Just how does Airbnb get away with spending so little on marketing and what does a TikTok influencer have to do with it? What will it take to keep travel revenues growing, while the industry also does its part to save the world? Why does one travel sector see a silver lining in rising interest rates and inflation?
Just how does Airbnb get away with spending so little on marketing – and what does a TikTok influencer have to do with it? What will it take to keep travel revenues growing, while the industry also does its part to save the world? Why does one travel sector see a silver lining in rising interest rates and inflation?
With three days chock-full of panel discussions, keynote speeches and executive interviews, you’d be excused for not catching all the insights from last week’s Phocuswright Europe 2023 conference — even if you could make it to Barcelona for the company’s largest event in Europe to date.
To catch you up, here’s a recap of some of the things you might have missed.
More free publicity for Airbnb
A recent PhocusWire analysis of expenditures in the first quarter of 2023 revealed wide disparities in how some of biggest travel companies approach marketing. While Expedia Group and Booking Holdings spent a combined $3.2 billion on marketing over the first three months of the year, Airbnb spent $450 million.
Amir Segall, the commercial director at Airbnb, provided some insights into how his company can manage that during a center stage interview with Linda Fox, PhocusWire’s senior Europe reporter.
As Segall explained, Airbnb can afford to rely more on the free publicity it gets from news and social media alike because most of its traffic is organic.
“Airbnb is a noun. It’s a verb. It’s a very well-known global brand,” he said.
As an example of how that plays out, he shared the story of Alix Earle, a TikTok star with millions of followers best known for her skincare and makeup tips. The 22-year-old American was on a trip to Europe with friends in May when she posted on TikTok that the house where they were supposed to stay in Italy didn’t exist.
“The girls’ trip took a turn,” she said.
The people on Airbnb’s TikTok account were among the more than 5 million who viewed the post — and a follow-up video from Earle showed her group enjoying themselves in a palatial villa and thanking Airbnb for arranging it.
“She and her friends had fallen victim to a fake listing [on a different website],” Segall told Fox. “We were able to find an alternative accommodation for them. Then she posted a story about that, which had something like 635,000 likes. We think that’s a really good way for us to speak about our brand.”
Fox asked if the event had been choreographed for marketing purposes — as some online reports had speculated. Segall earnestly denied that.
“It was completely non-choreographed,” he said, calling it an example of “opportunities where we can step in and help.”
A call to action on climate change
During a keynote speech on the travel sector’s challenges in working toward United Nations’ goals of halving global emissions by 2030 and achieving net zero by 2050, Bernadett Papp, a senior researcher with the European Tourism Futures Institute, spoke of the common interests served through collective, short-term sacrifice.
“When you think about our sector, travel and tourism, and its connections to climate change, then you see a very interesting paradox,” she said. “On the one hand, tourism as we know is a key driver of socio-economic development. It contributes to employment, generates revenue, contributes to the livelihood of many people in destinations.”
But on the other hand, she continued, travel is also a significant contributor to climate change, and climate change holds the potential for “devastating impacts on travel destinations.”
“If there’s no destination or it’s not safe to travel to the destination, then there is no tourism. And if there’s no tourism, many destinations will have a very difficult time to drive their economies forward. So I strongly believe it is in our common interest to protect destinations against the impact of climate change so that communities can thrive.”
Referring to her organization’s work on a report published this year by the Travel Foundation, she spoke of the dozens of different interventions and hundreds of scenarios the report’s researchers considered before arriving at a sobering conclusion: None of the combinations allowed travel to reach the UN goal.
“So we had to think about something a little more radical,” she said.
The only way to allow travel to continue growing while meeting the climate targets from the 2015 Paris Climate Accords, she said, was capping airport capacities at 2019 levels until aviation can fully decarbonize. Only with that approach could the travel industry continue growing while still doing its part to reach climate change goals.
“We need to join forces. We need to collaborate,” she urged the audience of travel professionals. “Hopefully then, the goal of net zero by 2050 will be in reach and we as a sector can do our part.”
The long game for short-term rentals
At a panel discussion on what comes next for short-term rentals, the experts were unanimous in their positive outlook.
“I’m an optimist,” said Leda Zanlungo, the general manager for Iberia at Sonder. “Travelers are there, [and] we have a new generation of travelers, and they’re going to keep on traveling.”
“The fundamentals are very strong,” chimed in Henrik Kjellberg, a group CEO for Awaze. “This sector of the industry is going to continue to outperform the rest. We’re very, very optimistic.”
“There is a strong foundation and strong growth,” added Sylvia Epaillard, a co-CEO at Interhome. “We see the growth [and] we see also the change in consumer behavior. They’re not talking anymore about a house with three bedrooms and a pool. We’re talking about, ‘Can I have meetings there?’ or ‘Can I have a family reunion there?’ … This is the stuff that we have to tackle now.”
Overly restrictive regulations imposed by local governments remain a mutual concern, as the panelists spoke of a need for more concerted lobbying efforts to educate communities about the benefits short-term rentals can provide.
“If you do it well, you do bring value to the neighborhood, the community,” Zanlungo said.
“We are growing up as an industry, and we have to participate more, to inform the legislators of the wonderful things that we do,” Kjellberg said.
The industry may find more allies in homeowners who are driven to seek more income for their biggest investments following trends of home expansions or renovations during the pandemic and rising interest rates now.
“We see a lot of owners looking for our services,” Epaillard said. “Many have been going into the idea of renting out their homes, many have been going into the idea of investing into secondary homes. I think what they realized … is that, as a business, it’s a full-time job to do, so they are more and more seeking professionals to help them actually do the job. And there are two sides to that job. One is administrating a secondary home, a rental, with cleaning, with handyman work, etcetera. The other is distributing: finding guests, filling the rooms as much as possible for the right price, at the right time.”
And while that could increase the supply, demand may see a boost as prices elsewhere continue to rise.
“Air prices are through the roof. People are still doing this revenge travel, [but] the air prices are going to remain high,” Kjellberg said. “We still offer the best, as a category, the best value for a vacation. … I think we are very well positioned as an industry.”
Balancing act for tour and experience operators
While the news has generally been upbeat for the travel experiences market, with a majority of global operators reporting that bookings in 2022 were at or above 2019 levels, an expert panel on the field discussed some of the challenges that remain.
Fabián González, Phocuswright’s market analyst for Spain, moderated a discussion among Ben Drew, the president of Viator, Alberto Gutiérrez Pascual, CEO and founder of Civitatis, and Peter Ulwahn, CEO of TUI Musement.
The panelists saw great potential in the sector’s recovery from COVID-19.
“I am optimistic for the future,” Ulwahn said. “The U.S. is strong. Europe is back. Asia is now coming back.”
Drew agreed. “Our operators are seeing bookings well above 2019 levels,” he said. “Part of that is because of the U.S. and a number of other trends related to it, but it’s a very different demand than what we had before the pandemic and during the pandemic.”
The difference, he explained, was a shift from travelers booking experiences closer to home to a “re-emergence of long-haul travel.”
Yet the bright outlook didn’t blind panelists to concerns with fragmentation and meeting customers’ demands for shorter booking windows, which Drew called “one of the biggest challenges in this industry.”
“You have 1 in 3 people who want to book on the same day as the tour is actually taking place,” he said. “The challenges that are involved in that for small businesses are pretty great.”
While encouraging travelers to book more in advance is one solution, it goes against prevailing traveler trends. That leaves it for operators who are “really obsessing” about travelers’ wants to guide the sector towards something more intimate that allows for even shorter booking windows, he added.
“There is this tension between what is easy for operators and what travelers want,” he said, “and we’re sort of playing in the middle and trying to balance those two sides.”
This article originally appeared on PhocusWire.