Skip to content
dil-8OECtq8rrNg-unsplash

Shaping the Airbnb Experience: How platform executives manage their service providers

05 October 2021| doi: 10.5281/zenodo.5530171

Have you ever noticed that Airbnb stays tend to resemble each other quite a bit, regardless of whether you are staying in, say, London or Lisbon? If so, this is no coincidence. In this blog post, I describe the strategies and tactics which platforms such as Airbnb use to manage service providers in the sharing economy and create distinctive customer experiences.

But let’s start from the beginning. Sharing economy platforms such as Airbnb and Uber coordinate exchanges between service providers and consumers. The service providers (e.g., Airbnb hosts) control most of the customer experience. Consider Airbnb: From setting up the flat to communicating with you throughout the booking process and giving you local recommendations, a good host is essential to Airbnb’s business model. But compared to traditional employers, platforms have little control over the service the providers offer. There is, for example, no formal training which service providers have to go through. And yet, successful sharing economy platforms such as Airbnb and Uber have managed to create distinctive customer experiences and to differentiate themselves from other brands in the market.

A strangely familiar aesthetic

To take a closer look at this experience, let’s stay with the Airbnb example. If you have stayed in more than one Airbnb in your life, you have probably noticed that Airbnb stays tend to resemble each other quite a bit. First, there is the routine from the warm welcome to the recommendations hosts give for things to do in the area. Then, there are the accommodations themselves. A few years ago, Kyle Chayka coined the term AirSpace for the phenomenon that hip coffee places, restaurants and Airbnb listings increasingly resemble each other around the world. The spread of the Airbnb aesthetic means that you get a strangely similar vibe regardless of whether you are staying in an apartment in Berlin or Buenos Aires. 

Scientific studies support this notion that Airbnb experiences resemble each other. They also show that Airbnb’s leadership has been highly successful in turning the desired customer experience into reality (e.g., Brochado et al., 2017; von Richthofen & Fischer, 2019). Brochado et al. (2017), for example, analyzed large quantities of Airbnb reviews and found evidence of convergence of the customer experience across India, Portugal, and the US. In all three countries, for example, the (friendly) host was referred to as a central aspect of the Airbnb experience. From a marketing perspective, this raises an important question: How did Airbnb manage to shape the Airbnb experience? How did its leaders influence hosts to provide a certain kind of experience to guests, despite the legal and logistical constraints they face in doing so? 

Strategies for managing service providers in the sharing economy

In a recent article, my co-author Florian von Wangenheim and I explored this question in depth. Specifically, we used Airbnb as a context to study more generally how platform leaders can align the services the providers offer with the customer experience they desire to create. Examining multiple sources of archival data, we found that Airbnb uses three distinct strategies to manage hosts, which we refer to as (1) orienting, (2) enabling, and (3) incentivizing and controlling. Each strategy, in turn, corresponds to three distinct tactics. In what follows, I will briefly describe each strategy and tactic in a bit more detail.

1. Orientation

First, Airbnb uses three tactics to provide orientation to hosts, namely, exemplifying, mythologizing, and valorizing. Exemplifying implies that Airbnb illustrates the desired customer experience, for example, in advertisements, social media posts, and press interviews. Mythologizing implies communicating values and norms through stylized stories about the platform’s history. Airbnb’s founders frequently share their story of how they hosted their first guests in San Francisco to communicate the value of hospitality and the norm that hosts should provide guests a local experience. Valorizing involves that Airbnb singles out exemplary service providers. The company even organized award ceremonies that it recorded and uploaded on YouTube.  

2. Enabling

Enabling involves providing resources and support to service providers, by circulating best practices, providing tools, and orchestrating peer-to-peer education. Circulating best practices involves gathering “best practices from both experts and service providers in the platform market and disseminating them through the platform’s communication channels” (von Richthofen & von Wangenheim, 2021, p.770). For example, there are blog posts wherein designers teach hosts to “show personality” and paint their front door in an unexpected color. Moreover, Airbnb orchestrates peer-to-peer education, which involves that the platform encourages and provides the infrastructure needed so that hosts can educate each other. Third, Airbnb equips hosts with several tools which facilitate service provision such as sending them photographers to take high-quality pictures. 

3. Incentivizing and controlling

Incentivizing and controlling means exerting a directing influence over providers, using algorithmic management, peer and formal control. Algorithmic management is a (controversial) practice that involves the use of algorithms to manage remote workforces by tracking and evaluating workers’ performance and automatically implementing decisions (Möhlmann & Zalmanson, 2017). For example, Airbnb measures metrics such as how long hosts take to respond to inquiries and uses these metrics to determine hosts’ ranking in the search results, which in turn determines hosts’ likelihood of receiving bookings. In addition, Airbnb uses peer control mechanisms such as ratings and reviews and increasingly also adopts more formal control practices.  

Summary: Striking a balance between control and more soft ways of influence

Collectively, the aforementioned strategies and tactics enabled Airbnb to shape a distinctive customer experience and to establish itself as a lifestyle brand in the travel sector. What can the leaders of other platforms learn from this? One key insight is that using incentive and control mechanisms alone may be insufficient when it comes to managing service providers in the sharing economy, given that many service providers are part-timers, who are not exclusively motivated by money alone. Adopting overly rigid incentive and control mechanisms, therefore, risks to repel service providers who are primarily motivated by the social benefits of the sharing economy. Instead, platforms should strive to find the right balance between incentivizing and controlling as well as more soft ways of influence, including providing orientation to and enabling service providers. What this balance should precisely look like ultimately depends on the sector. In labor intensive markets such as ride hailing with a large workforce, platforms will likely focus more on incentivizing and controlling service providers. In nascent sectors of the sharing economy such as meal-sharing, in contrast, platforms should initially focus relatively more on providing orientation to and enabling service providers. In both cases, however, platform leaders may benefit from thinking beyond ratings and reviews when it comes to managing service providers in the sharing economy.    


References

Brochado, A., Troilo, M., & Shah, A. (2017, 2017/03/01/). Airbnb customer experience: Evidence of convergence across three countries. Annals of Tourism Research, 63, 210-212.

Möhlmann, M., & Zalmanson, L. (2017). Hands on the wheel: Navigating algorithmic management and Uber drivers’. 38th ICIS Proceedings.

von Richthofen, G., & Fischer, E. (2019). Airbnb and hybridized logics of commerce and hospitality. In Russell W. Belk, G. M. Eckhardt, & F. Bardhi (Eds.), Handbook of the Sharing Economy (pp. 193-207). Edward Elgar Publishing Limited.
von Richthofen, G., & von Wangenheim, F. (2021). Managing service providers in the sharing economy: Insights from Airbnb’s host management. Journal of Business Research, 134, 765-777.

This post represents the view of the author and does not necessarily represent the view of the institute itself. For more information about the topics of these articles and associated research projects, please contact info@hiig.de.

Georg von Richthofen, Dr.

Senior Researcher & Project Lead: Innovation, Entrepreneurship & Society

Sign up for HIIG's Monthly Digest

and receive our latest blog articles.

Man sieht in Leuchtschrift das Wort "Ethical"

Digital Ethics

Whether civil society, politics or science – everyone seems to agree that the New Twenties will be characterised by digitalisation. But what about the tension of digital ethics? How do we create a digital transformation involving society as a whole, including people who either do not have the financial means or the necessary know-how to benefit from digitalisation?  And what do these comprehensive changes in our actions mean for democracy? In this dossier we want to address these questions and offer food for thought on how we can use digitalisation for the common good.

Discover all 11 articles

Further articles

Person in wheelchair taking photos outside

Exploiting potentials: Teaching AI Systems to See Accessibility Barriers

Barriers in our physical environment are still widespread. While AI systems could eventually support detecting them, it first needs open training data. Here we provide a dataset for detecting steps...

You can see a group of people from above doing lessons online. It symoblises digital teaching/digitale Lehre.

Sharing knowledge: Impact of Covid-19 on digital teaching

How can we address the many inequalities in access to digital resources and lack of digital skills that were revealed by the COVID-19 pandemic?

Titelbild Blogbeitrag Explainable AI

Explaining AI – How to explain the unexplainable?

Complex automated decision making systems have become ubiquitous in our everyday lives. Should we even care to understand how AI-based decisions are made?