people want to list their properties through the company?
- How do hosts market their properties to potential renters?
As Local Law 18 is enforced in NYC, Airbnb will struggle to keep inventory for short-term rentals because the law applies specifically to rentals of 30 days or less. 1 Enforcement of this new law involves requirements such as renter applications for a fee, locking doors inside the home is prohibited, hosts must be present for the duration of visitor stays, and more, which can make it uncomfortable for potential renters to choose these short-term rentals. 2 Instead, they are likely to turn to hotels. This also deters rental hosts who may not wish to maintain these stricter regulations. The role of marketers will play a more critical role for Airbnb in NYC as they try to answer this question: What would make both hosts and renters willing to jump these new hurdles for short-term renting in NYC and continue to use platforms like Airbnb?
One potential marketing solution that could be employed to handle this impending inventory decrease is to market Airbnb in NYC as a luxurious and more exclusive alternative to hotels. Luxury companies often brand themselves as exclusive and enforce this perception by limiting inventory. We also see this with companies that release limited edition products. These products are produced in limited quantities, and this product scarcity drives interest in acquiring the products. Airbnb has an opportunity to position their NYC rentals in the same manner.
Why stay at a regular hotel like everyone else for your next romantic getaway? Experience an exclusive stay unique to Airbnb NYC.
Developing this kind of exclusivity hype has the potential to work in Airbnb’s favor as they try to manage these new issues.
Ultimately, time will tell how Airbnb’s marketing teams handle this developing situation, but this is a good example of the sometimes-chaotic nature of marketing jobs and the flexibility required of marketers to stay on their toes to overcome challenges out of their control.
“Sometimes the disruptor gets disrupted — then what? Fifteen years after upending the travel industry by enabling regular people to rent out rooms, houses and apartments to travelers, Airbnb is now having to contend with an industry that’s fighting back.” 3
This is but one example of Airbnb’s current marketing struggles. Across the country this year, home sales fell, and mortgage rates skyrocketed. 4 Because the housing industry has been so uncertain, Airbnb has seen its fair share of critics and predictions for declining bookings and revenue, even rumors of collapse. 5 Forecasts for the summer’s performance were dismal, but “Americans are still booking short-term rentals at record rates, beating expectations.” 6
Fortunately, bookings have been higher than predicted so far this year. Although, the number of hosts has increased, and many are struggling to get bookings because of the increased competition. 7 Not only are hosts attempting to capture renters’ interest, but they also have to compete with each other. So, Airbnb also has to encourage hosts to market their own listings well. If the listings don’t look their best, they are less likely to be booked, thus impacting Airbnb’s success in turn.
Airbnb provides content on best practices and tips to hosts: “Boost your chances of getting booked by effectively marketing your listing.” 8 Marketing a property on Airbnb is not about simple uploading pictures and generic information. Tips like building a personal brand through storytelling strategy, setting performance goals, and crafting properties to be worthy of going viral on social media as a promotion tactic are featured on Airbnb’s blog for people to improve their listings and performance. These are the kinds of marketing strategies employed by firms of all sizes and industries, but these efforts need to be made by property hosts in order to stand out and be successful.
Social media can be both a hindrance and a great tool for marketing. It can create significant positive impact on branding and increase key performance indicators (KPIs) like bookings. It can also spread rental horror stories of vacations gone wrong. This summer, TikTok influencer Alix Earle visited Italy with her friends. They rented a house, which turned out to be a scam. Airbnb jumped at the opportunity and provided a villa for the social media star and her friends. This quick-thinking perfectly took advantage of a promotional moment to highlight Airbnb as the savior of TikTok it-girl’s summer vacation.
You can watch their reaction here:
With changing industry regulations and uncertainty in the housing market, Airbnb is certainly facing challenges. Effective marketing, however, can help Airbnb maintain brand loyalty with both hosts and renters by using tools to their advantage like social media marketing and brand messaging.
Questions marketing managers would consider:
- If you were part of Airbnb’s marketing team, what strategies could you use to increase bookings?
- What predictions would you make about the future of rental platforms like Airbnb?
- How can Airbnb reposition itself to adjust to its changing environmental conditions and remain successful?
Resources
1 City of New York. (2023). Short-Term Rental Registration and Verification by Booking Services. NYC Office of Special Enforcement. https://www.nyc.gov/site/specialenforcement/registration-law/registration.page
2 Sachs, A. (6 September 2023). What New York City’s new Airbnb rules mean for travelers. The Washington Post. https://www.washingtonpost.com/travel/2023/09/01/nyc-airbnb-rules-local-law-18/
3 Baar, A. (18 September 2023). Airbnb’s marketing touts short-term rental benefits amid tighter local restrictions. Marketing Dive. https://www.marketingdive.com/news/airbnb-marketing-campaign-new-york-city-rental-law/693509/
4 Rothstein, R. (5 October 2023). Housing Market Predictions For 2023: When Will Home Prices Be Affordable Again? Forbes. https://www.forbes.com/advisor/mortgages/real-estate/housing-market-predictions/
5 Cariaga, V. (9 July 2023). Housing Market 2023: Viral Tweet Says ‘Airbnb Collapse Is Real’ – Is Now the Time to Buy a Home? Yahoo. https://finance.yahoo.com/news/housing-market-2023-viral-tweet-113009741.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAANY3mk-8ckJ5_uOjRSAuvcId-ltnpsoXfK1Na19xXJCytKnxI_BDnvsdx9QE6h8TF4BHxKYXL4GpLyVnMLXAAnG3OQahppRO5VbnwyaFHV5liRPPgfzjMwGC-jc_1iGcVwwAPfcg7Bxt2gx2sc-so9VKy6uWLDJIspzr32aS1l7Q
6 Latu, D. (24 June 2023). It’s a cruel, unpredictable summer for Airbnb and Vrbo hosts – but it also might be the new normal.Business Insider. https://www.businessinsider.com/airbnb-vrbo-hosts-summer-slowdown-new-normal-2023-6
7 Latu, D. (24 June 2023). It’s a cruel, unpredictable summer for Airbnb and Vrbo hosts – but it also might be the new normal.Business Insider. https://www.businessinsider.com/airbnb-vrbo-hosts-summer-slowdown-new-normal-2023-6
8 Airbnb. (2023). Marketing & promotion. Airbnb, Inc. https://www.airbnb.com/resources/hosting-homes/t/marketing-promotion-10
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