Airbnb Looks to Improve Quality Options

Since its start in 2008 as a website offering stays on air mattresses Airbnb has had over 300 million overnight visits. It currently has 4.5 million listings in 81,000 cities. The uniqueness of every listing makes Airbnb a very popular choice for a lot of people, but its uniqueness is also its drawback. Customers are often unsure of what kind of place they are staying at and there are a lot of variables that could make their stays unpleasant. This uncertainty causes a large group of potential customers to defer to more consistent options like hotels where they can be reasonably assured of what to expect.

In an attempt to improve the quality of the service they provide and in honor of their tenth anniversary Airbnb has just launched its new brand Airbnb Plus, a new program with listings that are guaranteed to meet 100 criteria that will ensure certain amenities are present and the stay will be as comfortable as possible. This brand is an attempt to capture more of the market of those who expect a certain level of comfort at every place they stay. The new Airbnb Plus rooms have an average cost of $200 as opposed to $100 as the average of their current listings.

This new approach is a smart move for Airbnb. The original listings include 2,000 residences in 13 cities but is expected to grow to 75,000 listings in 50 locations by the end of the year. A similar company called HomeAway released 4,000 luxury rental listings in 2013 and that number has grown to 11,400 listings in 80 countries. Clearly there is a lot of growth potential in the market.

The reason this is a good idea for Airbnb is that it is a step in the right direction for quality control. In order to become a listing on Airbnb Plus a host must first apply and then a local photographer, many of whom are hosts themselves, will stop by and determine if they meet the required standards. These new standards were set by Airbnb after they contacted and interviewed several hundred of their top-ranked hosts and found what it was that gave their homes better ratings.

This technique of interviewing those who customers deemed the best was a very intelligent choice. Quality is dictated by the customer and Airbnb has recognized that. The quality Airbnb is striving for is consistency. They want to offer customers a set of listings that are each still unique but that take away a lot of the uncertainty associated with the majority of their current listings.

Going forward Airbnb is not settling with Airbnb Plus as their new pinnacle of quality. In the future Airbnb is planning to release a number of luxury listings under the brand of Beyond by Airbnb. This shows that Airbnb is focused on continuous quality improvement, similar to the ideas of kaizen. It is important that Airbnb doesn’t simply settle during their quest for quality with just these new brands. It is important that they still focus on their cheaper more variable listings and continue to improve those as well. If they slack on quality for those listings they could lose a large portion of their customers looking for cheaper stays that still want a certain level of quality.

Going forward it is clear Airbnb is on the right path but with so much variability in their 4.5 million listings it will take time for Airbnb to fully weed out listings of poor quality. As a result, they must continue to focus on their total quality management.

 

https://global.factiva.com/redir/default.aspx?P=sa&an=NYTF000020180304ee340004r&cat=a&ep=ASE

12 thoughts on “Airbnb Looks to Improve Quality Options

  • March 7, 2018 at 2:11 pm
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    Your post was very interesting to me due to my recent experiences with Airbnb. Many of my friends have been using Airbnb to find places to stay during vacations because they are usually a cheap alternative to hotels, and usually the listings are of moderate quality. I have always thought this was a good business model, but for the longest time I was very skeptical to use Airbnb. To me, finding a stranger online seemed a lot less trust worthy than booking a hotel room from a well-known hotel corporation. In the past six months, I have used Airbnb’s services twice and was very pleased both times. I think it is a great idea for Airbnb to pursue guarantees within their quality control, as this is most likely the main drawback consumers have when considering Airbnb’s services. I think in some ways Airbnb is very similar to Uber. With Uber, riders are trusting a random driver that is not employed by a taxi service who is driving their personally car. Similarly do Airbnb, Uber customers are often skeptical of the quality they receive. Uber’s struggles with quality control have been widely publicized and have hurt their business, which opened the door for other ride sharing services. It seems that Airbnb is learning from Uber, and realizing that quality control is their greatest threat; they are solving a potential issue before it has the chance to keep them from expanding to a dominant company in the industry.

    • March 7, 2018 at 7:33 pm
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      Michael brings up a very interesting point regarding the similarities and differences between Uber and Airbnb. Clearly, Uber has experienced tremendous issues with their quality of service and even presented conflicts with ethical dilemmas. Due to these issues, Uber continues to face scrutiny and constantly has to adapt their business strategy to meet more ethical standards. Uber recently underwent their “180 days of change” process, where they attempted to correct some of the firm’s biggest and most hindering flaws. However, the screening process was not severely altered and Uber drivers can be created in just under 15 minutes while sitting in your own home. When you think of it, Airbnb provides a very similar service to Uber. Hosts can register their home easily with little to no screening process at all. Airbnb ensures its consistency through photographers that check the home and share photos. I am intrigued that the service does not offer intense regulated security and background check on its hosts. Nevertheless, as quality of Airbnb clearly seems to be headed in the right direction, the firm looks to be in solid light. I am still interested in seeing how the security aspect plays out as the service increases in popularity, it should be an intriguing aspect to follow.

  • March 7, 2018 at 3:24 pm
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    I agree, Airbnb’s unique offering also has the potential to hinder the company. Because of Airbnb’s diverse offering to the consumer, maintain quality control can be very difficult. This is because quality is based by each consumer and how well the product or service performs in comparison to the consumer’s expectations. From further research conducted, a NY Times article states that “Airbnb’s lack of quality control has at times been problematic for the company” hindering their bottom line. Because Airbnb offers a product with different varieties of quality, some consumer may shy away and choose a safer option instead. This is because a consumer’s order winner may be consistently high quality, rather than Airbnb’s more “individualized approach” (NY TIMES).

    Airbnb Plus strives reduce some of this uncertainty pertaining to quality. Brian Chesky, Airbnb’s Chief Executive, states “Some travelers want predictability and certain comforts, and Airbnb Plus will give them these” (NY TIMES). By diversifying their offering, Airbnb is able to increase their consumer base because of the advancement of their competitive advantage in the marketplace.

    Airbnb’s release of Airbnb Plus and eventual release of Beyond by Airbnb is a great solution to issues regarding the company’s total quality management. The company is showing its customers that they are working towards continuous improvement of their offerings. Airbnb has realized the value in providing a more consistent experience to their customers while still maintaining their uniqueness. Extending their customer offerings, I believe, will allow the company to continue its success into the future.

    https://www.nytimes.com/2018/02/22/travel/new-airbnb-plus.html

  • March 7, 2018 at 5:21 pm
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    I agree that this is a very smart move by Airbnb. By adding these options, that offer higher quality, it is unlikely that their current sales will be negatively affected, but they will gain the ability to reach a wider audience. While the vast majority of Airbnb listings are accurately advertised the occasional horror story is enough to dissuade some travelers who are looking for more consistency. The article below describes on such situation and the response that was required of Airbnb. The author seemed to be unhappy that Airbnb had not immediately refunded a guest who claimed to have a bad experience. Airbnb on the other hand maintained that they were following their policy on refunds. In the end a full refund was issued after the Airbnb user took to twitter to complain about the experience. This highlights the negative effects of poor quality management. Because one listing was not up to a sufficient standard of quality the whole company suffered due to the negative publicity. As you described if the company continues to move forward with higher quality options they must not lose sight of their main operation.
    https://www.inc.com/sonya-mann/airbnb-nightmare-experiences.html

  • March 7, 2018 at 6:15 pm
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    The initial reason that Airbnb gained popularity and extracted business from hotels or motels, was the price factor. Hotels cannot compete with a business that does not have to provide their customers with a certain accustomed service that someone expects with hotels. Airbnb’s determination toward Airbnb Plus and in the future beyond by Airbnb has the possibility to weaken the listings of locations that meet the original listing price that was so attractive to customers. The company has decided to meet a new demographic of customers, instead of ensure that their current locations were more suitable for their customers. I wonder that with the new quality standards for the more pricey locations on Airbnb Plus will lower the quality of locations that meet the standards of Regular Airbnb. The other factor that Airbnb is not able to match when it comes to quality, is the sense of security that one feels when they are staying at a hotel or Motel. The safety you feel going to sleep in a room that is locked at your control cannot be matched by the service that Airbnb locations can offer. With this in mind, I do think there is a Horizon of how far Airbnb can compete with the more secure housing options.

    https://www.airbnb.com/trust

  • March 7, 2018 at 7:48 pm
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    This article is very topical right now, especially with people our age. While reading I asked myself, as people get older do they trust an outlet like Airbnb less? People in older generations couldn’t fathom walking into a random person’s house and stay there. There has been growth in trusting strangers over the years. I think that has to do with the transparency caused by the ever-growing presence of social media.

    With the new Airbnb plus, will there be an increase in customers of older age? As you said, Brandon, it gives the mystery of living in a stranger’s house a little certainty. The rating certification is crucial in acquiring a new customer base. Having the hosts rate other hosts generates a good rating system. Because if a host sees something wrong with another hosts (or their competitor’s) accommodations, they won’t be afraid to voice their opinion. I feel like they were stuck in a niche market, and they needed to expand. Because the prices, space, convenience of Airbnb is unmatched among competitors.

    The quality control is the biggest factor, as you mentioned, Brandon. It’s important for a company like Airbnb and Craigslist to assure customer satisfaction. They are trusting a stranger to give them the quality they look for in competitors, but for a much lower price. Some people are very reluctant to try services like these, but adding a premium level of quality is a step in the right direction.

  • March 7, 2018 at 10:27 pm
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    I agree with everyone in saying this was a great idea by Airbnb. I use Airbnb as a cheaper and easier alternative to hotels, but as the Airbnb becomes more popular and they improve their quality, I barely see a difference in pricing with hotels. Airbnb now charges more to stay at a location on the weekends, just like a hotel. Now the level of safety and quality are at the same level as hotels. At this point, what is the difference. As Airbnb works to improve its quality strategy, I beg that they continue to purvey their cost strategy of low costs, but good quality. I wonder what is going to happen to the lower quality listings that people purchase just for a night or two. In my opinion, the brand of Airbnb is widely ranged; it is both luxury and high quality, but it is also lower quality, cheap, and flexible options. I hope this aspect of Airbnb does not disappear.

  • March 8, 2018 at 12:12 am
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    The new pricing strategy is meant to cut down on quality management costs by minimizing the number of certified listed host sites. This move does not eliminate all of the AirBnB sites for consumers that do not care about the extra amenities and will settle for the original prices. The extra premium that customers pay to stay in an AirBnB plush will increase revenue from customers that would already use AirBnB and will attract sales form customers that now believe AirBnB has become a safer alternative to hotels. Getting employees involved in the quality management process was a smart move by AirBnB. By observing the quality of the highest rated host sites, AirBnB’s management team was able to get a better picture for what AirBnB customers look for in a room. AirBnB hires professional photographers that are trained to inspect the new plus sites. The new strategy also classifies rooms into classes which is helpful since customers can become overwhelmed by the abundant variety in host sites. To help offset the cost of home inspections and professional photography, Airbnb is charging hosts $149 to apply for the Plus designation. Hosts will be listed more prominently on Airbnb’s site and could potentially charge more for their certified homes https://www.wsj.com/articles/airbnb-adds-hotels-and-luxury-listings-to-bolster-growth-1519325934.

  • March 8, 2018 at 8:07 am
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    This push for increased quality and consistency with AirBnB stays is overall a good move for a company. As a veteran of many AirBnB stays it can be hit or miss with what to expect from each different location. However one of the main factors that is what has led AirBnB to become such a large success in the travel industry is its attractive price points over traditional hotels. The quality, while a certain low level was expected, was never the main reason one would rent an AirBnB. However this shift could be good for the company as now they can officially move to challenge hotels and their market share around the world with more homes and apartments becoming of consistent high quality with certain amenities to expect. This allows different generations, with people such as my parents who are more conservative and never think about an AirBnB before to now consider it due to its price point and attractive offerings. However I believe it would be a mistake to lose sight of that market that allowed them to become so huge, which was affordable stays in peoples homes around the world. While this will allow them to grow their market share into different product offerings they must hang onto the market they currently dominate.

    • March 8, 2018 at 8:41 am
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      I completely agree with Blake that it would be beneficial for Airbnb to increase quality and consistency of their locations. I feel that a company like this, or say an Uber, only works if they have the trust of their customer base. For instance, if I have one really, really bad Uber ride, I might never use the service again. Likewise, if I have one terrible stay using an Airbnb location and it ruins my trip somewhere, I might resort to Airbnb as my last option overtime moving forward. Also, in such a digital and global age, one person’s bad experience can be shared so quickly with the general public. Therefore, it is essential that Airbnb maintains the trust of their customers. I feel that increased consistency and quality will absolutely help with trust.

      In addition, I agree with Blake that it is important that Airbnb still offers inexpensive, less nice locations for people the stay. If the company can figure out how to create a balanced process with both types of locations, I feel that they will be extremely successful and take over market share.

  • March 8, 2018 at 8:42 am
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    I agree with everyone else; this is an extremely significant move on Airbnb’s part. Speaking from past experience, I feel like Airbnb has done a good job at keeping up customer relations, and this can only improve that. I had purchased an Airbnb for a night while I was staying in Spain, and day before I was scheduled to check in, the owner of the apartment informed me that the plumbing wasn’t working and I wouldn’t be able to stay. The whole situation was very suspicious, and after unsuccessfully trying to get in contact with the owner multiple times, I was worried I wouldn’t get a refund. However, I contacted Airbnb, and they refunded me within the day along with offering me a discount for a future stay. I think these changes in creating tiers to the types of places Airbnb offers will not only increase reassurance in their customers that they will be staying in a safe and sanitary location, but will also put further pressure on the hotel industry. Hotels will have to find other ways to distinguish themselves in hopes of retaining customers, as with these implementations coupled with cheaper prices and greater growth in more and more areas in the world, it will become harder for potential customers not to choose Airbnb. Nonetheless, I am interested to see how these efforts in quality control work out for Airbnb in the years to come.

  • March 8, 2018 at 3:12 pm
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    Hearing about the new quality category that Airbnb has established is very interesting. I stayed in an Airbnb one time in my life, when I was with a group of friends on a ski trip in Colorado. I had a very positive experience and the loft was exactly as described. This idea is definitely a step in the right direction, especially since Airbnb are asking the hosts themselves what they have done for better ratings. The only better option could have been asking their customers, instead of hosts, for these categories. I think it is a very good idea for Airbnb to create this new category and then to also add the Beyond category. This segments their market very well. Through this they can target their marketing efforts on certain niches of customers. Since there will be multiple categories, this will also lead to less customers being disappointed, because the hosts should be audited to live up to their quality threshold. This strategy can help reduce disappointment on the side of the customers; I am curious what steps Airbnb will continue to implement in order to keep their owners happy. Their have been numerous articles about renters trashing their Airbnb’s and it leads me to wonder if the owners will get fed up and not want to continue using their services.

    https://www.wcpo.com/money/consumer/dont-waste-your-money/airbnb-nightmare-mans-home-trashed-by-renters

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