Last year, Airbnb reached a significant milestone when they reported their most profitable fourth quarter to date. In the final three months of 2022, the home-sharing platform saw massive success with an adjusted EBITDA increase of 24% to reach £417 million. Revenues also rose by a staggering amount – up 24% to a total of £1.6 billion!

Amazingly, it achieved its first full year profit in 2022 as well, boasting impressive net margins and net income both reaching 23%, totalling at £1.6 billion respectively. How did they accomplish this exactly? Well by escalating their sales and marketing investment, while transitioning from performance-oriented channels to brand development.

Changing How They Chose To Invest

In 2021, as Covid altered the landscape of marketing investments, Airbnb was forced to adjust their approach to focus even more strategically on how they invested. Despite decreasing its marketing budget by a quarter, the company still managed to maintain an impressive bottom line – proof that cutting back on spending need not always spell disaster.

As a result of the cut, they instead redirected their investment from performance marketing and Search Engine Optimism (SEO) into brand-building and Public Relations (PR). Undoubtedly, this shift was a major factor in Airbnb’s remarkable success and growth over the past year!

Why Start to Increase Their Focus on Brand-Building?

The increased focus on brand building was a crucial part of the strategy shift for Airbnb. Rather than relying solely on performance channels such as Google Ads and Facebook, Airbnb instead started to devote its attention into constructing trust through compelling stories and exciting content production.

By fostering new and closer connections with customers, this platform was able to tremendously amplify customer loyalty, meaning that when a customer needs a place to stay in the future, they will be more likely to choose Airbnb! That way, not only do they repeatedly gain new business but also keep old clients coming back as well – a guarantee for repeat success.

What Led to Increasing the Marketing Budget?

Fueled by its bigger marketing budget, Airbnb then further invested in advanced technology that provided invaluable insights about or relating to their customers and their preferences. Simultaneously, this asset improved operations throughout the entirety of their business.

By doing this, they were able to drastically reduce expenses while still providing an exemplary customer experience. In today’s world of growing competition and cheaper alternatives when it comes to lodging, delivering a top-notch user encounter has become necessary for maintaining relevance in the market.

Why Should Customers Choose Airbnb?

Even after years of success and plenty of competition, Airbnb remains one of the best housing solutions for travellers. The company has built an impressive infrastructure that makes it very easy for customers to find lodging quickly and efficiently. Moreover, the platform is constantly innovating to provide new services and features.

By investing in customer-friendly initiatives such as enhanced security measures, fully customizable search filters, and a wide array of accommodations ranging from apartments to villas – all with their signature “hospitality guarantee” – Airbnb stands out as a reliable option when it comes to finding a great place to stay at reasonable prices.

Airbnb customer choice
Airbnb customer choice
Source: MDPI

To Summarise

Airbnb’s tremendous success is testament to the power of strategic marketing investments – especially when accompanied by reduced costs and improved operational efficiency. By leveraging these measures, they have seen remarkable gains in a short period of time.

Through prioritising brand-building rather than depending on performance channels, Airbnb had the opportunity to generate trust among customers and construct enduring relationships that will benefit them for years to come — no matter what changes may arise!