How Airbnb brilliantly retains its users to continue booking through the app

This week, I want to share a personal experience as an Airbnb host and something I learned that might interest anyone who’s part of an online marketplace or thinking about getting involved.

I’ve been an Airbnb host for more than a year now, renting out the first floor of my house, which wasn’t in use. It all started pretty casually—one day, I just clicked a few pictures and listed it on Airbnb, thinking I’d see what happens. In no time, I got my first booking, and since then, I’ve had a steady flow of guests.

But one thing I noticed early on was that many guests would contact me directly, wanting to pay outside of Airbnb. This got me thinking—Airbnb invests so much in its platform, from maintaining beautiful apps to running servers and marketing properties. And yet, when someone books outside the platform, Airbnb loses out, which isn’t fair considering all the infrastructure they provide.

This is a challenge that many marketplaces like Fiverr and OLX face too—users connecting on the platform but transacting outside of it. However, Airbnb has implemented a really smart strategy to combat this. They offer host insurance coverage, which includes protection up to $1 million. And they make it very clear—if you book outside Airbnb, this protection doesn’t apply. If something goes wrong, like property damage or an unfortunate incident with a guest, you’re on your own.

For me, the peace of mind that this insurance provides far outweighs the small extra revenue you might get from booking outside the platform. After all, if something happens, Airbnb has you covered. This approach not only ensures their hosts are protected but also encourages them to keep bookings within the platform.

Airbnb’s solution here is a brilliant example of how platforms can use safety and security as a value-add to retain users and keep transactions within their ecosystem.

If you liked this newsletter, forward it to your one friend who loves marketing :)