The global local approach
Airbnb is a marketplace platform that connects travelers with local hosts. The platform enables hosts to offer a variety of accommodations to travelers, ranging from a private room within a household to entire homes, and even more unique stays including houseboats, teepees, and “glamping” setups. More recently, the platform has added “experiences” to its marketplace, enabling travelers to connect with tour guides, outdoor activity operators, chefs, and other providers of unique experiences. The company was founded as “AirBedandBreakfast.com” in 2008 by friends Brian Chesky, Joe Gebbia, and Nate Blecharczyk. The original concept was to enable residents to take advantage of unused space in their apartment to host travelers on airbeds. Brian Chesky and Joe Gebbia were the very first hosts to list availability on the platform, providing basic lodging to conference goers in San Francisco for $80/night. From the company’s humble beginnings in California, the platform has expanded to over 4 million hosts in over 34,000 cities and 190 countries globally. In the context of international strategy, Airbnb is a unique company to examine for a number of reasons:
Ultimately, the company has executed on these factors in an extremely successful way, growing from a three-man startup to a publicly traded company with over 14,000 employees and an enterprise value of over $100B in just 13 years. (See Pitchbook Data exhibited below)
We will explore how the company has executed and is currently executing on its international strategy through the analysis and review of 5 key strategic elements:
As a travel company, international expansion was always on Airbnb’s roadmap. There are several strategies that Airbnb applies to adapt to disparate markets, all of which are executed with an underlying theme of global + local or “glocal.” This concept is thoughtfully outlined in the below quote from a Forbes article published in 2016:
“The fundamental tension that Airbnb has to solve is bridging this global-local gap. On one hand, there are certain parts of the travel experience that must be applied in all places, like cleanliness standards. Everybody wants freshly laundered sheets. On the other hand, so much of what makes Airbnb stand out from the millions of cookie-cutter hotel rooms you can stay in is the uniqueness of the local experience.” (article)
Being “glocal” means that Airbnb has had to find a way to make their business model scalable, yet unique at the same time. The company has to act as a chameleon in every market in which it operates while simultaneously maintaining its brand, quality of service, and business model. This “platform culture” is inherently focused on international adaptation: while the company accepts and thrives off of the fact that no two stays can be the same, there are also certain measures that can be taken to ensure that quality of stay is not culturally lost in translation. By taking a community-first approach, Airbnb has made a point of connecting with hosts to ensure that the brand guidelines and ethos are shared by all hosts, regardless of location or nationality. As pointed out in a Harvard Business Review article from 2014, The three co-founders make a point of visiting as many locations as possible in order to better understand new markets:
“The three co-founders have consistently visited and stayed at the homes of key hosts around the world, an experience that likely builds significant loyalty.” (article)
Other important examples of adaptation include the platform’s approach to currency. In 2016, when Brazil hosted the Olympics in Rio, Airbnb crafted a strategy to make up for a missed opportunity that the company experienced two years earlier when the country hosted the world cup. In 2014, when Brazil was hosting the world cup, the number of Airbnb listings in Rio alone rose from 800 to 17,000, but only 6% of platform bookings in that window came from Brazilian citizens. This is because Airbnb had not adapted the platform’s payment options to reflect options that Brazilians were familiar with. When the 2016 Olympics came to Rio, Airbnb was ready: the company had built systems to accept Brazilian Credit Cards and the local currency, Brazilian Reais (BRL) as well as a company called Boleto, which allows consumers without credit cards to participate in e-commerce. (fast company article)
As a disruptive platform, Airbnb began international expansion early on. Anyone with accommodations to share and access to the internet is eligible to host, and as such international
listings became prevalent on the platform as early as 2009. In 2009, the company hosted its first international host meetup in Paris (see exhibit above, from Airbnb communications team).
With the prevalence of travel between the company’s home country, the United States, and Europe, European operations were always in the near-term roadmap for Airbnb. When the German venture-builder, Rocket Internet run by the Samwer brothers who were notorious for copying American startups and launching them in Europe, launched Wimdu - an Airbnb knock off, Chesky and his team knew it was time to take the offensive. Airbnb did this by making a small acquisition of another German competitor, called Accoleo, based in Hamburg (techcrunch article). This gave the company its first office and operating team in Europe, and expansion from that point was swift. This micro-acquisition was a good foot in the door, but Airbnb had to move quickly to compete with the Samwer brothers’ clone which had already raised $90M and hired 400 people. Airbnb won this battle for a number of reasons:
“Ultimately Airbnb won because of a better community and better product, but this was the ‘bet the company’ moment. Because of this, Airbnb built out their European team fast — opened 10 offices in 3 months, hired 100’s of people, and the speed of the company picked up dramatically. 1 year later Airbnb was the clear winner.” (Notes from Stanford University’s CS183C taught by Reid Hoffman, John Lilly, and Chris Yeh)
Ultimately, the ethos of “missionaries, not mercenaries” has informed much of Airbnb’s international expansion and market entry. Airbnb does not enter new markets to exploit underutilized assets, it enters new markets to bring the world together.
Marketing a two-sided platform globally is no small task. Airbnb has employed various strategies around branding, use of distinct foreign language and imagery, partnerships, and localized advertising to grow its base of guests and hosts internationally. Slogans like “Belong anywhere”, “One less stranger” and “Live like a local” convey a message of belonging, one of joining a community rather than being a tourist, one of experience rather than passive observation. However, these slogans do not always translate directly, for instance the company had to ditch the “One less stranger” campaign in Germany because the slogan would have translated to “One less foreigner” - a statement that does not mesh well with a company that aims to inspire international travel. The platform also makes a point to provide a “translate” button to consumers browsing listings and interacting with hosts. While the site could use machine learning to automatically translate all copy and correspondences to the native tongue of the browser, showing the consumer that there is an active language barrier to be overcome helps to create context for interaction. (livesalesman article)
From an imagery and storytelling standpoint, Airbnb does a great job of storytelling. The brand writes with reverence of local customs and culture, and personifies destinations with the names of hosts. This has the effect of making foreign destinations and cultures feel familiar to traveling guests.
Airbnb’s relationships with international, national, and local governments has been well-documented. Because the platform has essentially invented a new multi-billion dollar industry that disrupts concepts as fundamental as how people live and travel, the issue of government relations is an ongoing initiative for the company, and one that will never be a closed book. For instance, the company has recently hired or is currently hiring for a number of roles in this domain: Eric Feldman has joined the company to head the US Federal Affairs & International Relations Team. This is an internal lobbying position in which Feldman will represent the interests of Airbnb in Washington, DC on the federal governing level. The position is also tasked with representing the interests of Airbnb on the international scale. (source 1 | source 2)
The company has also had well-documented issues in foreign markets that are not pleased with the negative impact that the platform can have on local hoteliers and real estate prices. In some regions, Airbnb competes with local hoteliers to the point where pricing becomes competitive and local businesses are no longer able to turn a profit. Similarly, if a region is popular on Airbnb, real estate prices can become so inflated that the local community is no longer able to afford new homes in the area. These are clearly issues that international governments are concerned with. Japan nearly outlawed Airbnb in 2018 when antimonopolistic investigations were opened against the company (source 1 | source 2). Airbnb has handled situations such as Japan in 2018 in stride with powerful lobbying and legal efforts, as well as strong on-the-ground presences employing people in many countries. One way that Airbnb has avoided further international conflict is through partnerships with various nations and travel authorities:
By partnering with nations and local groups with an interest in increased tourism, Airbnb effectively positions itself as an ally and a partner in growth, rather than a chaotic disintermediary.
From three friends in San Francisco to over 14,000 employees in 34 offices globally, Airbnb has quickly grown from a small startup to one of the largest internationally-focused businesses in the world. The company’s organizational structure matches its international nature and focus. In major international markets, the company utilizes operating subsidiaries. The company has also regionalized customer support teams and call centers to help support hosts and guests all over the world in their native tongue. Currently the company has offices in the following countries:
While the largest cohort of employees is located in the United States (over 5000). The company has prioritized hiring local teams across its footprint, in roles ranging from customer support to sales and marketing. This focus on international hiring has reinforced Airbnb’s position as an globally minded and globally operating business.
Airbnb has built a successful multinational corporation in little more than a decade. The company has done this by embracing its own marketing language of “[living] like a local” and “[belonging] anywhere.” As a corporation, Airbnb has gone out of its way to be inclusive of all cultures, styles of travel, budgets, and world views. This missionary-like approach to building community, chameleon-like adaptability, and focus on providing value to customers has helped to establish Airbnb as a global superpower.