Unpacking Airbnb's Ecosystem: An Analysis Using the Ecosystem Strategy Map (ESM)
Explore Airbnb's $8.4B 2022 revenue-driven ecosystem strategy reshaping travel with role versatility, partnerships, and innovation.
Airbnb is not just another travel and hospitality platform; it's a multi-layered ecosystem that has redefined the way we experience travel. With a revenue of $8.4 billion in 2022 and a net income of $1.9 billion, Airbnb has established itself as a dominant player in the industry.
Even more important, Airbnb has demonstrated that profitable growth in a traditional industry is possible if you follow an ecosystem approach. As of Q2 2023, the platform boasts over 7 million active listings, offering travelers a plethora of unique accommodations and localized experiences. But what sets Airbnb apart is its focus on multiple facets of the customer journey, from proximity to tourist attractions to staff recommendations and professionalism. The platform also places a strong emphasis on quality control, cancellation policies, and accurate descriptions to ensure customer satisfaction.
Airbnb has revolutionized the travel and hospitality industry by creating a unique ecosystem that connects travelers with local hosts and furthermore, provides a selection of experiences with well-curated partners.
But what makes Airbnb's ecosystem so successful?
To understand this, we'll use the Ecosystem Strategy Map (ESM) for mapping Airbnb’s offering portfolio:
Orchestrating a Symphony of Experiences
Airbnb acts as an Orchestrator in several Life Areas, creating platforms that connect various stakeholders. In the realm of Entertainment, Airbnb offers a portal for excursions, insider tips, and holiday experiences, providing recommendations that go beyond traditional sightseeing. This enriches the travel experience by offering localized and immersive activities.
With its Neighborhood platform, Airbnb dedicates space for local tour guides to offer personalized experiences. This not only enriches the travel experience but also provides a platform for global experts to share their knowledge and passion, making each trip unique and deeply rooted in local culture.
Similarly, in the Socialize Life Area, Airbnb's Discoveries platform fosters local communities. It allows people to meet new individuals, both hosts and fellow travelers, thereby enriching their social lives. This is an extension of their core offering, which already allows people to connect with hosts and other travelers.
When it comes to Work, Airbnb acquired Gaest.com, an online marketplace for meeting rooms. This complements their "Live and Work Anywhere" program, allowing for a flexible work environment and making it easier for people to work while traveling.
Realizing Human Needs
In the Recreation Life Area, Airbnb has diversified its core offerings (bringing travelers and hosts together) with Airbnb Plus and HotelTonight. Airbnb Plus is a selection of homes verified for quality and comfort, offering an elevated experience for travelers looking for something more than the average stay. HotelTonight, an online travel app acquired by Airbnb, expands the range of accommodations by including last-minute hotel bookings, thereby catering to the spontaneous traveler as well.
As a Realizer, Airbnb provides more direct services to consumers. In the Recreation Life Area, the company offers Luxury Retreats, a full-service rental service for villas, and Luckey Homes, which provides both online and offline services like key exchange, house cleaning, and preparation. These services fulfill the consumption needs of travelers looking for a bit more luxury and convenience in their stays.
Enabling a Seamless Journey
Airbnb also acts as an Enabler by facilitating services that make the customer journey more seamless. In the Mobility Life Area, the company has a cooperation with British Airways through the Avios points program. This partnership allows travelers to earn points that can be redeemed for flights, making Airbnb an integral part of the overall travel experience.
In the Work Life Area, Airbnb has a partnership with SAP Concur through Concur TripLink, a travel management tool for businesses. They also offer AdBasis, an analysis tool for search and mobile ads, making it easier for businesses to manage their travel and advertising needs.
Expanding the Ecosystem
Airbnb has also ventured into new territories like Consumption, where the company acts as an Orchestrator through Handy, an online platform for home services such as cleaning and installation. This is a natural extension of their core business, offering services that make the stay more comfortable and convenient for both hosts and guests.
A Holistic Approach to Human Life
What sets Airbnb apart is its holistic approach to human life. Their Open Homes initiative, which offers medical stays, disaster relief, and refugee housing, extends their reach into the Health Life Area. Similarly, Beyond by Airbnb provides luxury service rental holiday apartments, adding another layer to the Recreation Life Area.
Airbnb has successfully ecosystemized its business by addressing multiple Life Areas and effectively playing the roles of Orchestrator, Realizer, and Enabler where it is beneficial. By focusing on the Life Areas of Recreation & Living, Socialize, and Education & Entertainment, Airbnb has created a robust and thriving ecosystem that offers immense value to both hosts and guests. The Ecosystem Strategy Map helps to understand how Airbnb has been able to create a sustainable and profitable ecosystem that caters to various human needs across different Life Areas.
Here are the key learnings:
- Holistic Customer Focus: Airbnb's ecosystem strategy goes beyond just providing accommodations. It addresses multiple facets of human life, from recreation and work to socializing and even health, making it a one-stop solution for various needs.
- Role Versatility: Airbnb effectively plays the roles of Orchestrator, Realizer, and Enabler across different Life Areas. This versatility allows it to offer a wide range of services and experiences, making it a dominant ecosystem player.
- Strategic Partnerships: Airbnb's collaborations, such as the Avios points program with British Airways and the partnership with SAP Concur, extend its ecosystem reach and make it an integral part of the overall travel experience in selected fields where others are stronger. Thus, Airbnb identifies and onboards partners which complement their own capabilities, create credibility and extend the offering portfolio for their customers.
- Community Building: Platforms like Neighborhood and Discoveries not only enrich the customer experience but also empower local communities, making Airbnb's ecosystem both robust and sustainable.
- Adaptability and Expansion: Airbnb's foray into new services like Handy for home services and OpenHomes for medical stays shows its adaptability and ambition to expand its ecosystem in other growth areas.
All in all, Airbnb is an excellent example of how companies create integrated experiences with an ecosystem. Moreover, Airbnb can serve as a role model and blueprint for established companies. On the one hand, incumbents should observe their competition and identify whether there are players within their markets that act like Airbnb (and then make the decision to either collaborate with or compete against them with appropriate counter strategies). On the other hand, traditional players can use their existing assets and capabilities (like brand, customer access, production facilities etc.) to create integrated offerings by themselves and design ecosystem business models together with partners. No matter which option fits better, there is no excuse to wait any longer to get ready for the ecosystem game.