Airbnb, a leading peer-to-peer home rental platform, had been growing in popularity before the COVID-19 pandemic, with a global presence and rapid growth. However, in 2020, the pandemic brought the travel and tourism industry, Airbnb’s core business, to a near-instant standstill.
This led to the company losing about 80% of its business in a very short period of time . Brian Chesky, Airbnb's CEO, described this period as a time when the company was "on the brink." This crisis forced Airbnb to fundamentally rethink its business model and marketing strategy to survive and adapt to the new market reality.
Before the pandemic, Airbnb relied heavily on performance marketing , allocating a large portion of its advertising budget to digital advertising campaigns and search engines like Google. This approach aimed to drive immediate consumer actions , such as booking accommodations, without necessarily emphasizing a long-term vision for branding.
However, this strategy failed to allow Airbnb to build a strong, distinct brand identity as competition in the home rental industry increased.
2. The Strategic Pivot during the Pandemic
Faced with the pandemic, Airbnb made a radical choice by massively reducing its performance marketing spending and turning to a strategy focused on brand marketing .
This transformation has been a key element of the company's resilience and recovery, with three main axes:
Reduced performance marketing spend : Airbnb reduced its investment in paid search campaigns (Google Ads, etc.), which were previously the backbone of its advertising strategy. Airbnb understood that performance marketing alone could no longer allow it to control its own narrative or cultivate its differentiation in the market.
Focus on brand marketing : Airbnb launched several creative and bold brand campaigns designed to remind users of the platform’s core values. For example, one ad showed a group of friends looking to relax, only to find a hotel pool full of screaming children. The solution? A stay in an Airbnb home with a private pool, illustrating the benefit of a quieter, more personalized experience. These ads aimed to reconnect customers with the essence of Airbnb’s offering, which is centered around authentic, personalized experiences.
Refocus on hosts and experiences : Airbnb has been highlighting its hosts and their stories in its campaigns, launching initiatives like “Airbnb Rooms,” which showcases private rooms in shared homes. An ad campaign was designed to reassure users skeptical about sharing spaces with hosts by providing more personal information about hosts via a “Host Passport,” adding a more human and narrative dimension to the experience.
3. Tangible Results of the New Strategy
The decision to move away from performance marketing to brand marketing has paid off:
Maintaining traffic despite lower ad spend : Airbnb managed to reach 95% of its 2019 traffic despite reducing its performance marketing spend. This shows that the brand’s prominence strategy has strengthened Airbnb’s appeal to consumers, even without intensive digital advertising.
Record Financial Results : In February 2023, Airbnb posted its most profitable quarter ever , with revenue up 24% year-over-year and EBITDA of $506 million. These results demonstrate the strength of Airbnb’s strategy and its ability to attract customers without having to invest heavily in digital advertising.
Strengthening Differentiation : Airbnb has been able to redefine and strengthen its unique positioning in the short-term rental market by highlighting distinct accommodations and experiences. For example, categories such as treehouses or unusual accommodations like a potato house in Idaho have helped Airbnb differentiate itself from traditional hotels.
4. The Role of In-housing in Brand Strategy
Another pillar of Airbnb’s transformation has been the in-housing of its marketing and creative activities. Unlike many large companies that outsource the creation of their advertising campaigns to agencies, Airbnb has chosen to keep its ad design, product design and even technology in-house .
This has several advantages:
Product and Marketing Alignment : By integrating advertising production within the company, Airbnb was able to ensure that its marketing message was fully aligned with its product developments. For example, brand campaigns on Airbnb Categories were directly linked to product innovations, illustrating the diversity and uniqueness of Airbnb’s accommodations.
Agility and control : Insourcing creative activities allowed Airbnb to respond more quickly to market changes, while maintaining full control over its storytelling and branding.
Encouraged Creativity : Airbnb CEO Brian Chesky, having a design background himself, has been able to support and encourage a culture of creativity within the company. According to Hiroki Asai, Airbnb’s CMO, this has been crucial to the success of insourcing creative activities.
5. Future Challenges and Opportunities
As Airbnb continues to grow, a key challenge will be maintaining this brand-centric approach while expanding into new markets , particularly in Asia-Pacific, a region where the company sees huge potential.
Maintaining the "share of voice" in the face of increased competition, particularly from traditional hotels, will also be a challenge.
Additionally, as the global economy faces uncertainties, Airbnb's ability to maintain a brand-based marketing strategy without resorting to massive increases in advertising spending could be tested if marketing spending by "traditional" hotel chains increases.
Key Lessons to Learn:
Brand First : Airbnb shows that by focusing on brand, it is possible to maintain a strong connection with customers and drive long-term growth, even in challenging economic conditions.
Product-marketing integration : Ensuring consistency between product innovations and advertising messages is crucial to creating lasting differentiation in the market.
Creative in-housing : This strategy, although difficult to manage for some companies, allows for better internal cohesion and better control of the quality and speed of creative productions.