Overall competitive landscape of short term room rental market in Asia and out side view on digital marketing strategy of airbnb.com

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Feb, 2013
Short term room rental market
view and road ahead for airbnb
in Asia
By: Sharad Gupta

2. 22
Contents
Current situation and competitor
analysis
Key issues and complication
Solutions
Back up

3. Interest in airbnb has risen approximately 3X, while interest in roomorama
declined globally in last one year
*The numbers on the graph reflect how many searches have been done for a particular term, relative to the total number of searches done on Google over time
Source: google trends
Net income after provision*Interest over time *(roomorama)
• Interest in airbnb.com was stable for last six months and now it started rising again globally
• Interest in airbnb roughly rose 3X in 2012 i.e. from 35 to100
Net income after provision*Interest over time *(airbnb)

4. 3X rise in interest resulted in 4X rise in night booked and 2X room listings
in last one year for airbnb
• airbnb’s night booked
has risen 4X in a
year .From 5 million to
10 million in first 6
months of 2012
• airbnb’s room listings
increased by 2X over
last year from 120k to
300k in 2012
Net income after provision*
Nights booked and # of listings globally with airbnb
~2X
~2X
Nights booked over 6
months( in millions)
Source: techcrunch
# of room listings over an year

5. Asian growth in interest is slower than global growth for airbnb
*SG,TH,MY,ID for airbnb and only SG data available for roomorama
Source: google trends
Net income after provision*Interest over last 24 months across globe*(airbnb)
• Interest in airbnb.com rose from 40% to roughly 65% in past 12 moths in Asia
• Interest in airbnb.com rose from 40% to roughly 100% in past 12 months at overall level
Net income after provision*Interest over last 12 months in Asia *(airbnb)

6. airbnb.com has almost doubled(94%) the room listings in Asia in past year
while roomorama.com has grown by roughly 39%
• airbnb room listings
increased by 94% over
last year
• roomorama’s listings
increased by 39% year
Net income after provision*
room listings in Asia*
94%
39%
airbnb
roomorama
*SG,TH,MY,ID,Cambodia and VN
Source: airbnb.com and roomorama.com

7. *% of total traffic contributed by a channel across the globe
Source: similar web
Both companies are pursuing different marketing strategy and huge upside
possible by crafting and executing regional marketing strategy because…
• Direct channel contribute roughly 53% of total traffic indicating strong brand and recall in US
• Search traffic contributes lower in comparison to roomorama
• Social has much higher contribution in site traffic than roomorama but overall still low contribution(6%
+)
• Roomorama seems to be generating much higher traffic through email
• Airbnb uses much wider social networks for generating WOM and awareness
• Roomorama seems to have higher SEO focus
Net income after provision*Channel contribution* (in %) Paid vs. non paid search contribution Social channels contribution (in %)

8. Wide variations in traffic, volume and quality across countries and heavy
dependence on US traffic
• Airbnb traffic flow is
heavily US centric
contributing to roughly
50% overall traffic
• Airbnb.com bounce
rates varies by country
and region so country
specific channel
optimization required
Net income after provision*
Traffic inflow and bounce rates distribution on the website( in %)
Source: similarweb.com
airbnb
roomorama
1

9. Only few cities in asia are showing any significant interest so further gains
possible by city penetration and expansion
• Only few cities are
generating significant
interest/search volume
for the Asian countries.
Net income after provision*
Interest by cities( in %)
Source: Google trends
2

10. 1010
Contents
Current situation and competitor
analysis
Key issues and complication
Solutions
Back up

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External data reveals three key issues for airbnb in asia
2
Sub optimal marketing
strategies and channel
effectiveness at country level
3
Heavy dependence on US traffic
and city level penetration
Appears to be low in Asia
Summary What?
Slower* growth in SEA on both
local demand and supply
compared to rest of the world
1
• 50%+ traffic is originated in US for airbnb
• Asian traffic( site visitors ) from major Asian tourist destinations is
not even in top 5 traffic sources
• Global interest in airbnb risen by 3X in last one year
• Nights booked risen by 4X and listing increased by 2x in last
one year for airbnb
• Asia listings grew by 2X in last one year and interest** risen by
1.7X
• Bounce rates on UK airbnb site is 60%+ while for US its 28%
• Contribution of organic search, referrals and emails in traffic
volume is much higher in roomorama compared to airbnb
* Based on publicly available data but internal data will give more reliable picture
** Interest represents how many searches have been done for a particular term, relative to the total number of searches done on Google over time
Source: google trends

12. 1212
Contents
Current situation and competitor
analysis
Key issues and complication
Solutions
Back up

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Actions
• Launch awareness campaigns via direct display, PRs, blogs and possibly
offline channels
• Mobile advertisement focusing on awareness rather than conversions
• Facebook CPC campaigns for building awareness
• Separate(SEM and direct display) campaigns for travelers and property
owners
Broaden the focus
to include asian
property owners
and travelers
Effective country
specific marketing
strategy
• Optimized budget allocation across channels considering multiple objectives i.e.
awareness vs. conversion
• Affiliate and partnership marketing for reaching out to larger base
• Local language paid SEM campaigns targeted for asian tourists
• Selection of right retargeting digital medium( google retargeting vs. face book
retargeting) to optimize the conversions
Three broad strategic goals needed to be achieved to tackle the three
growth and penetration issues
Source: i3C Analysis
Facilitation of WOM
in SEA through
social media
• Facilitate WOM for airbnb through facebook organic and promote features
• Leverage other social networks (twitter, youtube) and travel focused social
media platform for the region
• Focus on promotion through referral program

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