Airbnb and the Millennial

The millennial shopping patterns are becoming increasingly important for companies to understand and capitalize on as millennials become more and more dominant consumers. According to an Airbnb citizen article, “Millennials are the largest generation in history, and by 2025, millennials and younger generations will account for 75% of all consumers and travelers.” This projected proportion shows the imminent millennial take over of the market economy and how necessary it is for companies to pivot to Millennial trends. As we learned in class presentations last week, @sydneywalker511 touched on the millennial shopping trends and the emphasis on experience and quality over material goods and brand name. Millennials are shifting the market in a unprecedented way, and companies are scrambling to accommodate their new demographic segment for fear of falling behind.

Born out of a novel idea by millennials themselves, A company that I believe has done an impeccable job with capitalizing on the millennial market based on the millennial values and trends we have seen come to fruition over the course of the past few years is Airbnb. We all know the genesis of Airbnb from past assignments and pop-culture, but Airbnb’s success should be spoken of in relation to their practically perfect encapsulation of millennial virtues. Airbnb’s business model was either very lucky or very strategic (or both!) as it reflects the values of consumers today. Airbnb capitalizes on the emerging trend of a sharing economy that is utilized by many, especially millennials. In addition to the propensity to participate in a sharing economy, millennials care incredibly about traveling, specially in china, to the extent that paying off debt or long-term investments fall short according to a 2016 Airbnb report:

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While this statistic could be seen as disheartening to the financially responsible, millennials with these values would argue that experiential learning through travel is one of the most important things you can do as a young adult; they state that “travel is an important part of who I am as a person.”

With the emphasis of travel importance, Airbnb presents the perfect platform of providing all types of travel and experiences for the millennial budget, which shows itself in the statistic that roughly 60% of all of Airbnb’s customers fall into the millennial demographic. In addition, the number of millennials that book on Airbnb has grown over 120% in the past year.

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This Airbnb gif is a great representation of the huge influx of consumers that Airbnb has been able to capture. With a constant Airbnb’s introduction of “Airbnb Experience” shows their keen awareness of both their niche and their consumer’s values. Airbnb has become not only a replacement for a hotel room but also a concierge, as they provide a platform for their consumers to take full advantage of the fact they are staying in rooms provided by locals who understand the community and culture they are trying to learn of. Introduced in 2014, Experiences enhanced the Airbnb network as it is no longer a simple two-sided network, but a multi-service provider and connector of people. Although Experiences has been around for a few years, it is still being talked about as its adoption and use is increasing. Earlier this year, Forbes posted an article 13 Airbnb Experiences Changing The Way You Explore A City. (https://www.forbes.com/sites/breannawilson/2017/04/26/hiking-with-wolves-to-writing-tv-these-airbnb-experiences-are-changing-the-way-you-explore-a-city/#7c94710514fd). The list of experiences ranges from visiting breweries to hiking with wolves, Airbnb’s revolutionary way of providing crazy new experiences is still the topic of much conversation, suggesting a consistent prevalence of Airbnb experiences. Even on the Airbnb Website, the word “experience” stands out as a key buzzword that Airbnb uses. From marketing Airbnb as a way to experience the city like a local, to emphasizing the opportunity for investing in experiences as the first option on the website, Airbnb knows its niche and how to target to the millennial value of experience.

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On my Airbnb account, very unique experience pop up as recommended for me, from bike riding to meeting a funny museum guy, Airbnb provides a myriad of different experiences targeted towards its consumers’ preferences. Millennial consumer preferences are perfectly catered to with this business model of participating in a sharing economy, providing experience, and valuing authenticity. As more and more companies target the growing millennial consumer base, it will be incredibly interesting to see what values they cater to and how their business model works to reflect such values. As I see it, Airbnb is a great company to model off.

7 comments

  1. I agree that Airbnb has really capitalized on millennial habits and shopping preferences. With the growth of the sharing economy, millennials are much more likely than any previous generations to share their homes with complete strangers. Our perceptions of trust and how normal it is to trust others has changed dramatically over the past few years; as shown in the video, without this trust Airbnb literally could not exist. I wonder if platforms will continue to be popular with up-and-coming generations like Generation Z or if we will shift against the sharing economy.

  2. Airbnb’s model has always fascinated me. What once was such a foreign concept is now increasingly common and widely accepted. I have never used Airbnb before, but I like how it includes possible experiences that one could partake in near their room/house..it’s kind of like a built-in concierge! I agree with you that Airbnb is a great company to model off of, but I, like Claire, wonder if it is sustainable.

  3. I would definitely agree that Airbnb is enjoying massive success due to the fact that it offers an experience. It’s simply impossible for hotel chains to set up in every location, and this is a big advantage that Airbnb has. I think another major advantage it has over hotels is that it allows you to see how people live, city by city. One of my coolest Airbnb experiences, in terms of apartments, was in Venice. The floor of the living room was glass, and under it was an old 15th century well they discovered while building. This is a prime authentic experience you’d be hard pressed to find in a hotel.

  4. It’s definitely interesting seeing the statistics you shared about what millennials are saving for. I was not surprised to see travel as number one. This means that as more young people travel they are going to do it on a budget more so than people who are more established in their careers might. This leads to success of companies like Airbnb. They offer a large range of prices and unique experiences all over the world. Millennials love finding “undiscovered” and “unique” places and Airbnb lends themselves nicely to this.

  5. With such a focus on Millennials, I’m interested to see how they will adapt in the future to Generation Z, the next demographic cohort after the Millennials. With their earliest memories being of 9/11 and growing up during the financial crisis of 2008, Generation Z’ers tend to be more conservative when it comes to spending so I wonder if the low-cost aspect of Airbnb’s value proposition will be more valuable to them than experiences.

  6. Travel is becoming increasingly more important for people. I think this trend is going to continue, thus I believe that Airbnb will continue to expand. I think that they should continue to take steps to improve the experience and add more features. This will increase people’s experience, which will result in more people coming back once they use it. Personally, I did not love my experience with Airbnb when I was abroad. Some of the Airbnbs we stayed in were great, but others were not. Thus, in the future, I think that I will stay in hotels just because of the inconsistency with Airbnbs.

  7. I used Airbnb a ton abroad and one of my favorite ways to take advantage of its features was to ask my host for recommendations of restaurants, sightseeing opportunities, activities, etc. Each host I asked was always more than willing to send me long paragraphs of recommendations and I knew they would be local and authentic. I was not really aware of the Experience feature, but I think this is a great way to further connect hosts and Airbnb users. I agree that Airbnb has done a really, really good job catering to millennials, particularly their itch to travel and their budgets.

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