Taco Bell has its own hotel.
The news was unexpected to us, and apparently the rest of the world, too, when, back in May, Taco Bell announced it would be opening a hotel and the news went viral. While it turned out they weren’t exactly building a hotel from the ground up (they would take over a hotel in Palm Springs, California for a weekend), it was still a surprising, immersive marketing stunt from a brand whose last great marketing stunt was probably the introduction of a talking chihuahua into the cultural zeitgeist two decades earlier. Even more surprising: when Taco Bell opened up reservations for the hotel at $169-per-night, they sold out in less than two minutes.
Taco Bell the hotelier isn’t alone. A growing number of retail brands have recently made the move into the hospitality world, building hotels and hospitality experiences of their own…
- The furniture store West Elm is launching five boutique hotels in 2020.
- The Shinola watch company opened its first hotel in Detroit earlier this year.
- Bulgari has six ultra-luxury hotels open in major international destinations (think Milan, Dubai, Bali) with plans to open more in the upcoming years.
- Ikea has its own hotel in Sweden featuring just what you’d expect: Small, efficient rooms furnished entirely with Ikea products.
- Equinox gyms just opened their first hotel in New York City, with locations in other major U.S. cities coming later this year and in the future.
And that’s just a sampling of the companies who’ve jumped on the retail-becomes-hospitality trend. They all have one thing in common: they’re all big brands with wide name recognition and access to lots of capital. Can a smaller eCommerce brand without an eight- or nine-figure marketing budget make the jump into hospitality marketing?
A handful of them already have. How? Airbnb.
In this article, we take a look at some small-to-mid-sized eCommerce and retail brands that are leveraging the power of Airbnb as a marketing tool. We also get into the reasons why brands are using hospitality as a new avenue to connect with customers and build brand loyalty, and how to know whether it’s a good fit right now for your eCommerce business.
The clothing brand Marine Layer has three apartments on Airbnb—all located above their retail stores in major cities. Their apartments, in Chicago, New Orleans, and Portland, Oregon, are styled to match the aesthetic of Marine Layer’s clothing lines. People who stay at the Airbnbs (which run about $200 to $300 a night) receive a 15 percent discount at the stores below. Marine Layer does not have an official partnership with Airbnb; they’re operating just like any person renting out their place on the site.
Unlike Marine Layer, the eCommerce furniture brand Floyd doesn’t have any brick-and-mortar retail stores (although they do showcase their products at some stores including, coincidentally, a few West Elms). For their Airbnb strategy, they’ve partnered with existing Airbnbs that have, in their words, “stunning architecture, great design, [and] incredible locations” to completely furnish those dwellings. They also promote the Airbnbs heavily on their website. (The thirteen locations, at the time of this writing, are showcased on a page accessible via a top level menu option.)
Rather than offering Airbnbs in trendy urban areas, fashion and decor company Utility Canvas found a location in a popular vacation spot. Utility Canvas has a six-person beach house in Vieques, Puerto Rico which they rent at only $85-per-night. Similar to Floyd’s approach, the beach house is stocked with Utility Canvas’s products, which run the gamut from placemats and aprons to linens and pillows.
Casa Mami takes the eCommerce Airbnb to the next level—the brand’s entire existence centers around the Airbnb. Casa Mami is a house in Pioneertown, California, that was renovated and furnished by a pair of designers. And the entire house serves as a showroom—complete with an accompanying eCommerce store where guests can buy virtually every product showcased in the house.
Hospitality-as-marketing is becoming an increasingly popular strategy for lifestyle retail brands. So far in this article alone we’ve identified nearly a dozen brands using the strategy (and there are many more, like Versace and Fendi). But what is driving the trend? Let’s take a look at why brands of all sizes are increasingly turning to hospitality as a marketing opportunity—and why you might consider using Airbnb for your eCommerce brand as well.
Showcasing your products
The most obvious advantage of running an Airbnb is you get to showcase your products. eCommerce retailers are constantly looking to bridge the gap between digital and tactile, whether that’s through showrooms, pop-ups, partnering with larger retail stores, or opening their own brick-and-mortar locations. When people stay at your Airbnb, they get to experience, touch, and hold all of your products.
If you sell furniture, they get to try it out; as one of the founders of Floyd said in an interview with Architectural Digest, “We were excited about the idea of showing [our furniture] by giving people the opportunity to check out Floyd where it’s really meant to be, in the home.”
That’s an idea that can translate to a lot of products. If you sell decor, guests get to see how it looks on the walls. If you sell bathrobes or towels or cookware, they can try them out. If you sell electronics, guests can fiddle with them. Even if you sell something that less obviously belongs in a guest room, like honey, they can benefit by taste testing it when they’re having their breakfast.
Showcasing your brand’s lifestyle
The benefits of hospitality marketing, however, transcend merely showcasing products. The brands that enter into our popular consciousness don’t just sell products—they sell an entire lifestyle. It’s why all of the brands above carefully curate every item and every design touch in their hospitality endeavors—it’s all about immersing a customer in their lifestyle.
Retail expert Bruce Winder told Travel Weekly, “Companies are trying to get consumers to experience their brand. To thrive as a retail brand, you need to have a store that offers community, trial, education, expertise or inspiration, and [hospitality] can really create all of that… [hotels] the ultimate experiential stores.”
Marine Layer’s brand is fun, retro, casual, and trendy but accessible. Their Airbnbs reflect that. The decor has ‘70s design touches but still feels modern. The colors are bold and bright, mimicking the prints on the clothing they sell. The apartments are stocked with designer touches like vintage board games, Polaroids on the walls, minibars, glossy books, and record players with classic albums that drive home the lifestyle Marine Layer is selling. The locations are in the trendiest areas in major cities. It’s experiential marketing at its peak—you’re not just at a random apartment with a few Marine Layer shirts in the closet.
Lifestyle brands are especially important to millennials. They outright reject traditional marketing (one study found 84 percent say they don’t like nor trust it) and expect more engaging experiences. They gravitate toward “authentic brands” that match their values and fit in with their personal identity. Brands can use Airbnb to immerse customers, especially millennial customers, in an experience that jives with how they see their own personal sense of style and self. And even if they don’t buy something from the brand that day, as one retail consultant put it, “They’ve at least established a unique emotional connection to the brand.”
Standing out in a crowded marketing landscape
Advertising is evolving as there are a seemingly infinite number of businesses trying to get eyes on their messages—and fewer centralized places than ever to find them. Twenty-five years ago, there were TV shows regularly getting tens of millions of viewers. (For perspective, an NBC sitcom that no one remembers called Madman of the People in the 1994-95 TV season and got roughly 20 million viewers per episode. Not a single show on TV this year reached that many people—not even Sunday Night Football.)
Online advertising is also changing. Between ad blindness, ad blocking, influencer burnout, and a growing resentment to the hyper-targeted (and sometimes so targeted they feel invasive) ads from Facebook and Google, online advertising now takes more strategy and effort than in the past.
Hospitality-as-marketing is still a fledgling concept, one that grabs people’s attention, one that not every brand can or will do, and one that stands out in the crowded marketing landscape. It’s a form of marketing with a solid value proposition for both the company and the customer. The advertiser gets to have a customer fully experience their products and the essence of their brand, the customer gets a cool (and always Instagram-worthy) place to stay at a fair price without having advertising intrusively shoved in their face.
And about the “fair price” aspect—while the odds are you won’t make a fortune off your brand’s Airbnb, this is a form of marketing that’s subsidized by paying guests. Marine Layer is seeing bookings for 300 nights a year; that certainly cuts well into the costs associated with running an Airbnb. (That 82 percent occupancy rate is above the average for most U.S. cities, indicating that there’s a non-zero chance this is a marketing strategy that effectively costs nothing for some brands.)
While there are clear, strong benefits of running an Airbnb as a product-and-lifestyle showcase, it’s certainly not something every brand can just leap into tomorrow. Here are the questions you should ask yourself before you consider taking the plunge.
- Do we have a lifestyle brand that warrants it? Not every company that launches immediately becomes a lifestyle brand. That requires strategy, positioning, content, dedication, and effort. Until you have your brand’s lifestyle clearly defined—defined, say, to the point where you could go to a furniture store and identify the 10 pieces that are perfect matches—you’re probably not ready to showcase it in an Airbnb.
- Can we afford it? While, yes, your customers will subsidize some of the cost through their rental fees, starting and running an Airbnb isn’t cheap. You’ll need to rent or buy a space to use, and it may need to be in an expensive and/or trendy area in order to fit your brand or get worthwhile occupancy rates. Then you’ll need to carefully design and furnish it—every single design touch matters. After you begin renting your space out, you’ll need to manage it, deal with customers, handle cleaning and restocking, and do all of the other little things that come with running an Airbnb. That’s a lot of time and cost to take on with a sizable upfront outlay.
- Can we start with an easier path to hospitality marketing? Is there another way you can showcase your brand to dip your toe in hospitality marketing? Take Floyd, for instance, which made deals to put its furniture in some Airbnbs and promote them. With that strategy, they save themselves a lot of the hassles and expenses of running the Airbnbs. They trade control, however, and while we don’t know the specifics of their deals, they’re at best splitting the revenue from renters (and at worst, getting none of it to help subsidize the endeavor).
- Can you make something unique? For your Airbnb endeavor to stand out, you need to offer an experience that only your brand could do. Marine Layer’s founder, Mike Nathenshon, told Vogue that’s one of the ultimate sticking points for other brands attempting to pull it off. “We want unique spaces, which is partially one of the challenges and why a lot of brands don’t do it. You can’t have an Airbnb in a mall.”
- Can we deal with a potentially low ROI? Even if everyone who stays at your Airbnb buys a $20 t-shirt at the end of their stay, that’s probably not going to cover your expenses. If you sell a higher ticket item, like couches, the ROI could be higher—but the number of people who buy will be lower. Sure you might reap ancillary benefits, like increased social media exposure or some earned media coverage, but those things may also not lead to direct sales. Hospitality marketing is a long-term play, one about becoming a lifestyle brand, forming deep customer relationships, standing out from the crowd, and becoming more than just a “store.” Those things can pay off greatly in many ways—but an instant explosion in revenue is likely not one of them.
There’s a growing trend in retail where large brands are starting to get into hotel business, and smaller brands have begun renting out Airbnbs, all as a means of showcasing both their products and their brand’s entire lifestyle and vibe.
There are some significant benefits to using Airbnb as a new marketing channel for your eCommerce business.
- Showcasing your products. You can bridge the gap between online shopping and in-person shopping by stocking an Airbnb with your products, allowing your customers to fully experience them.
- Showcasing your lifestyle. A brand, especially one targeting millennials, needs to be more than just a collection of products—it needs to encapsulate a lifestyle, one with which its target customers identify. By running an Airbnb, you immerse your customers in your brand’s lifestyle, allowing you to form a unique connection with them.
- Standing out in the marketing landscape. Advertising continues to grow and change, and more unique marketing endeavors can help a brand stand out. Hospitality-as-marketing is new enough that it still fits that bill.
But is opening an Airbnb the right move for you? There are some big considerations before you take the leap.
- Is it right for your brand? Is yours a lifestyle brand, ready to showcase not just its products but to translate its very essence into a rental space?
- Can you afford it? It isn’t cheap or easy to find a property to buy or rent, furnish it, serve guests, and maintain it.
- Is there an easier path for you to get started in hospitality marketing? For example, furnishing other people’s Airbnbs.
- Can you make something unique? Can you offer an experience that no other brand could?
- Can you handle the low ROI? Your Airbnb is a long-term plan for brand and relationship building—but probably won’t pay off huge right away.