Two-sided Marketplace Strategy

In 2020, as the pandemic drastically affected travel, we witnessed a competitor hastily implementing a new cancellation policy. Rather than exacerbating disruptions for our suppliers, especially amidst facing 2.1 million cancellations and a potential loss of $126M, we realized the necessity of finding a mutually beneficial solution for our two-sided marketplace - fostering a network effect.

Opportunity

Due to the erratic and reactive nature of the reaction to the pandemic regionally, we needed a thoughtful solution, and yet we had to act quickly. Balancing the interests of our two-sided marketplace for Travelers purchasing vacation rentals and Hosts supplying the properties, was paramount.

Intermediary Action – While we worked on the strategy, we launched an intermediary communication with our hosts, which gave them the flexibility to negotiate fair outcomes. We began in-product testing to optimize the existing cancellation experience and gather sentiment.
Rapid Design Research And Testing – In parallel, we utilized rapid design and marketing research tactics, such as remote moderated studies and surveys. Meanwhile, our in-product A/B testing strategies delivered for us quantitative signal.
Working Group And Collaboration Team – We developed a working group that was given authorization to develop and execute a strategy. A collaboration team of leaders attended weekly stand-ups to provide prompt feedback.

Approach

Collecting the right signals, at the right time, allowed us to strengthen trust.

‍

A Guest Cancellation Survey That Generated Trust Signals

The final solution after several rounds of rapid user-testing was a signal capture from the guests and feedback loop to the hosts and their product page. This allowed us to create a powerful reward and penalty system that encouraged hosts to be flexible with cancellations due to COVID-19, and created a positive network effect in our marketplace.

By providing a much-needed trust signal to travelers who are considering booking future vacation rentals, we could accelerate our business recovery.

Results

A 60% response rate for traveler cancelation surveys led to the classification of 1.2M reservations known to be pandemic-related.
These affected 0.5M listings, across 0.25M accounts.
Solution was accurate for our two-sided marketplace, as demonstrated by the low-volume of customer service calls (<10% WoW) post launch.
10% increase in CVR for listings which received the trust symbol badging.
5M unique views of the badged listings
82% of Travelers and 81% of Hosts who experienced the badged listing solution, provided positive sentiment.
$18M net income, phase 1 testing

Conclusion

Given the overwhelming positive results, the program was rolled out broadly across all platforms. With the added understanding of host and guest trust and a trust signal model, the team embarked on a new journey to look more widely at how we identify both. This led to several new programs that leveraged these learnings in new ways to further deepen the relationship of our best guests and hosts.