Analysis: UX Could Become Airbnb's Achilles' Heel

airbnb user experience

In just 7 years, Chesky and team have built up a $25 billion company doing one thing, and one thing right – home stays. Emboldened by deep pockets and an urgency to diversify, Airbnb has now begun the journey away from its core service offering. But heated legal battles in markets like New York and San Francisco  still rage on. Once the regulatory dust settles, a new landscape will deteriorate the company's first mover advantage. On a more equal playing field, creating new services, experiences, and inventory streams will become a matter of necessity. In this environment, the fight between Airbnb and other rising players in alternative accommodations will circle back to user experience.

Airbnb didn't invent the sharing economy, but they took it to scale thanks to a revolutionary concept and awesome user experience for both guests and hosts. Much of the brand’s rapid successes have rested on their clean and easy-to-use digital platform, particularly its mobile app. 

It takes about 5 minutes to publish your apartment or home with just a few clicks and swipes of your smartphone. So easy, in fact, that Airbnb now has over 2 million listings in over 190 countries. Starwood Hotels, across all of its brands, has just over 350,000 rooms.

This user-generated inventory strategy has been central to Airbnb’s success; great UX got it there. Easy calendar updates, verification and guest vetting functionality, payment integration, rate adjustments, and other features makes the listing process a snap.

The same goes for the guest experience. Great mapping, property profile pages, guest reviews, host guidebooks, and other features give travelers access to the information needed to make informed choices. Sure, there are duds out there but with a trained Airbnb user eye, and knowing what to look for, you get pretty good at using the app's tools to weed out the bad apples.

Plus it’s more than just the features. The customer journey and interaction with the Airbnb platform has created some very happy customers that keep coming back.

Next Steps Will Prove Critical

Seven years into it and Airbnb is ready to do more. They've recently started experimenting with their Journeys product, a curated list of in-destination activities. There are also predictions floating around that Airbnb will move towards a more traditional online travel agency (OTA) model, listing alternative accommodations and traditional hotel inventory.

Two words of caution here: Coca Cola.

Airbnb's desire (and need) to tweak it’s winning formula comes from different directions. The obvious one: They have the cash to dig for new revenue streams and value added services. But the company’s successes hide the fact that Airbnb is actually getting squeezed.

Not All Hunky Dory

Airbnb's ongoing legal battles with state and local governments are still a cause for concern. A New York City Council bill is in play that threatens to fine hosts up to 50,000 dollars for home sharing. San Francisco law requires hosts to register with the city but very few do. The impact that Airbnb is having on rents and home prices is yet another big issue.

All of this is making the hosts – Airbnb’s bread and butter - nervous. Many (if not most) are breaking some local laws and feeling guilty about it. There's also a certain stigma attached to admitting to friends and family that you’re a lawbreaker, and that strangers stay at your place.

While home sharing probably won't get banned outright, regulators and the taxman are obviously NOT happy. The slow pace of government hasn’t been able to keep up with the rampant spread of Airbnb. But make no mistake, Airbnb will remain a big target for hotel lobbyists and fiscal regulators the world over. When the law catches up to the sharing economy, it will likely translate into additional fees and tax obligations for hosts.

Value for Money, at tipping point?

More fees and taxes is serious because a key ingredient to Airbnb’s secret sauce has been value for money. For the same price as a traditional hotel, you get a kitchen, free wifi, and access to some of the best neighborhoods in world. As much as hotels hate to admit, there's a big gap there. 

But all of this might soon change. A more structured regulatory environment will leave Airbnb exposed to its biggest competitor - traditional hotels. If the value to cost formula swings back in favor of traditional hotels, then Airbnb could face issues.

Success will Circle back to Great User Experience

Other players have their sights set on the massive home sharing market. Homeaway and Flipkey are out there. Priceline is cautiously but steadily moving into the space. Once all of the legalities are settled, it's open season on Airbnb. Longer term, diversification will become imperative for the company; future success will ultimately circle back to user experience as Airbnb goes head-to-head with its competitors.

The team will need to play smart about tweaking the original Airbnb experience, as they look for new (and significant) sources of revenue. Amazon’s recent misadventures in the travel space has shown how tricky traditional hotel integration can be. Mixing APIs with different services and inventory types will become a monumental task for Airbnb.  Not impossible, but caution to the wind.

In the end, clean user experience and ease of use got the entire world hooked on Airbnb. Now that they have our very much earned attention, it will be up to them to keep it.