Abstract
This report explores the organizational structure and marketing plan of a small Airbnb company operating in Puerto Rico. The current situation in the hospitality industry in the selected country prompts the firm to expand its visibility across the space and to acquire additional partnerships with local Airbnb hosts.
Puerto Rico is currently in recovery from the downturn caused by COVID-19 and hurricanes, which significantly reduced the number of tourists visiting the country. However, the market is gradually increasing its global share thanks to government support. Given this, many new entrants have emerged in the industry, prompting the examined company to adopt a multimodal marketing approach.
Digital advertising options, along with a referral program, appear sufficient to enable the firm to gain a substantial competitive advantage. The proposed marketing plan is projected to take up to seven months to implement. It is expected to increase the company’s market share in its operating locations by 15% through targeted marketing to its intended audience. Click-through rates, referral volume, customer acquisition costs, and sources of website traffic will be used to measure the plan’s efficiency.
Executive Summary
Air Bed and Breakfast (Airbnb) is a unique platform that creates a new type of shared economy. This paper analyzes the Airbnb cleaning company in Puerto Rico and aims to develop a feasible marketing plan that accounts for its current situation. Aside from cleaning services, the firm also assists Airbnb hosts with various tasks necessary to maintain the rental properties to the platform’s required standards.
The mission of the organization is to provide auxiliary services for Airbnb hosts, alleviating their burden and sharing their responsibilities. The company operates with a vision of becoming the number one choice for Airbnb hosts in Puerto Rico when they require assistance with their properties. The firm’s goal is to demonstrate integrity, kindness, and mindfulness in all its operations, thereby fulfilling the cleaning needs of hosts and their clients. The company’s organizational structure is highly centralized, with a focus on each employee’s specific functions. Since the team is small, there are no divisions; however, the organization has appointed a marketing manager and a public relations manager.
The firm’s marketing objectives include increasing visibility on existing digital platforms, expanding word of mouth through a referral program, and establishing a firm website for customer interactions. Marketing objectives include ranking on the first page of search results for the company’s newly launched website, garnering at least 50 reviews on platforms such as Yelp and Quickbreaks, and receiving at least 8 referrals from hosts who already use its services. Additionally, launching Facebook ads can improve the business’s website visibility.
Current Situation
The analyzed cleaning company’s market position focuses on low prices to remain competitive while providing a unique array of services, which include cleaning and rental management as a subcontractor. This approach enables the business to achieve a high degree of differentiation, thereby forming lasting relationships with its clients. The target market includes Airbnb hosts in Puerto Rican regions where the firm operates. There are numerous competitors in this industry, as it has low barriers to entry, which makes it essential to align one’s pricing strategy with customers’ perceptions of quality and the costs of auxiliary services at their locations. The current position indicates a stable yet small market share, which the company aims to increase within the following year.
The primary issue pressing on the company’s finances is the economic situation in Puerto Rico. The Puerto Rican economy’s recession is linked to several global events that had a long-term detrimental impact. First, the country was hit by Hurricanes Irma and Maria, which caused massive property damage, and COVID-19 followed shortly after, further destabilizing the situation (Carstarphen, 2022). The company, alongside the hospitality industry, took a significant hit to its revenue stream as a result.
The impact on Puerto Rico’s tourism market stemming from these issues led to a decrease in its market share, affecting Airbnb locations the company served (Carstarphen, 2022). However, the federal government began restoring the industry by funding its operations, as tourism plays a significant role in Puerto Rico’s economy. However, other problems also weigh down on the company’s activities. The threat of new entrants, combined with the intense competition for a limited number of contracts with hosts, requires a high degree of proficiency to expand one’s business in this sphere.
Competitive Analysis and Critical Issues
The competitive landscape for auxiliary services for Airbnb hosts in Puerto Rico is intense, as the island is among the most popular tourist destinations. In fact, numerous competitors operating in the same area offer cleaning services at similar fees, such as Tropicalia Rentals and Express Spotless (“Express Spotless,” n.d.; “Puerto Rico Vacation Rental Management,” n.d.). However, none of these firms combine rental management and cleaning, which gives the analyzed company an advantage.
It is essential to comprehend that the cleaning services for Airbnb are a highly populated market due to low barriers to entry. Firms are not prohibited from performing both managerial and janitorial activities, thereby turning the company’s potential success into a signal for others to follow. There is significant competition for partnerships with hosts, as the model implies the need to maintain a reputation among Airbnb hosts that exceeds other offers in every respect.
Another critical issue is the potential for new government regulations on Airbnb locations. There are complaints about the rise of Airbnb services in Puerto Rico, which inflate property prices and gentrify areas, pushing natives out of areas popular with tourists (Bartolomei et al., 2022). As an auxiliary services company, the firm can also be affected by such policies through fewer hosts who are also less willing to pay for its services. The growth of the business under such a model is a highly demanding task that requires a creative solution.
Airbnb Cleaning & Rental Management SWOT Analysis
Strengths
- The connection with Airbnb hosts enables the firm to create a significant database of long-term customers.
- The dynamic scale of operations allows the company to expand its services during hot seasons.
Weaknesses
- The firm is yet to establish its reputation on online review platforms.
- The variety of services included in the cleaning operations may be challenging to execute properly.
- Rental management as an auxiliary service may overburden managers.
Opportunities
- Airbnb is an international platform that is widely popular in Puerto Rico as a means of finding a suitable rental place.
- There is a boom in the tourism industry that the federal government supports.
- The expansion of the workforce in this industry is relatively painless.
Threats
- The Puerto Rican market for cleaning services has numerous other firms that strive for the same distinguishing qualities.
- Tourism in Puerto Rico has a seasonal pattern, creating the need to plan ahead for inevitable downturns.
- Cleaning services may be under the threat of government control in Puerto Rico.
Marketing Objectives
The primary marketing objective for the cleaning company is to establish a greater online presence by leveraging popular review platforms. Yelp, Quickbreaks, and similar websites that aggregate information about rental management and maintenance companies can help the firm build a positive image that attracts new hosts to try its services.
Additionally, creating a personal website for the company can consolidate all essential information for consumers in a single location, thereby increasing visibility and accessibility. This place can also serve as a customer support and feedback hub, boosting the company’s market reputation. A referral program will be launched to capitalize on the existing customer base, attracting new clients who will receive a discount for each host they direct to the company. Finally, advertisements on social media platforms, primarily Facebook, will be used to promote the website.
The objectives will take the company approximately six months to turn ideas into final results. First, creating a website will require at least 14 weeks from the moment of its proposal to the conclusion of its test run. An additional 12 weeks will be required to push the website to the top of search results through search engine optimization (SEO). Simultaneously, during SEO activities, advertisements for the company’s website will be placed on Facebook for four weeks, with the option to extend this period by an additional four weeks. The development of a customer referral program and its integration into the website’s structure
Marketing Strategies
Product
The company provides services to Airbnb hosts who seek to rent out their properties in a condition that exceeds visitors’ expectations. On short notice after an incoming request, the firm sends its employees to the location with all essential cleaning tools and supplies. Workers are equipped to perform tasks such as carpet, kitchen, window, and eco cleaning, as well as disinfecting and general janitorial activities. As an additional service, the company also handles rental management, including showing properties and providing keys to new arrivals. This type of differentiation enables the firm to identify a secondary revenue stream that also provides a competitive advantage.
Price
The pricing strategy focuses on low-cost optimization, which requires the company to consider below-average market prices and strive to achieve them in its activities. Since the market is highly competitive and has low barriers to entry, the firm needs to remain competitive with other offers. However, differentiation options enable it to maintain a slightly higher margin.
The prices start at $65, although the average order, which includes multiple options, increases to $115. Rental management requires a different pricing approach, as it involves advertising a property to potential renters. In such cases, the company charges a 25% fee on rent from customers it has found. Payment options include digital currencies, credit cards, and cash.
Promotion
The company uses online platforms for Airbnb hosts as its primary advertising channel. Websites like Yelp provide a significant leveraging point for businesses operating in shared economy environments, especially in the hospitality industry (Cheng et al., 2019). This approach enables the organization to highlight its strengths through customer reviews, providing potential clients with evidence regarding the quality of its services. Simultaneously, it does not incur a high marketing cost, as it is feasible to ask the existing hosts working with the firm to leave a review. Moreover, Facebook is a fitting platform for promoting cleaning and rental management services, as it enables organizations to target their audiences with high precision while possessing a high degree of flexibility.
Position
The primary source of customer acquisition is Internet advertisements, although the power of word of mouth should not be underestimated. The services are positioned at the lower end of the price spectrum, as the company needs to compete with numerous other market entrants. It has a presence on digital platforms related to the hospitality industry, providing the highest visibility possible.
Simultaneously, the company must create a website that serves as the front end, connecting with customers. Consumers can access the firm’s services via online chats and phone calls, although the option to request an employee online through a special form could also be beneficial. Additionally, the company prompts Airbnb hosts to generate referrals, as this approach enables it to retain existing customers while finding new ones with minimal investment.
Schedule of Action
Starting from May 1, 2023, the firm will seek to establish its online presence through a multimodal approach. First, the platform must be created to congregate the information regarding the firm’s business operations in a single place. The company’s website must be designed by June 1, and its trial runs must be complete by September 15, 2023, to begin preparations for its SEO (Matthews-El, 2023). The trial run might be utilized as a starting point for the Facebook campaign. SEO for the website is projected to begin immediately after its completion. However, this process takes at least three to four months on average before a firm can perceive its benefits (Tinoco, 2021). Therefore, it will be essential to find a trusted website builder that can ensure the timely completion of the projected tasks.
The referral program is scheduled to launch on June 1, 2023, and will initially be introduced through an advertisement and a notification sent to existing customers with their permission. Its first version will not be digitized, although it will lay out the groundwork for the eventual transfer of this system to the company’s website. After the final trial of the online platform is complete, referrals will be registered directly into it, allowing managers to track them efficiently. In addition, our existing customers will begin to receive mobile notifications regarding their willingness to leave a review on Yelp or Quickbreaks. Finally, Facebook ads will be placed for a period of one month in June, and possibly later for an additional month once the work on the website is complete.
Budget
The website and its promotion will be the source of the company’s main expenditures. Building platforms, such as Wix, GoDaddy, and Squarespace, offer affordable options for small businesses that align with the proposed design (Matthews-El, 2023). The prices include a domain name, hosting, designing, and other related services. On average, a complete product will cost the company $3,500, which will include the above options and a year of hosting on a server with sufficient protection and bandwidth (Matthews-El, 2023).
SEO activities will add $2,000 to the monthly fees. The Facebook ad expenditure limit per month will be set at $1,500, which will suffice for the firm’s needs. Additionally, $1,000 will be allocated for general website advertising through services such as AdSense. Therefore, the total budget for this marketing campaign will be $16,500, covering all aspects proposed in the plan.
Evaluation
To measure the results, the company will track several key indicators, including click-through rates, customer acquisition costs, the number of referrals per existing client, and the sources of website visitors. First, the website’s popularity will be assessed from the statistics provided by the hosting platform. The goal for the next seven months is to transfer at least 2.5% of ad viewers to the website, with Facebook ads accounting for approximately half of that number. Simultaneously, it must be possible to expand the existing customer base by 3% through the referral program. In comparison, 12.5% of them can be convinced to write a review on a platform of their choice during the same period.
References
Bartolomei, R. S., Nieves, D. L., Grillasca, E. F., & Venegas, Y. S. (2022). The impact of short-term rentals in Puerto Rico: 2014-2020. Center for a New Economy.
Carstarphen, M. G. (2022). The comeback Niño: Puerto Rico’s tourism industry on the re-bound, post-Maria. In D. Moss & B. DeSanto (Eds.), Public relations cases: International perspectives (3rd ed., pp. 42-49). Taylor & Francis.
Cheng, X., Fu, S., Sun, J., Bilgihan, A., & Okumus, F. (2019). An investigation on online reviews in sharing economy driven hospitality platforms: A viewpoint of trust. Tourism Management, 71, 366-377.
Express spotless. (n.d.). Yelp.
Matthews-El, T. (2023). How long does it take to build a website? Forbes Advisor.
Puerto Rico Vacation Rental Management. (n.d.). Tropicalia Rentals.
Tinoco, A. (2021). How long does SEO take to show the results you need? Rock Content.