Airbnb Marketing Analysis: KPIs, Market Segmentation and Positioning

This report provides a comprehensive analysis of Airbnb's marketing strategies, key performance indicators (KPIs), market segmentation, and positioning. It begins with an introduction to the importance of marketing for businesses, highlighting how marketing helps firms identify potential markets and meet their needs. The report then delves into Airbnb's KPIs, including occupancy rates, average night rates, and visibility, explaining how these metrics are crucial for assessing the firm's performance and guiding strategic decisions. Market segmentation and positioning strategies are also examined, with a focus on how Airbnb divides its clients into specific groups and tailors its services to meet their needs. The report concludes with recommendations for Airbnb to enhance its marketing efforts and expand its market reach, including suggestions for venturing into new geographic locations and refining its positioning strategies. The analysis covers the importance of marketing, the role of KPIs, the factors that affect occupancy and average night rates, the impact of visibility, and the different market segmentation and positioning strategies employed by Airbnb.

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Airbnb Marketing
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Contents
Introduction......................................................................................................................................3
Airbnb Key Performance Indicators................................................................................................4
Occupancy Rates..........................................................................................................................4
Average night Rates.....................................................................................................................5
Visibility.......................................................................................................................................5
Market Segmentation and positioning.............................................................................................6
Airbnb Positioning Strategies..........................................................................................................6
Airbnb Market Segmentation..........................................................................................................7
Recommendations............................................................................................................................9
Conclusion.....................................................................................................................................10
Reference list.................................................................................................................................12

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Introduction
Marketing plays a significant role in a firm. Due to marketing, a firm selects its potential
markets and offers the needs of that particular market. Without marketing, a firm may end up
being obsolete in the market as most of its consumers will not be aware of the goods or services
it brought into the market. Through engaging the clients of a firm, marketing ensures that the
business is gradually growing throughout its operating time. Consumers as well will not be able
to know whether the firm has made any innovations on its existing products or services.
Marketing as well plays the role of information transfer between the firms and the clients
(Abdullah Saif, 2015). Through marketing, the clients communicate their needs to the firm or as
well provide their feedback on the goods and services that a firm offers to the market. As much
as marketing plays a superior role in attracting and retaining existing and potential clients, come
businesses are yet to give marketing the importance it has to a firm. Most firms fight to make
profits without necessarily admitting the fact that without proper marketing, the firm will not be
able to achieve its financial targets (Pandurangarao, 2015). For the success of a firm, a firm
needs to invest heavily in its marketing since marketing introduces the firm to its markets. A firm
that needs to improve on its market, for instance, is the Airbnb Inc. Much as the firm attracts
many clients globally, the firm on many occasions fails to meet the demands of the different
market segments it offers its services to. In many reported scenarios, clients have complained
about poor customer relations services and the same is yet to be rectified by the management of
the firm.

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Airbnb Key Performance Indicators
To an organization, Key Performance Indicators form the basis of data needed to
establish and explain how the firm will operate to meet both business and marketing goals. By
looking at the KPIs, a firm is likely to tell to what direction it is moving, if the firm is not
moving to its desired direction, then a turnaround strategy is implemented. KPIs as well tell of
the state of business health, through the KPIs a firm can tell if it is doing well or not (Parmenter,
2020). In Airbnb Inc. the ability to scheme through the performance dashboard, one can track
and compare the KPIs that the firm operates within. For most hospitality firms, the KPIs revolve
around usage metrics, monthly active users, bounce rates and time spent on sites (Maitra and
Srivastava, 2016). All these indicators have the common feature of identifying new and existing
users for a particular website of a firm In Airbnb the performance dashboard helps one compare
KPIs such as market averages and listing performance in various listings across time intervals
(Airbnb, 2019).
a) Occupancy Rates
Among the major KPIs of Airbnb is the occupancy rate. Occupancy Rates refer to the
fractions of days in a month that a property has bookings (AllTheRooms Analytics, n.d.). A
property will tend to make profits if its occupancy rates are high. Occupancy rates fluctuate a lot
mostly because bookings are directly proportional to seasons (Makkonen, 2019). Other factors
that affect occupancy rates include economic and weather patterns experienced in different cities
globally. On average, the Airbnb occupancy rate should stand at 65%; top performers at times hit
75% while new entrants sit at 48%. Basing on occupancy rates as a KPI any firm operating at
anything less than the average is underperforming. Much as this might be because of constraints

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outside the limits of the firm, the firm can use these constraints to their advantage and make
profits. In the USA for instance, some Airbnb facilities operate at an occupancy rate of below
50%, due to fluctuating weather patterns. This occupancy level might tell that such firms are
operating in losses, which is not the case. According to studies, such facilities effectively use the
short-selling seasons to accrue daily average rates that are notably higher than the national rates.
b) Average night Rates
Proper pricing in terms of average night rates in the market is as well a KPI for firms in
the Airbnb Industry. Firms in this market are not monopolies as such they are not price setters.
Firms will tend to operate within specific market rates within the industry. Those firms that tend
to charge a higher price usually is because their target clients can pay an extra amount of money
due to the uniqueness of services offered by such firms (Gibbs et al., 2017). Some firms will
tend to lower prices to attract more clients; in the market, such actions tend to create unhealthy
competition. New entrants to attract more clients mainly use this pricing model (Maican and
Orth, 2018). Prices of these facilities as well are determined by the prevailing seasons, for
instance during Easter and Christmas periods, prices are usually relatively high above the normal
rates. This is propelled by the need and urgency of Airbnb facilities during such periods. Proper
marketing thus is needed by the firm so as not to tamper with the existing facility pricing in the
industry.
c) Visibility
In addition to occupancy rates and average night rates, the aspect of visibility which helps
to check the listings with more views. From such data, the firm understands the needs of a
particular market segment. By getting the details of particular market segments, marketers make
tailor-made solutions to meet such demands (Chen and Xie, 2017). Notably, some listings go

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without any visits by clients for over one week. Such are the loopholes that Airbnb needs to seal
to improve its listings. Visibility varies between Airbnbs due to several reasons. Such reasons
include the location of the Airbnb Facility, the rate of response by customer service team on
client’s requests, the details for the trip and the price of the available Airbnb facility or the wish
list generated by the clients themselves (Kakar, Voelz, Wu and Franco, 2018). From these
selected variables, the firm needs to configure each variable to a specific marketing strategy to
charter for the needs of the entire market. To ensure full utilization of the available facilities,
Airbnb needs to ensure that the visibility of the facilities is simple to understand by potential
clients. The Key Performance indicators interrelate with one another; as such, the marketing
team needs to formulate strategies that blend all the three KPIs to generate a blend for better
results for the firm (Guttentag et al., 2017).
Market Segmentation and positioning.
The creation of a marketing strategy and creating a brand around it by the marketing team
puts a firm in a better place to attain a strong position in the market it operates. To establish a
proper strategy, a firm needs to evaluate the targeted demographics, the position of the
competitor in the market, both the internal and external environment of the firm, etc. (Woodruff,
2019). With such information, a firm can then choose the most suitable strategy to apply to
remain competitive in the market. Ideally, products and services are meant to suit the needs of
different demographic groups. These groups are differentiated in terms of age, gender,
occupation, levels of education levels of income or language (Lutz and Newlands, 2018). A
perfect strategy delivers more value to the clients, creates a stronger market position against
competitors, has more convincing communication and has greater chances of attracting and
keeping clients.

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Airbnb Positioning Strategies
Airbnb market segmentation and positioning strategies are made up of consequential
activities that divide clients into specific groups as well as create an alternate target market
(Dudovskiy, 2019). The choice of strategic positioning is key to best appeals to the needs of the
different market segments. Airbnb employs the following types of positioning.
1. Multi-Segment Positioning- Under this, the firm targets more than one segment in the
targeted demographics with different services suites for the different demographic
listings. For instance, for cost-conscious clients, the firm lists cost effective rental
apartments (Oskam and Boswijk, 2016). The Airbnb Plus suite targets the set of clients
who value luxurious apartments and are willing to pay more for the same. The premium
clients’ segment needs are catered for by the Airbnb Luxe Line, which consists of
premium Five Star Apartments. Multi-segment positioning seeks to ensure that the needs
of all clients are attained.
2. Anticipatory Positioning- This mode of positioning seeks to launch products and services
to the market section with low turnover rates with the belief that in the near future that
turnover rates are highly likely to increase (Neirotti, Raguseo, and Paolucci, 2016).
Among the few Anticipatory Positioning services, offers by Airbnb include Around the
World in 80 days and the experiences of becoming a beekeeper. Anticipatory Position
usually is applicable in situations whereby the probability of a service acceptance is low,
acceptance is deemed to depend on the growth of the needs of consumers in the new
product or service.

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Airbnb Market Segmentation
Airbnb market segmentations are divided into four wide categories i.e. geographic,
demographic, psychographic and behavioral segments (Dolnicar, 2019). These segments are
divided according to the needs and specifications of different segments within the market. Under
geographic segmentation, the firm targets both urban and rural areas, in about 191 countries in
the world. Much as the firm is operational in the American and European Markets, the firm is yet
to venture into Africa and parts of the Caribbean. This is a good opportunity for the firm to reach
out to a wider clientele base. Based on the needs of the clients; a client can choose an apartment
within or far out of the city. Airbnb seeks to grasp such clients and offer such services to them.
The listings in Airbnb are from basic to executive to cater to the needs of all clients to the firm.
Demographic segmentation consists of age, occupation and life cycle of a client. The firm mainly
targets clients of between 18-45 years, students, as well as professionals. From its targets, it
leaves the group of below 18 years as well as that above 45 years. These left out groups as well
can be of immense help if considered by the firm as potential targets. Students traveling for study
purposes are the main target since affording accommodation in a new country is quite expensive.
Based on behavioral segmenting, the firm targets clients based on the degree of loyalty,
personality, user status i.e. habitual or first-time users and the benefits sought by the user.
Psychographic segmentation lastly encompasses the social class of a client or the lifestyle of the
same client.
For a firm to meet both its business and marketing targets, it needs to create a blend
between the positioning strategies and the selected market targets. If the selected positioning
strategies do not seem to accrue the firm its projected outcomes, then a review of the strategies is
mandatory. For Airbnb choosing to settle for anticipatory and multi-segment positioning may

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meet the marketing targets but not the business targets. Currently, the whole world if faced by
the corona virus crisis and it is not clear on when this is likely to end. Anticipatory positioning as
such might not work for the best of the firm.
Recommendations
For Airbnb to meet its long-term objectives, it has to widen the scope of the clients it
serves. The firm should develop its positioning strategies to meet the needs of a wider market at
the same time. Among the key recommendations considered for the firm, is the idea of venturing
into Africa and the Caribbean. These two locations have some of the fascinating sites for holiday
purposes. Much as local hotels are operating in these places, the hotels charge relatively high
prices due to the seasonal aspects of the need for hotel services. Being among the world's best
hotel industries, Airbnb can widen its geographic scope to such areas and offer discounted prices
for better quality of services. Notably in such markets, monopolies do exist and as such, they
tend to exploit clients. To overcome the same Airbnb needs to get into such markets and offer
services at that price that the locals are willing to pay. This will see to it that the quality of
services is improved and price exploitation diminishes in the market. Emerging and Developing
Market Economies are potential clients to Airbnb. As industrialization seeks to take shape in
such economies, so does the need for the services of Airbnb, for the management of the Airbnb
to meet its targets, it should fast move in to venture in such economies before other competitors
set in.
Airbnb fails to incorporate teenagers and elderlies as one of its target markets. This is
untapped gold for the firm since these two groups of clients will need additional services that in
most cases can be offered by the firm or outsourced for a small fee. Children of between three to
eight years will need playgroups and an instructor for them. If Airbnb chooses to set this age

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group as a potential client, it is most likely to have an overflow of children during festive seasons
and school holidays. Most parents will be glad to choose such packages as long as the security of
their children is guaranteed. For the elderly, mainly early retirees, who want to explore the world
after years of working. Airbnb can consider such people and set up packages that suit the needs
of this group.
Another recommendation that may help the firm achieve its long-term business goals is
the modification of the pricing strategy. Most clients are price conscious and as such, will not go
for prices that seem too high for them (Zhong et al., 2018). Based on the degree of loyalty, the
firm has hardcore loyals, soft-core loyals, and switchers. Switchers belong to that group of
clients who still do not believe in the quality of services offered by the firm. Ideally, they set up
the untapped clientele base of the fir. The firm can choose to offer discounted prices at different
rates for both the hard-core loyals and the soft-core loyals. The firm as well should try to offer
the quality of services and in a variety of forms depending on the needs of the clients. By
offering discounted prices and improving service quality, the firm seeks to reduce the number of
switchers by gradually graduating them to either soft cores or hardcore loyals of the firm (Roma,
Panniello and Lo Nigro, 2019). The firm as well should increase the variety of services it offers
other than the basics. A firm that offers a wide range of products and services other than those
offered by competitors has a higher competitive advantage in the market.
Conclusion
In conclusion, for a firm to meets its long-term objectives, it needs to consider its market
segments and the positioning strategies it picks to operate in the market. In a highly competitive
market, a firm may adopt to use more than one strategy. The strategies chosen should make the
firm remain competitive both in the long run period in the short run periods. Firms as well need

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to invest in their marketing and campaign teams to ensure that their products and services sell
faster than those of its competitors do. For Airbnb, expanding its market segments and
modification of its positioning strategies will make the firm meet most of its long-term objectives
in the short-run period.

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Reference list
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strategic-decisions/.
AllTheRooms Analytics. (n.d.). Average Airbnb Occupancy Rates By City | AllTheRooms.
[online] Available at: https://www.alltherooms.com/analytics/average-airbnb-occupancy-
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Chen, Y. and Xie, K. (2017). Consumer valuation of Airbnb listings: a hedonic pricing approach.
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Dolnicar, S., 2019. Market segmentation analysis in tourism: a perspective paper. Tourism
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targeting-positioning/.
Gibbs, C., Guttentag, D., Gretzel, U., Morton, J. and Goodwill, A., 2017. Pricing in the sharing
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Tourism Marketing, 35(1), pp.46-56.