Tag Archives: Marketing

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Key risks to consider when doing business in China

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Organizations doing business with China know that the operating environment is complex and very different from the Western world. However, the market opportunity remains promising, despite recent challenges from the coronavirus pandemic.

Success depends on identifying and managing a number of China-specific risks, including the following:

Current organizational leadership capabilities, structure and culture may not effectively support business performance.

Many multinational organizations have a dominant Western mindset and a lack of cultural intelligence. Others have corporate functional and regional silos that hinder business performance. It is vital that multinationals understand how China works.

They need to be aware of the many invisible and subtle differences between Chinese and Western culture, mindsets, behaviors and ways of working. Leaders require an informed understanding of the current business environment in China.

Companies working in China must increase the ability of their leaders to manage cross-cultural teams, and they should develop a supporting organizational structure that matches the specific challenges of the Chinese business context.

Organizations may not foresee and adjust to significant changes in the business environment in China.

The Chinese government’s austerity drive and the war on corruption have become permanent fixtures since 2012. Multinational companies are under increased government and public scrutiny, with stronger regulatory oversight, so businesses need tighter corporate governance and a focus on improving government relations.

This is not just about gaining market access (getting approvals, licenses, land, etc.), but it extends into managing risk. Risk management should focus on understanding regulatory threats, closing control gaps, and having an effective crisis-response team in case a regulatory investigation is launched.

As companies improve their understanding of the implications of new laws and regulations, and seek to adjust and adapt their operations, the importance of building a pristine business reputation will be more critical.

Failure to manage relationships with partners, clients, suppliers and other stakeholders may lead to litigation.

China’s legal framework is different from many Western countries. If disputes occur, lack of familiarity with China’s legal framework or how the legal system works can cause problems. Local arbitrators can deliver unexpected outcomes, despite legal opinions, facts and contractual terms that would suggest otherwise.

Organizations should therefore seek to minimize the risk of litigation, with a strong culture of relationship management, clear communications, and proactively identifying and addressing issues that might give rise to conflict.

China is different. Organizations doing business with China must have a deep understanding of how China works. They need to improve their organizational capability, governance and culture if they are to succeed in China. While the Chinese government remains committed to opening up and reform, the attitude towards multinationals is undergoing a subtle change.

Only those organizations whose investment can bring meaningful impact to the country will be welcome. The challenge for organizations wishing to do business is China is to ensure that they are on the preferred list, that they operate in a compliant manner, and that they make positive contributions to the local community, economy and stability of the country.

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Warning: 3 things you need to know before a church rebrand

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It’s all the rage. And it’s a great trend. In fact, if you haven’t branded or rebranded your church in the last five years, you should budget for it in the next year (because you’re seeing a decline in people).

Why? Because an effective rebrand will help you:

  • Evangelize better (it’ll reconnect you to your community)
  • Increase membership (your members will improve word-of-mouth promotion)
  • Strengthen participation (members will have more ownership of ministries)

But before you jump into the rebrand process, understand these three things:

1. It’ll cost more than you’d expect.

Rebranding is about change or improving. It’s about understanding your audience as best as you can, discovering (and controlling) perception, and establishing visual brand fences so people recognize you. It’s about becoming a solution to their needs. And every time they see your brand, they’re reminded of your relevancy and benefit.

That means you (probably) need an outside consultant to maneuver you through the complexity. Then you need a professional to create a logo and graphic standard for your brand. Additionally, updating everything from signage to website to business cards will be needed.

Your brand will need to be relaunched on social media, online, in print, and in person. This takes a lot of coordination, skill, and money. But thousands of churches understand it’s worth it to obtain the three benefits listed above.

2. It’ll take strong leadership.

Without a solid leader, a rebrand will waste money and be a waste of time. Most churches are very top-down, so the senior leadership (especially the teaching Pastor) must be on board and in control of messaging and team motivation.

Rebranding will require control to achieve the best results. This takes strong willpower! And the brand must be led through all ministries including the preaching ministry. Leadership inconsistencies will cancel out the benefits and create chaos.

3. It shouldn’t be done quickly.

By now, you’re thinking, “so why do this?” And I’ll reiterate that every successful organization (whether for-profit or nonprofit) brands and/or rebrands continuously in order to connect properly to their community and followers.

A brand becomes the glue between your people and your message. But understanding your audience (internal and external), discovering your brand thread, implementing a visual brand, incorporating a branded communication strategy, and even improving ministry products to support your rebrand will take time.

How long? Six to nine months to go from start to launch if it’s supported and prioritized properly. Then, consistent use of the rebrand requires three to five years to establish it in a community.

Again, it’s worth it. I’d encourage you to understand these three things and let them influence and inform your process, so you create a controlled brand that connects more people to Jesus Christ. That’s our goal!

A rebrand doesn’t change the Gospel message; instead, it compels people to receive the message of Hope in a way they’ll feel like they’re understood and loved. That’s great evangelism!

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Newsjacking is a powerful tool to boost your brand — if you do it right

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As the COVID-19 pandemic continues, you as a marketer are of course looking for appropriate ways to augment your brand’s visibility and profits. One strategy to try is newsjacking. The term was invented by author David Meerman Scott, who defines newsjacking as implementing your brand’s content or opinion into news stories that are breaking online through blog posts, tweets, or social media posts.

According to Sprout Social, a brand can accomplish this most easily by jumping onto trending news stories. Newsjacking can inject new life into your brand’s SEO easily, because as you monitor trending news, you’re able to tap into a goldmine of fresh keywords and phrases you can then use for ranking. Using this material will attract new eyeballs to your products, services, and help your brand’s philosophy as a whole.

So, how do you make the newsjacking process happen for your brand quickly and easily? Use the following five steps to ensure you’re maximizing your ad potential and creating copy that is appropriate, sensitive and positive.

Use Google resources the right way to ID trending news and terminology in real time.

Your first order of business is to monitor stories that you can link to in the most obvious and logical ways. Google Alerts, Trends and Maps are excellent tools to use in this way. Not only can you keep your eye on breaking stories, you can gauge interest levels and precise locations of news happening in your local sales areas.

Pull out the basic facts about a news event, repeat them factually and accurately to your customers, and then link that info to your products in a brief sentence or two. For example, if a news report indicates that consumers in your area have less access to outdoor restaurant dining as the weather turns colder, you can offer them the option of purchasing the food your brand offers via delivery, or through your grocery store product line.

Review backlinks and hashtags to determine how people are reacting to a given news story.

Your team should immediately monitor a story’s interest level this way. Once it’s obvious people are talking about a current event, the team can determine whether those people are consumers in your wheelhouse, and, if so, move your brand quickly into the conversation.

Make your commentary on a breaking story sensible and substantial.

According to Front Lines Media, it’s key to ask yourself, “How can I add value to this? How can I tie my brand in?” You want to do this in a way that is never tone-deaf or sensational, but instead shows your brand off in a concrete, responsible light.

Don’t be smug or corny with the content phrasing you use — in context with a real-world event, it will be jarring and seem out of place. Also, never ever use dark humor in a tie-in, as this too will most likely fall flat at best, or repel the audience you’re trying to attract at worst.

Stay ethical at all points in the process.

Examples from Shortstack emphasize the fact that newsjacking can go wrong if you choose a story not relevant to your brand, lack empathy for any people who are adversely affected within a story, or put out false info about your brand in any way. Never try to insert your brand into a story about a tragic event.

You also never want to blatantly push products in a post related to a news story — being obvious is a no-go. Instead, state your brand’s position on the matter in a humane and intelligent way, and you’ll stir interest for what you sell effortlessly.

Be timely.

Jump on a breaking story with a brand post within a half-hour if possible. You can wait as long as a day to link to a story that has longer legs in a news cycle, but after that your brand runs the risk of looking a bit out of the loop.

Network, network, network.

Connect with bloggers, local journalists and your influencers in terms of asking them to alert you to interesting news they see in real time, and then repost your subsequent response to it when that is appropriate.

This kind of outreach can maximize your posts’ exposure even further. Think of newsjacking as a speed-driven team effort — get all the moving parts in sync, and your brand’s exposure level can reach its greatest heights yet!

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How to advertise your small business inexpensively

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Getting the word out about your business can be the most frustrating thing a small business owner faces. If you build the world’s greatest mouse trap, but nobody knows about it, you aren’t going to sell any.

With a small business’ limited budget, how can you spread the word? In the 21st century, there are myriad free or inexpensive ways to advertise.

  • List your business with Google My Business, Bing Places for Business and Yahoo! Local. Post your location, hours, phone number, website and email. Be sure to include a description and photos, because those listings draw more attention and more business. Once you’re listed on Google My Business, you can import your listing directly into Bing.
  • Social media. Post frequently on Facebook and Instagram. Show your products, services and employees. Post on other Facebook pages related to your business or on local community pages that allow it.
  • Show off your products on Pinterest, especially if you have good images. You can even let people share images directly from your website, which will drive traffic there.
  • Talk about your business, your products and your industry. Most people would rather have their teeth drilled, but public speaking engagements at conferences, webinars and podcasts can be a way to get the word out about your business. Don’t try to sell your goods or services, just speaking as a professional will draw attendees to your business.
  • If you have a good or original story, contact local newspapers and television stations and see if they would be interested in doing a feature on your business.
  • Send out regular press releases to newspapers, news services, radio and television with changes, improvements and special events at your business.
  • Get listed as an expert in your field with HARO (Help A Reporter Out). The reporter uses you as an expert resource and your business gets a plug.
  • Gather reviews on sites like Foursquare, Google, Yelp or Tripadvisor. Some customers check these sites before making a purchase, and a positive review can bring in new business.
  • Post your business on the Nextdoor app in the neighborhoods in your area. This is grassroots advertising and it’s effective.
  • Make sure your business shows up in a Google search by using Search Engine Optimization (SEO). Get some pointers here: https://backlinko.com/seo-strategy
  • Create how-to or promotional videos for YouTube.
  • Build an email list of your current customers and potential customers and send out marketing materials on a consistent basis.
  • Join the local Chamber of Commerce and get listed on their directory. And be sure that the person who answers the phone there likes you and your business. When the chamber has get-togethers, show up, smile, talk to people and pass out business cards.
  • Expand your network (and customers) with LinkedIn groups interested in your products and services.
  • Partner with other small businesses. For example, if you own a small cheese shop and there’s a wine store in town. Stage a wine and cheese event where you can both show off your products and draw on each other’s customer base.
  • Team up for charity. Even if you can’t donate cash to a nonprofit, you and your staff can volunteer, or you can offer a share of your sales on a certain day. Fans and followers of the charity will turn out and could discover a new favorite place — your place.
  • Get your car professionally wrapped with vinyl matte advertising and park it in a conspicuous place. Driving back and forth to work will also bring attention to your business. The initial cost can run about $2,000, but you have a movable billboard that can last five to seven years.
  • Donate your goods or services to a silent auction for a community event. Nail and beauty salons, barbershops, restaurants and boutique owners often use this to find new fans.

Not all of these advertising strategies will work for every kind of business. Trying a variety and gauging the response will let you know where to spend your hard-earned advertising dollars.

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Freelance economy surges in the age of COVID-19

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While the COVID-19 pandemic has ravaged the American economy and created high levels of unemployment, at least one element of the workforce has flourished in 2020. Freelancers — collectively referred to as gig workers — have swept in to fill the jobs gap left by the rapidly spreading virus.

According to a survey conducted in July by Upwork — a platform that connects businesses and freelancers –— more than 59 million Americans performed freelance work in the past year, representing 36% of the total workforce. This was a 22% increase since 2019, contributing an estimated $1.2 trillion to the U.S. economy.

The pandemic has set a number of workplace trends into motion. It has turned tens of millions of Americans into virtual workers as many employers convert full-time jobs into freelance positions. Ties between companies and employees are weakening, and that is opening the possibility that in some white-collar occupations, freelancing may become the new norm.

Part of this shift is predictable. Facing a shaky economy and an uncertain future, employers are hesitant to hire permanent workers. And now, tools such as Zoom are enabling more flexibility by mobilizing the workplace. White-collar jobs can be done almost anywhere, anytime, by any capable person with a phone, internet and a laptop.

Other key findings from the Upwork study suggest some additional trends. They include:

Young adults are turning to freelancing for economic gain: To counter a tough job market for recent college grads, half of the Gen Z workforce (ages 18-22) has freelanced in the past year and, of those, more than a third (36%) started since the onset of COVID-19.

Freelancing increases earning potential: More than 75% of those who left full-time employment to freelance say they earn the same or more than when they had a traditional employer. A caveat: gig workers usually don’t receive benefits such as health insurance, paid vacations or sick leave. Not a problem for most young workers, but it could be for older folks and those with families.

Professionals are likely to consider freelance work in the future: Nearly 58% of non-freelancers who are new to remote work due to the pandemic are actively considering freelancing in the future.

Freelancing is helping to hone skills: Almost two-thirds of all freelancers (59%) have participated in skills training in the last six months (vs. 36% of non-freelancers).

Companies of all sizes rely on freelancers. There’s a boom in demand for people to support customer services as well as e-commerce development, web and mobile design. Other fields with high demands for freelance workers are computers/mathematics, publishing and finance/business, according to the report.

According to Upwork President and CEO Hayden Brown, “It’s not surprising that freelancing is on the rise in this era of uncertainty.”

Brown cites another driver — the growth, largely pandemic-induced — in remote work. “We expect this trend to continue as companies increasingly rely on freelancers as essential contributors to their own operations.”

“The changing dynamics to the workforce that have occurred during the coronavirus crisis demonstrate the value that freelancing provides to both businesses and workers,” added Adam Ozimek, Upwork’s chief economist.

Society’s perception of freelancing also is undergoing change. Seventy-one percent of the freelancers surveyed say perceptions of freelancing as a career are becoming more positive.

Meanwhile, 67% of full-time freelancers report that freelancing has prepared them to cope with the uncertainty of the coronavirus pandemic better than people in traditional jobs.

Upwork has been joined recently by several other platforms geared for remote working that enable freelancers to charge subscriptions for their content. Patreon, for example, is a subscription-based platform popular among creators, from musicians to printmakers, who want to sell and distribute their work.

Substack, a platform that allows writers to develop and distribute customized subscription-based newsletters, has experienced a 49% increase in sign-ups this year as news outlets across the country laid off journalists.

From bookkeepers to journalists, IT engineers to jazz musicians, these platforms could be the future of the gig economy.

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What exponential disruption can teach us about transformation

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When I take a moment to step back and look at what is happening in the business world today, it seems to me that “exponential disruption” may be an understatement. Every day I read either of an established, respected industry giant falling into administration, or of a new startup suddenly worth billions on the stock exchange.

And there is less and less room for the “steady as she goes” companies that sit between these two extremes. If you are not actively disrupting your industry (or someone else’s), firstly why not — but more importantly, you may already be a casualty of your competitors.

So, what has caused this incredible change of pace?

Unsurprisingly, technology sits front and center, delivering layer upon layer of revolution and evolution in a way that is impacting the commercial landscape like nothing before it.

Never has it been so cheap to run a business so well. Open-source software, cloud-based infrastructure, the falling price of hardware, and — through social media channels — the highly democratized nature of marketing mean companies don’t need the huge Capex investment to set themselves up to run efficiently, manage customers well or to go to market in a big way, leading to an influx in technology startups.

Next there is the sheer volume of data and information that is now freely available at our fingertips through both public and private sector organizations. This has impacted in two ways. It has led to significant industry disruption, as content and information that used to be a cost became free — consider the impact for example on the fleet street newspapers, many of which are financially struggling as newspaper circulation plummets. As we’ll see later, this is an ongoing pattern.

But it has also facilitated startups. Understanding and predicting the market used to be very expensive; now predictions are far more affordable and indeed more accurate, because of the breadth and wealth of information available. And where previously businesses may have suffered from “analysis paralysis” because of the sheer volume of information, AI allows us to make sense of the noise. Informed strategic decision making is no longer the domain of the cash rich incumbents.

Finally, there is the way that disparate technologies are converging to create their own breakthroughs. The smartphone is a great example. It started by combining a number of key legacy technologies — camera, telephone, typewriter, maps. But it didn’t stop there: the successful convergence then accelerated to the point where now it is the dominant technology platform — essential in everyday life and offering every possible capability from heart rate monitors to tape measures to blood oxygen sensors. Each of these was a thriving industry in its own right: think of Kodak and Garmin, for example — all disrupted by a free app on the smartphone.

It seems the scales are firmly weighted against the legacy firms, yet there is little preventing them from exploiting these same advantages — indeed they have faster access to expertise and cash so can actually invest sooner. Yet even companies once noted as “innovators” — such as IBM — are struggling.

It isn’t that simple. Legacy companies have a number of weighty responsibilities: they must continue to service and deliver for existing customers; to drive large revenues from their existing cash cows; and of course to provide a return for their investors, who will watch any investment into “risky” R&D with trepidation.

But the simple fact is that the market is changing rapidly: competition is fiercer, customer tastes are more fluid and the speed at which businesses can fail has accelerated. Innovation is key to survival.

How can legacy companies focus their own transformation?

1. Understand that innovation can and will come from any direction: take inspiration from that to look outside your own sphere: innovation as a business platform will triumph over a single innovative product

2. Agility is key: move away from hyper-rigid hierarchies to structures that enable fluidity so they can bring the diverse people together quickly to solve challenges collectively

3. Move quickly: Companies that adopt technology sooner and more successfully gain an exponentially increasing advantage. Those that don’t lead the disruptions become their casualty.

4. Offer more value: with all of the information now available, there has been a shift in power from seller to buyer; intellectual capital and brand no longer lock in the customer. You must build loyalty via value and innovation — or perish.

5. Protect your brand: a company’s reputation rests on what an individual or community thinks of it, and ratings and reviews have become more important than advertising.

Finally, don’t stop, even for a second. Innovation is ceaseless — your company must also be in its pursuit.

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5 ways for B2B companies to reach customers during COVID-19

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The COVID-19 pandemic continues to have an enormous impact on the ways we live and work. For business owners and marketers, it might have meant a dip in revenue or challenges in finding new leads and customers.

However, every challenge is also an opportunity. The pandemic doesn’t have to spell disaster for your B2B company! Read on to learn how to continue connecting with new customers in these difficult times.

Hold online events

As the world of work has moved online, so too have events. If you previously relied on conferences, trade shows, and in-person meetings, why not hold an online event?

A course, webinar, or virtual conference can help you to reach new audiences and remind your prospects that you’re still very much open for business.

Here’s how to do it:

  1. Define your goals, then choose a suitable format and platform.
  2. Schedule your event. In the middle of the day on a Tuesday, Wednesday, or Thursday is best.
  3. Promote your event using social media, your email marketing list, and your website. If you want to invite particular company representatives, use LinkedIn and an email finder to get in touch.
  4. Rehearse and prepare to deliver an amazing presentation.
  5. Leave room for audience participation and questions.
  6. End with a compelling call-to-action that directs participants to your squeeze page.
  7. Follow up with all attendees soon after the event.

The advantage of virtual events? You can reach people anywhere in the world!

Use lead magnets to grow your email list

The best way to market to someone is to get them into your email list. You can entice prospective customers to sign up by offering a lead magnet in exchange for their email address.

A good lead magnet might be:

  • A report or white paper.
  • An e-book.
  • A free consultation.
  • A short free trial period of your product or service.
  • Access to an online course or training video.

Build a great landing page to capture your leads’ email addresses, and make sure that your lead magnet delivers on the value you promised. Once a lead is in your digital marketing funnel, you can target email campaigns accordingly.

Focus on SEO

Search engine optimization (SEO) is one of the main sources of organic (unpaid) traffic to your website. Therefore, make sure you are regularly putting out fresh content and optimizing it for the right keywords.

Here are a few ways to optimize your site:

  • Use the relevant keywords several times per piece of content (without keyword-stuffing).
  • Use alt tags on all images.
  • Optimize your page load speed.
  • Use plenty of internal links.
  • Offer to write guest posts for other sites in your niche in exchange for a high-quality backlink.

It takes time to see results from SEO, but every step you take to optimize your site and content will get you closer to achieving your goals.

Step up your PPC advertising

Many businesses are cutting their advertising budgets right now in an attempt to save money. This is short sighted and a poor strategy. If anything, you should be increasing your marketing during this challenging time.

If you’re not already doing pay-per-click (PPC) advertising, it’s time to start. If you are, step up your efforts. Here are some best-practice tips to help you:

  • Undertake robust keyword research. Aim for high-volume search terms with low competition scores. The Keywords Everywhere plugin can help you with this.
  • Check out what your competitors are doing and use this to inform your decisions.
  • Use an appropriate landing page for each audience segment and set of keywords.
  • Use ad extensions to include information like pricing, contact details, and review scores.
  • Monitor your campaign at every step so you can amend and adapt it as necessary.

People who click PPC ads tend to be highly qualified leads and often ready to buy. That’s why it’s a channel that you can’t afford to ignore.

Make sure your marketing is still relevant in the current situation

Are you using the same marketing copy and images you used before COVID-19? In many cases, that is a big mistake. It signals to your customers that you are not aware of, or choosing to ignore, the seriousness of the crisis.

Therefore, ensure your marketing reflects the current reality. That doesn’t mean you have to reference the pandemic in every piece of copy, of course. But you should be cognizant of the fact that we are now living in a world where many people are staying at home more, traveling less, working remotely, and experiencing anxiety about their health.

Reaching your customers during COVID-19

The pandemic has changed the way we do things, but life — and your business — must continue. Follow these strategies to let your prospects and customers know that you are still there for them during this time.

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Infographic: The power of mobile messaging

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Every year, companies invest millions of dollars to better understand and serve their customers. All that investment either succeeds or fails at the moment they interact with a customer.

Each interaction is a moment of truth.

Mobile communications are growing rapidly, and mobile interactions are becoming the most effective means of real-time interactive communication to deliver that moment of truth. Customers are now dictating where and how businesses communicate with them and not the other way around. Learn more with this infographic.

Infographic courtesy Soprano Design

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The right marketing strategies for keeping new customers your brand has acquired during COVID-19

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Your brand may have picked up some new audience segments during the COVID-19 crisis. This is a widespread trend: a study by McKinsey finds that 75% of U.S. consumers have tried a new way of shopping during the pandemic, with 36% of consumers reporting they have tried a new product brand. What’s more is that 76% of surveyed U.S. consumers say they have purchased new products from brands during the pandemic due to deals they’ve received from brands, according to new research from Valassis. Plus, data from Morning Consult shows that 46% of Americans surveyed report they don’t miss certain product brands they were previously loyal to.

The crucial takeaway here: this is the perfect time for you to convince those new consumers that your brand has the features they want for the long term — do it effectively and you can hang on to your “COVID customers” for good, expanding a new demographic widely. So, what’s the smart way to accomplish this?

Focus on the following five key areas to impress your new audience now and preserve their loyalty as the pandemic continues — and beyond:

Pricing transparency.

Since deals are a huge driving force when it comes to your customers’ purchasing decisions at the moment, you want to make sure you’re meeting their needs and wants in this regard. Keep your pricing policies fair and low, and emphasize that fact in all of your campaigns and social content.

Flash sales, BOGOs, promo codes, deep discount offers across your social platforms — you need to push all of this, and often, for great results. Make your deals fun, promote them consistently and boldly, and make them easy to use — no “catches” when a consumer tries to redeem an offer.

Surveying smartly.

Use your influencers, your audience feedback, and your customer service interaction data to find out the unvarnished truth when it comes to what your new customers are loving about your brand and what they don’t like. Make adjustments wisely and when necessary — but don’t do any major overhauling right now.

Tweaks? Sure, if your customers are pointing out they’d like small improvements to your products and services or if you see that to be necessary. But consistency is the magic word here — keep your core values intact, and stress them positively.

New product rollouts.

Don’t cancel that launch you planned if you have the resources to go through with it. Your new base will feel reassured and excited when they see you bring them a product that’s new, effective and budget-friendly at this tough time — it’s a “day-brightener,” and consumers need that boost right now.

Supply chain checks.

Identify problems, delays or shortages, address them as best you can, and be upfront with your audience about any back-order issues so they don’t feel frustrated or out of the loop. Don’t worry that your honesty will be a turn-off — your new customers will appreciate your candor, and it will help them trust future messaging you do.

Ease of service.

Make every interaction your new customers have with your brand — from complaint resolution to a simple visit to your website — simple and positive. Take the stress, guesswork and complications out of your process and your consumers will love your brand even more — and in the future!

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Will more hotels get into the home-sharing business?

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There is no doubt that COVID-19 has had an unprecedented impact on the travel and tourism industry. With massive layoffs and closures, many hospitality professionals have noted that they had never seen such a detrimental event to the industry in their careers. Nobody knows when the recovery will take place.

Yet, there is at least one exception. The home-sharing sector has already rebounded.

Airbnb booking is up and ready for an IPO

When the pandemic hit, Airbnb reported a 90% drop in booking, or a $400 million adjusted loss in the second quarter. Then, Airbnb laid off 7,500 employees, or 25% of its workforce, and cut its marketing budget by 14% from the last year.

Now, when hotels are still struggling and running at a below 50% occupancy, Airbnb booking has already bounced back. For example,

Marriott’s home-sharing arm is doing well

Marriott launched a pilot program that provided home rental management service in April 2018. A year later, Marriott debuted the Homes & Villas division, with the following unique features:

  • The site offers premium and luxury private home rentals only.
  • All properties are managed by trusted partners, who provide professional cleaning service, 24/7 assistance, high-speed Wi-Fi, and premium linens/amenities.
  • Guests can earn and redeem Marriott Bonvoy points.

Like Airbnb, Marriott Homes & Villas are doing very well, especially in the summer months. For instance,

  • The number of listing properties grew from 2,000 when it started to over 10,000 in 250 markets.
  • The booking was up 700% over last summer.
  • The revenue increased by more than 800%.

Nevertheless, the number of 10,000 properties is still too small compared to the 7 million-plus Airbnb listings in over 220 countries and regions. Likewise, Booking.com has more than 28 million listings, or more than 6.2 million homes, apartments, and other unique places, in 226 countries and territories.

Marriott International itself manages 1.38 million hotel rooms of more than 7,300 properties in 134 countries and territories. That means, Marriott’s home-sharing inventory accounted for less than 1% of its portfolio. The gain of Marriott Homes & Villas is unlikely to offset the lost revenues from Marriott hotels during COVID-19.

Will more hotels show interest in the home-sharing business?

The hotel industry had a record-high performance in 2019, running a 66.1% occupancy at $131.21 average daily rate. At that time, not every hotel showed interest in the home-sharing business.

Hilton CEO Chris Nassetta, for example, did not worry about the competition from Airbnb. Last year, when Marriott launched Homes & Villas, Nassetta wanted to remain focus on Hilton’s core business. He was not interested in the home-sharing sector.

Wyndham and Hyatt also attempted to get into the business. Last year, Hyatt CEO Mark Hoplamazian admitted that home-sharing experiments “challenging” and not “sustainable.

Now, when hotels are still struggling, and Airbnb is doing just fine, will more hotels become interested in the home-sharing business? What will be hotels’ advantages and challenges as they get into the home-sharing business?

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