News & Views

Event Debrief / Airbnb Open 2015

by Contagious Contributor

It’s hard to articulate the atmosphere and spirit of the Airbnb Open 2015, the brand’s annual global conference that attracted 5,000 hosts from 106 countries, writes  Barry Mowszowski, reporting from the event in Paris. 

Passionate hosts drawn from countries ranging from New York to New Zealand, descended on Paris for three days of inspiration in November 2015 in a conference designed to further enrich the community of Airbnb.

The conference itself is unlike any other as it united company founders, over 300 staff from San Francisco HQ and an audience of global hosts, which essentially are the “Airbnb product” and form the core of the community.

While iconic brands such as Apple and Nike have built communities through adoration for products, Airbnb is the blueprint of a new kind of engagement model. By placing global hosts at the core of the brand experience, Airbnb founders and executive teams have invested heavily in hosting an annual conference designed to bring hosts closer to the vision of the brand. Airbnb Open announced new site and  product features that promise to reduce friction in the travel and planning process for both hosts and guests.

As I settled into my seat for the keynote address by Brian Chesky, CEO and co-founder of the brand, the $US17bn Marriott and Starwood Hotels merger deal was coincidentally announced to create the world's largest lodging company. The move signalled consolidation in the travel industry designed to better compete with upstarts like Airbnb who are aggressively stealing marketshare.

I gained an insight into the Airbnb brand that totally reframed how I saw its value proposition. While Starwood and co view Airbnb as a competitor, Chesky spoke passionately about how the brand has segmented its audience by courting a different type of customer altogether.

‘Live like a local, not a tourist’, Chesky boldly proclaimed, emphasizing the critical role that the hosts themselves play in curating a cultural experience in a city, creating a significant and powerful difference for visitors.

Positioning Airbnb as a global community of hosts catering to local experiences is the key to unlocking new streams of revenue for the business. This helps explain why the company has been considered as the world’s third most valuable privately held startup, just behind Uber (valued at $62.5bn) and Xiaomi ($46bn) according to FastCompany.

In keeping with its role as a travel industry disruptor, a noticeable theme throughout the conference was an “us vs. them” mentality, a sentiment echoed by Chesky to rapturous applause when he commented that: Being a host, I think a lot of times, we’re misunderstood. Not only are we sometimes misunderstood, sometimes we are even attacked.

These “attacks” have emerged due to criticisms such as the Attorney General of New York for example, who recently accused Airbnb hosts of running their apartments like hotels, making large profits, and increasing overall rent for residents in the city. Airbnb has responded, explaining that the majority of hosts make up basic living costs by renting out their homes.

The tide of change has gathered so much momentum concerning sharing economy style business models that Governments and local municipalities will increasingly have to accommodate for the Airbnb experience in local markets. The key weapon in this commercial fight that Airbnb can leverage is that the hosts themselves are the soldiers on the ground applying pressure to legalise the renting of rooms or entire apartments.

It makes sense then that 5,000 hosts from around the world would pay their own way to experience Airbnb Open, as the brand experience is a source of income for a spectrum of age groups and life-stages.

In December 2015, the Huffington Post reported analytics that revealed that about 10,000 hosts were making between $10,001 and $50,000 a year, and about 127 hosts were making between $127,000 and $350,000 a year by renting out their entire homes.

The commercial argument that Airbnb is no doubt making to local Governments is that it fuels tourism and local commerce, aided by hosts who facilitate those experiences. The jury is out though on how growth will be affected by an increase in fees and taxes as a result of future agreements between the brand and local Governments eager to recoup lost revenue on guest stays.

Caring economy

The sharing economy is Airbnb's business model but the caring economy is its currency.

By catering to the unmet needs of guests, Hosts from 106 countries learned of ways in which they could embrace hospitality as a means of building a profitable and lucrative business.

Airbnb is essentially a matchmaker service between hosts and guests and there are a series of emotions at play that affect the decision making of both parties. In a series of workshops designed to address the uncomfortable truth that guests lack trust in the host, Airbnb leveraged the most seasoned executives to educate and inspire hosts to welcome guests into their homes by embracing the principles of hospitality.

In intimate breakout sessions run by staff such as Chip Conley, head of global hospitality, on Hospitality moments of truth, hosts were instructed on how to cater to the guests needs throughout the experience.

Powerful stories were told featuring Michael and Debbie Campbell, retirees from Seattle who spent two years travelling around the world staying with hosts. Seeing the power of Airbnb in this context is awesome as you appreciate how limiting hotels are and how connecting through local hosts unlocks cultural experiences that you wouldn’t find in a concierge map from a traditional hotel.

Among the new site features announced at the conference is the new Host Stories tool, which is essentially a community hub. By celebrating the hosts and sharing guest experiences, Airbnb is looking to scale its offering, converting travellers into advocates.

Belong Anywhere: a communications platform ripe for storytelling

Having spent my career in creative and media agencies, I found myself falling in love with the Belong Anywhere brand positioning and purpose.

It's intended to be a rich platform with infinite storytelling potential that can be activated in any city. Airbnb’s marketing team led by Jonathan Mildenhall has created a beautiful body of marketing and communications that refreshingly connect the values of the host community with the ambition of the brand.

Leveraging the truth that with Airbnb you’re staying with real people in real homes, Peter Giorgi, ‎global head of advertising and content, led an inspiring breakout session in which he shared five tenets of the brand experience:

1. Inspire conversation
2. Deeds mean more than messages
3. Mine human truths
4. Global resonance and local relevance
5. Measure, learn and optimise

A series of campaigns were shared which brought this framework to life, my favourite of which was the simplicity of the #onelessstranger campaign where $10 was given to hosts to go make new friends. The content was then captured and promoted via owned assets as well as earned media.

Another reason why the Belong Anywhere platform is timeless and culturally sustainable is because it enables you to execute against a range of emotional and rational ideas. The current global campaign leverages the rational benefit of renting space in your home as the income affords you to live the life you imagined. The campaign tells stories of a surfer who used the money to pursue his passion while a couple renovated their home with the additional income.

As I sat through a series of sessions over the two days of the conference, I could feel the tension though between the communications platform of belong anywhere and the hesitancy of hosts to welcome everyone.

While its business model is thriving, at its core Airbnb is an experience facilitated between people and a key barrier to growth is the need to avoid a hidden bias when connecting with travellers. A conversation with a 60 year old female host from Milan, Italy informed me that she refused to host Americans and Australians as they were “untidy and wouldn’t respect my home that I share with my husband and daughter”.

When I asked how many guests she has entertained from those countries she acknowledged that she hadn’t had any and that she has formed that impression after a friend of hers had a bad past experience on Airbnb renting a room to an American and an Australian.

In this case, a bias against two cultures of significant commercial value is preventing this host from growing her share of guests from these markets, something that Airbnb executives recognize and are determined to address through education and broadening cultural awareness.

The irony is that Belong Anywhere is all about global connectedness, but I observed that many of the hosts I spoke to shared a sense of hesitation to share their homes with particular cultures.

Airbnb opened my eyes

Airbnb Open proved transformative for me as I discovered a new model of brand engagement for connecting with a community.

From an innovation point of view, Airbnb is constantly evolving its offering to deliver more value to existing audiences while striving to connect with new ones. The smart pricing tool announced at the conference will automate prices around guest bookings to capitalize on events etc. that justify charging higher prices for stays. Airbnb Business was also announced at the conference and it will be fascinating to observe the growth of this segment among price sensitive businesses and if it gains market share from hotels.

After experiencing the power of the Airbnb brand at its best in Paris, I am convinced that the trend of clients hiring storytellers from agencies and the like will only accelerate. The executive talent assembled at Airbnb across marketing, operations, hospitality and user experience is exceptional and the magic of the brand experiences is infectious. A brand obsessed about with potential for human hospitality to open up the world is sure to be a motivating factor for agency folk in search of a refreshing career change.

What's next

With a presence in 190 countries, 34,000 cities and over a million hosts, Airbnb’s future is bright and I anticipate rapid innovation from the brand in 2016.

While speculation continues that the brand may go public, in 2016 I believe that Airbnb will look to monetize experiences throughout the travel journey, beyond just providing accommodation.

Imagine a scenario where you land in Barcelona and your host of a similar age and shared passion for football welcomes you with a sim card that you pre-ordered during your Airbnb reservation. You’ve also bought tickets to a local Barcelona game and made dinner reservations, all via your Airbnb mobile app.

The brand has been quietly experimenting with these offerings in the San Francisco market, offering travellers the opportunity to experience the city like a local and to “get off the beaten path with the Airbnb community”.

Jonathan Mildenhall spoke passionately about Airbnb’s desire to become a superbrand for a new commercial and societal era. By continuing to embrace hosts as the heart and soul of the brand experience, Airbnb will ensure that you can “Belong Anywhere” and the brand might just realize Mildenhall’s ambitious vision.

Barry Mowszowski is a strategy director and 2013 recipient of Contagious Magazine Scholarship,
Exec MBA Creative School of Leadership, Berlin Germany