How the sharing economy builds trust with guests (and what hotels can learn)

  Posted in Sales + Marketing

You may think building hotel brand trust is tough – but how does it compare to the sharing economy? And is there anything your property can learn from services like Airbnb?

Conceptually, the sharing economy seems like a brilliant idea making life easier, more interesting, and more exciting for travellers and other consumers.

When you think more carefully though, the risks become apparent. The sharing economy depends on strangers placing trust in each other and taking the risk of that trust being betrayed.

Some services carry more fear than others obviously. You might not worry about a stranger borrowing some gardening tools, but trusting a stranger to babysit? Then there’s platforms like Uber or Airbnb where you are, in some respects, placing your personal care into someone else’s hands. The challenge for these companies is building a brand that people will feel safe interacting with and eliminating the chance of anything going wrong.

The balance that needs to be struck

The appeal of many sharing economy services is the convenience they provide, and the relaxed streamlined nature of them. At the same time, this is also where issues can arise.

There’s always going to be some doubt, these businesses are turning the way we purchase and consume upside down.

Sign-up processes on both ends needs to be optimised. Make them too long or prescriptive and people will give up halfway through, but make them process too lax and nobody will trust the service is caring for its members. Personal safety is paramount so the stringency of background checks should be maximised and made a point of. Afterall, if you fall asleep in your Uber or leave valuables in your Airbnb and your driver/host can’t be vouched for, it’s a scary proposition.

Key indicators of trust

A study from New York University found that trust for collaborative consumption platforms like Airbnb and Uber is lower than exchange platforms such as eBay, and any online retail or non peer-to-peer (P2P) platforms. To put it in numbers; half (54%) of the users rated their trust in P2P collaborative consumption platforms (Airbnb, Lyft, and Uber) to be on the lowest level, while 19% of users of P2P exchange platforms of the first generation (eBay) did so, and only 6% of large online retail services and non-P2P platforms.

However, it also revealed three trust management measures had a positive effect on ‘trust in the platform provider’. These were:

  • Reliable insurance cover
  • Simultaneous reviews
  • Large network enabling offers worldwide

Because platforms like Airbnb requires the sharing of literal personal space, it can be much harder to manage trust, even though it’s quite often the case that host and guest will meet each other and this would seem to foster more trust than a simple online transaction.

But it’s that ‘closeness’ that makes the gap harder to bridge. The flipside is that when a system is designed well, the trust built between users could effectively be more than it would be with a colleague. This is because with the right profiling and screening, the stranger renting out their home or car has passed more tests than your workmate or neighbour, who you simply trust because of proximity and familiarity.

How is Airbnb performing?

Airbnb is working very hard on its brand and is making constant strides to increase the level of security and trust in its service. If we look at the three metrics mentioned above:

Reliable insurance cover
Airbnb insurance cover (up to US$1m) automatically kicks in with each transaction to protect against personal injury and property damage. Insurance is extremely relevant and provides users with the feeling that they are prepared for any contingency. Host protection on Airbnb is free and all information on what’s covered can be found here.

Airbnb also tries to give guests some peace of mind by strongly advising that hosts don’t cancel bookings once they are confirmed, as this could leave travellers stranded and exposed. Cancellation fees are in place and will increase if the regularity of cancellations also increases.

Automated reviews are generated for cancellations and if bookings are cancelled at the last minute guests can leave a public review on the hosts profile. For a full list of cancellation penalties click here.

Simultaneous reviews
This is a concept that Airbnb is built upon. Guest and host are not able to view each other’s review before posting their own, ensuring that comments aren’t skewed in any way. There is then a two-week period where guest and host can reply to reviews. This gives the platform a lot more transparency and allows other users to make a much more educated decision about if they want to stay at a particular property, or host a particular guest.

Other measures in place to ensure fairness include:

  • Verified identification
    Hosts can require guests to hold verified ID badges before they accept a booking.
  • Guest profiles
    Completed guest profiles, including pictures, enable hosts to investigate the suitability of guests.
  • Social connections
    Airbnb users can connect Facebook, Google+, and LinkedIn. Hosts can tap into this information to see other reviews that have been posted, see mutual friends, and get a sense of the person who is coming to stay at their property.

Large network
Guests are certainly not limited for choice when it comes to Airbnb. Operating in 191 countries, if a guest has doubts about a property there will always be more to choose from and the same applies to hosts.

What can hotels learn about building trust?

The approach should really be no different for hotels. While the trust for a hotel brand will be inherently higher than an individual renting an apartment, car, or other service, hotel businesses still need to work hard.

Travellers will trust your hotel when you show you’re trying to be the best in your area, make a point of trying to outdo your competitors and the effort won’t go unnoticed. This means delivering on a commitment to your guest.

If you promise a five-star stay, then the guest expects that to be the case. If it isn’t they have a right to leave negative reviews and demand compensation, lest your business suffer more revenue loss. If you don’t reply to your reviews or fail to take ownership of complaints, what are researchers going to think?

Guests trust their peers so you need the vast majority on your side if new travellers are going to trust your hotel with the responsibility of making their holiday or trip enjoyable and hassle-free. Simple things like 24-hour support, quality guarantees, and fair terms and conditions will go a long way to making guests feel more comfortable staying at your property.

For hotels, it comes down to four important steps:

Perfecting these will stand you in good stead for capturing return bookings and trusting customers.

 

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