Originally published 9/14/22; Updated [NEW DATE]
Travel has changed. The way people travel, why they travel, and the experiences they seek have become much more personalized. Global events have significantly altered the travel landscape, intensifying the demand for more personalized and flexible travel options. As destinations adapt by focusing on authentic, high-value experiences over sheer visitor numbers, travel operators must pivot swiftly to meet these evolving expectations. A pioneer in this shift is Airbnb, known for its innovative approach to customer experience (CX), which has been central to its success.
Destinations, too, are changing their approach to welcoming travelers, with many opting for lower visitor volume, managed visitor impact, and authentic high-value experiences over maximizing visitor numbers. Travel operators eager to make the most of pent-up demand are having to quickly adapt to these trends, attract bookings, and be able to deliver on these new emerging customer expectations. A company known for being a disruptor and doing things differently is Airbnb. They’re one of the biggest global competitors in travel and have achieved unprecedented success with their unique business model.
As travel operators adapt to these changing expectations, focusing on strategies that increase customer spend and satisfaction is crucial. For an in-depth exploration of such strategies, read our guide on 8 Best Practices for Optimizing Average Order Value in 2024.
The broader travel industry doesn’t need to emulate this model to take advantage of the rebound in travel. Still, there is an opportunity to learn from Airbnb's approach to customer experience (CX) and understand why it’s so central to its success.
When Airbnb was first started in 2008, its three founders intentionally created rare and memorable travel experiences —like inviting strangers to stay in your home! This is rare because most people were brought up to be distrustful of strangers entering their homes. For the concept to work, they had to design experiences from the booking phase to post-stay that helped build trust for hosts and guests.
The ability to view a traveler’s profile and read reviews before deciding to accept a booking is still one of the cornerstones of the Airbnb experience. It provides hosts with a level of reassurance that guests will respect their property. Plus, the hosts define the house rules. There’s also accountability for hosts to deliver what was promised according to listing details, as guests can review hosts.
In the traditional travel industry, a consistently great customer experience throughout the journey can be hard to achieve because there isn’t the same direct link between host and guest. Instead, there are many players involved. Airlines, hotels, transfer companies, restaurants, and tour guides each have a part to play in the overall experience. Currently, airlines, in particular, are struggling with canceled flights, lost luggage, and missed connections, which are frustrating travelers. This is beyond the control of travel operators and even airline booking sites, but there is still a way to build trust - by design.
The importance of digital transformation in the travel industry extends beyond basic booking systems. Innovations like virtual reality tours and augmented reality for destination previews are revolutionizing how consumers interact with potential travel destinations before booking. Further, AI’s role in personalizing travel planning based on user behavior offers a more tailored browsing experience, enhancing the likelihood of converting interest into bookings.
Travelers may not know what problems they’ll encounter when they travel, but as long as they have some assurance that a solution can be found, they’ll likely still book.
Highlighting information on flexibility and rebooking policies at strategic touchpoints can ease buying anxiety. Additionally, focusing on the destination and experiences awaiting travelers helps to focus on the positive aspects of travel rather than what can go wrong. Being intentional about design elements with a focus on continuous experimentation to improve CX builds trust because it aims to deliver on customer expectations.
Recent successes from other companies demonstrate the effective adaptation of Airbnb's strategies. For instance, Booking.com launched a new AI Trip Planner to enhance the travel planning experience.
Today, the debate over whether or not it’s possible to build meaningful connections on digital channels has primarily been proven, but this was not the case back in 2008 when Airbnb was founded. A key factor in their success and being named a major industry disruptor was their ability to create digital experiences that brought people together.
It was a process that evolved over time through trial and error by consistently delivering great experiences as the focal point. Being the disruptor in travel paved the way for others in the industry to look to digital channels to better connect with customers.
Most companies across the travel industry now have a well-established digital presence that offers online booking. But it’s a competitive space with travel and hospitality providers, including those beyond airlines and hotels, competing with third-party entities for customer’s attention. With the abundance of product options and little room to maneuver on price, building strong customer connections through engaging digital experiences can deliver a more sustainable competitive advantage.
In the broader context of digital transformation within the travel industry, integrating AI and machine learning to enhance customer interactions and satisfaction plays a pivotal role. To understand how to implement these advancements effectively, refer to our detailed article on Solving UX Challenges With Automated UX Recommendations from Evolv AI.
Understanding what makes a great CX requires living the experience as a customer continuously. For Airbnb, this means constantly testing everything from systems to host and guest experiences. In the early days, the founders hosted, so they quickly learned what was important to guests. But then, when they traveled, they would book stays at Airbnb properties to experience them as guests.
As the company has grown globally, these same habits are encouraged, and the culture of experimentation has become firmly entrenched. At Airbnb, they’re constantly asking questions like: What makes an experience memorable, what would travelers like to experience differently in a destination, and how are they searching for destinations? Some of the platform’s recent updates reflect how Airbnb has sought to answer these questions: Listings can now be searched by “sea views,” for example, or “Winelands farm stay experiences.” This was based on a finding that people don’t always know where they want to travel, but they usually have a clear idea of what they want to experience.
For most travel companies, experiencing destinations has always been the norm. The challenge is translating that destination knowledge into engaging digital experiences when no human travel consultant is involved. Knowing what information to focus on requires learning how visitors navigate a site and how they’re progressing in the customer journey.
This can be achieved through AI-driven experience optimization, which experiments with different ideas, formats, and content to find out what visitors are responding to and use those learnings to serve experiences that move them closer to booking.
The main lesson to be learned from Airbnb is how the value they put on customer experiences and continual experimentation changed how people travel and the length of their stays. This highlights just how powerfully positive experiences influence buying decisions.
Technology such as AI can optimize these experiences to improve personalization and engagement. This now provides the broader travel industry with a way to apply lessons learned from Airbnb to strengthen its position in the marketplace.
As travel rebounds, providing a seamless customer experience will remain a primary expectation, and AI-driven experience optimization offers a way to stay in tune with consumer preferences in real-time continually.