Yahoo Finance Airbnb’s CFO on What Went Wrong With Experiences – and What the Fixes Are
Airbnb hasn’t been vocal about its strategy for experiences since it paused adding new ones last year or even a couple of weeks ago when it confirmed it has been removing some experiences providers from its platform.
But Airbnb Chief Financial Officer Ellie Mertz said Thursday at a Bernstein conference that the company is reinvesting in adjacent products — she had been talking about experiences and hotels. And Mertz discussed some of the company’s learnings about why its experiences product hadn’t taken off as planned.
Asked by moderator Richard Clarke of Bernstein why Airbnb experiences “hasn’t quite worked so far,” Mertz said “everyone” in travel wants to get their customers to book the whole suite of end-to-end travel products, presumably flights, lodging, cars and experiences.
“And what makes that challenging is that outside of packaged tour travel, consumers don’t go to one site and book everything all at the same time,” Mertz said.
Actually, she said, travelers have “a delayed stage purchasing pattern, meaning you get your transportation and then your accommodations, and then closer to the trip, you get activities and services etc…”
“So part of making a build out — I don’t want to say connected trip because someone else uses that — but part of increasing the offering is, How do you merchandise to the consumer at the right time to make it useful for them?”
So like Booking.com boss Glenn Fogel, who has touted a connected trip strategy in recent years, Airbnb wants to become more effective in getting its customers to book both accommodations and experiences on the platform.
But Airbnb knows many guests likely won’t book experiences at the same time they make a reservation for a stay.
The Secret Sauce for Experiences
The secret sauce is figuring out how and when to do it, according to Mertz’s logic.
ln addition to the proper timing, Mertz said Airbnb needs to ensure that experiences are “appropriately priced.”
A third element to a successful experiences product would be personalization, she said.
It’s “knowing something about the consumers such that you are not just barraging them with everything that’s available in a particular market but merchandising to them the things that they would enjoy and are relevant to them, but also the travel use case that they are about to go on,” she said.
Metz said Airbnb will apply these learnings as “we restart those expansion opportunities.”
The company may have restarted its experiences a tad with its recent launch of Airbnb Icons, which is a series of high-profile celebrity- and show-business oriented stays and experiences available to a limited number of Airbnb customers.
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