What can real estate learn from Airbnb’s shake-up of hospitality?
Real estate is in the midst of disruptive innovations ranging from big data to artificial intelligence to virtual reality. As consumers grow increasingly savvy (and ever more armed with real-time data and insights), traditional agents and brokerages are being challenged to not only keep pace, but also to continuously innovate in the increasingly competitive race for client mindshare.
Of course, this type of upheaval isn’t new; who doesn’t recall Airbnb’s recent shake-up of the hospitality industry?
“It’s time to embrace widespread disruption, lean in to uncomfortable change, and adopt a new outlook and practices.”
Hospitality and real estate share commonalities, including an adherence to well-established practices rooted in tradition. Perhaps it’s time to consider what traditional real estate organizations can learn from Airbnb (as well as the hospitality industry’s response). And perhaps, it’s time to embrace widespread disruption, lean in to uncomfortable change, and adopt a new outlook and practices.
In this article, we’ll take a look at how Airbnb forged an entirely new experience in hospitality (which in turn created a new traveler mindset), and how the hospitality industry was able to not only adapt, but also leverage its inherent strengths. We’ll draw some parallels to uncover how these learnings might apply to us in real estate.
Prioritizing experience over transaction
Airbnb’s game-changing move was manifesting the traveler’s latent desire for an authentic local experience. They made a risky bet that a significant market existed for a new type of traveler: one who would reject the vanilla requirements for safety, cleanliness, or cost-effectiveness that a hotel chain might offer, in favor of hyper-local, personal, hosted accommodations. Then, they empowered hosts to deliver on this experience from initial website contact, all the way through to writing a review at the end of the experience. By focusing on the total experience of a personal stay over the brief sterile transaction of a hotel night, Airbnb won hearts and minds—while ushering in a new class of travel consumer.
Similarly, in real estate, we have the opportunity to promote the total experience over the transaction. For many, buying a home is a singularly defining event in one’s life.
The process is not only procedurally complex, but potentially charged with emotions. Buyer and seller sentiments fluctuate from moment to moment. From the pre-research phase to closing, home buyers and sellers would benefit from the personal, attentive care that a trusted real estate agent offers.
“Consumers continue to view agents as trusted advisors and a critical component of the home buying and selling process.”
And based on consumer behavior, most people see it this way. Consistent across all generations, 87 percent of all buyers purchased their home through an agent and 89 percent of buyers would use their agent again or recommend their agent to others, according to the 2017 National Association of REALTORS® Profile of Home Buyers and Sellers. These numbers underscore that consumers continue to view agents as trusted advisors and a critical component of the home buying and selling process.
Current technology and data capabilities can further enhance the value of a trusted agent. In 2017, Realogy invested approximately $200 million in technology alone, focused on arming its 192,000 agents with the very best in data, technology, training and resources to help them continually improve in their ability to serve consumers and make the most of their valuable time.
Realogy is constantly exploring new tools and solutions – such as a Virtual Assistant via Alexa voice integration and a mobile app to pay agents electronically from the closing table. In 2019, there will be a projected 76 million users of voice-enabled digital assistants.
Our AI and Machine Learning capabilities are also expanding, allowing Realogy to generate vital insights from its vast scale of data. Realogy has used machine learning to forecast performance for 1.3 million agents based on over 800 variables, analyzing 14 years of historical agent data including agent production, urban characteristics and characteristics of homes transacted.
Together the brands and businesses of Realogy serve more aspects of the real estate transaction than any other entity, lending itself to tremendous size and scale.
Seamlessly integrating the customer experience—both online and offline
When you consider Airbnb’s success, brand experience is user-centric, streamlined, and highly personal. From the first website interaction, to host communications prior to stay, to an on-site welcome, the brand remains in lock-step with what guests want and have now come to expect. In this manner, they retain strong brand equity across all touchpoints.
Real estate agents can adopt a similar approach to integrate the agent and client experience across digital and human touchpoints. Today, multichannel media like social media, video marketing, and blogs offer agents expanded options for building relationships. Some CRMs not only provide agents ready-made design tools to create messages, but also offer the flexibility of selecting the medium of distribution once the message is completed—social media, email, or print.
Agents can further foster a 360-degree client experience by cross-promoting and complementing analog interactions (like open houses and phone calls) with ongoing digital outreach and vice versa. In-person meetings should be used to establish the rapport that makes ongoing digital communications welcome; digital communications should inspire the desire to attend in-person events. Brokers can also incentivize and reward agents that strive to create this holistic customer experience. As a start, this can be as simple as ensuring that the communication flow from website to service request to open house back to the website is one wherein all touchpoints reflect the agent’s personal voice and brand.
Now that we’ve considered how agents can learn a few lessons from Airbnb’s shake-up, let’s examine the flip side of this battle. How did the hospitality industry fight back against Airbnb? By identifying and doubling down on its own core strengths.
Highlighting the communal experience as a key differentiator
Hotels have always had lobbies, but the concept of a communal space that radiates from the lobby is one that is still relatively new, and in the midst of innovation. No longer vast, empty marble spaces, hotel lobbies today blend reception and concierge with business center, bar, and coffee shop to create a unique “together alone” communal space that Airbnbs lack.
In real estate, that familial sense of community is exactly what an agent offers beyond a sterile, transaction-driven website (which is the old-school lobby in this analogy). How many times have we heard, “Without my agent, I would’ve never known about that [community garden/artist open studio/gelateria/other favorite hidden gem] in my neighborhood?” How else might a parent new to the area learn about affordable after-school or daycare options? Or which roads are frequented by speeders? Agents offer—and must promote—those unique insights which only they possess, which no amount of online research can uncover or vouch for.
Personalizing the journey to a life decision, augmented with current technology
Several of the tangible (and less tangible) benefits that only an agent can offer include:
- Hyperlocal insights into the property, neighborhood and community—authentic in a way that aggregated data alone can’t match. Simply put, publicly available data on its own can’t compare to the analysis of that data and the deep insights and experience that agents bring to the table.
- A network of established and reliable service providers, contractors, designers, etc. that have a strong history of performance, essential for that first-time home buyer or seller.
- A locally-optimized strategy for getting a home buyer’s bid accepted or an experience-based sense for knowing which buyer will come through.
- Objectivity and composure while navigating an emotionally charged process and journey. Word-of-mouth referrals for agents remain salient because we prioritize the advice of our friends and family when it comes to major life decisions.
Ultimately, real estate agents offer credibility and confidence without artifice. On top of that, the brokers behind the agent offer representation, protection in the form of fiduciary law and operational expertise, above and beyond an online transaction. In hospitality, this would be the equivalent of consistent safety and health standards offered by a hotel, something that many Airbnbs cannot guarantee.
There is no doubt that the industry will continue to experience upheaval and change, and that buyer and seller expectations will fluctuate in accordance. To thrive, real estate agents and brokerages can take a page out of learning from Airbnb’s disruption of the hospitality industry to prioritize the customer experience. Focusing on deeply integrating the technology and service provider experience offers a unique opportunity for real estate agents to capitalize on and promote the innate strengths that they have developed and the rapidly evolving needs of the consumer.
Jamie Wilson is president and chief executive officer of ZapLabs LLC, the innovation and technology hub for Realogy and its world-renowned real estate brands. ZapLabs was formed in June 2016 after previously operating as the ZipRealty technology development group. Jamie was previously president and CEO, and senior vice president for technology of ZipRealty.