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Francisco loft, founders Brian Chesky and Joe Gebbia turned their living room into a mini bed and
breakfast, hosting three guests from a local sold-out trade show where lodging was scarce. The
original design for AirBed and Breakfast provided temporary living quarters, breakfast and business
networking opportunities for those who were unable to book a place to stay for local events due to
demand.
Having grown quickly from a niche site providing accommodations for high profile events, Airbnb
turned the hospitality and travel industry on its head and generated a great deal of press and brand
recognition in the process. Since its humble beginnings, Airbnb has made no secret of its heavy use
of data science to build new product offerings, improve its service and capitalize on new marketing
initiatives. Heres how they do it and what you can learn from them:
Data is the Voice of the Customer, Data Science is the Interpretation of that
Voice
Riley Newman, former head of data science at Airbnb, explains that the company looks at data as
the voice of the customer, and data science as the interpretation of that voice. Whats more, Airbnb
data scientists are not sitting around, holed up in their cubicles poring over spreadsheets. Instead,
theyre actively engaged and organized to partner directly with engineers, designers, product
customer groups as well. Theyve actively looked to hire female data scientists and take great strides
to ensure that there is no unconscious bias in their hiring practices. Much in the way one would
approach conversion optimization, they looked at the top of their hiring funnel and found that,
historically, about 30% of their applicants were women. That meant that the opportunity to include a
something young girls dream of. There are plenty of opportunities sprouting for girls who code, as
well as women engineers, but very little in the way of data science. So Airbnb created it through a
series of community events and talks. Women from all types of data science backgrounds were
invited to speak, collaborate and mingle. The events were sold out.
However, they still werent done. They continued to scrutinize their interviewing process to ensure
that applicants werent just a match analytically and communicatively, but culturally as well. They do
this through a set of one-on-one conversations, a presentation and a take-home challenge. For the
conversational point, the conversation was strong, but very different for both the presentation and
Much as a company would analyze their customer journey to improve conversions, Airbnb took it
upon itself to look at every point in the hiring journey, from candidates displaying poor or junior
communication in front of a panel of all-male data scientists scrutinizing their approach and making
them nervous, to potential bias in grading the take-home challenge because of subjective views of
success.
Airbnb credits diverse hiring as a key motivator in its product growth
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The end result was that they were not only able to add more female data scientists to their rosters,
but the quality and experience of applicants was also greatly improved.
Of course, its one thing to apply conversion optimization practices to people, and another thing
Or is it really so different?
amaze and delight customers at every step. But it wasnt always such a walk in the park. Originally,
Airbnb didnt know what kind of data to give customers, so it settled on a model which returned
the highest quality listingswithin a certain radius based on the users search.
As more users came to the site and Airbnb acquired more data, it was able to replace its basic
[W]e decided to let our community solve the problem for us. Using a rich dataset comprised of
guest and host interactions, we build a model that estimated a conditional probability of booking in a
location, given where the person searched. A search for San Francisco would thus skew toward
neighborhoods where people who also search for San Francisco typically wind up booking, for
You can read how their search models have evolved on Airbnbs own blog here.
Airbnb also used data to tailor the search experience demographically. It noticed back in 2014 that
users from certain Asian countries typically had a high bounce rate when visiting the homepage.
Analyzing the data further, they discovered that users would click the Neighborhood link, start
The data scientist who discovered the problem showed it to the engineering team, who created a
redesigned version for users from those countries; replacing the Neighborhood links with the top
traveling destinations in China, Japan, Korea and Singapore. As a result, they saw a 10% lift in
those wanting to rent out their place. One of the data scientists, Bar Ifrach, who works at Airbnb
discovered the site through a friend. His friend offered a nice apartment for people to stay in while he
was traveling during grad school break. The friend wanted to fit as many bookings as possible during
the 1-2 weeks while he was away. He would accept or reject applicants based on how much it would
Ifrach remembered this particular scenario and used it to create a miniature research project of his
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In applying what Ifrach learned from his friend to the host base as a whole, Ifrach found that hosts
were more accepting of requests that fit into their calendar while minimizing those gaps:
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But did this kind of information apply to every market? Or did big and small markets differ? The
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Throw in hosts specific (personal) preferences for last minute versus plenty-of-notice notifications
and what started as a small research project turned into a full-blown machine learning algorithm.
Ifrach partnered with an Airbnb engineer to create an application that would essentially personalize
results based on both host and guest preferences to ensure a more accurate fit.
Here, Airbnb data scientists looked at everything from hosts prior acceptance and decline decisions
to the particulars of the trip itself. Rather than clutter the algorithm with too much noise, they created
their own set of filters and applied them using a flow chart like the one below:
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In order to test how it worked, they conducted an experiment that used probability as well as a
ranking algorithm that took other preferences into consideration. The main goal in this case was to
check the likelihood that a guest requesting accommodation would get a booking. As a result of
applying these new filters and preferences, they enjoyed a nearly 4% lift in booking conversion as
well as a considerably significant increase in the number of successful matches of guests and hosts
guests are traveling to their host, being welcomed, settling in and exploring. These are the things
that can make or break a user experience with the site, and are incredibly valuable to Airbnb itself in
They measure this experience through the use of a Net Promoter Score or NPS, a customer loyalty
metric introduced back in 2003. The Net Promoter Score asks, in essence, How likely are you to
recommend Airbnb?
Because Airbnb wants the likelihood to recommend to make accurate predictions, they control for
Overall review score and responses to review subcategories on a scale from 1-5.
Trip destination
Guest origin
Trip length
Number of guests
Airbnb acknowledges that other kinds of loyalty may be in play (like word of mouth referrals) that
they cannot account for. Because reviews themselves are so important to the overall Airbnb
experience, the company wanted to determine if their Net Promoter Score (likelihood to
In this case, predictive accuracy plus likelihood to recommend, plus review subcategories were
tested to see how accurate they were. These were the results:
As a result of this study, Airbnb found that post-trip reviews (including the likelihood to recommend)
only marginally improved their ability to predict when users would rebook. Although reviews do much
more than just potentially predict rebooking numbers, and there are other factors from the Net
Promoter Score not mentioned here, the data science discovered that predicting rebooking using
these categories and the Net Promoter Score was only marginally improved at best.
In this particular case, were it not for data scientists and other team members delving in to do the
research on the accuracy of using reviews and the Net Promoter Score to forecast future bookings,
Airbnb would never have known if the prediction could have added to their improved guest
experience and thus, their revenue yet another example of data science helping to save hours of
time and money, even if things dont ultimately work out as intended.
experiments and conduct them regularly at every stage of development from conceptualization to
completion and beyond. In many cases, however, its difficult to tell just how much of an impact a
Airbnb has its own internal A/B testing framework rather than using an out of the box solution, since
there are some aspects of their business model and customer experience that make it more involved
than simply changing the color of a button and measuring what happens.
For example, users can browse Airbnb whether theyre logged in or not. This can make it a
challenge to tie actions to a particular user. Its also possible for them to browse on their mobile
device, then come home and complete the booking process on their home computer.
Furthermore, a successful booking depends on the guests request (and inventory) and how
And although theyve simplified the process quite a bit, their booking process is still quite complex.
Airbnb mainly looks at the conversion rate between searching and finally booking even though
Much of what constitutes a conversion in this case is a guest looking for a place to stay in a
specific area, and a host setting a price and the two coming together to agree and take care of the
necessary formalities. There are a lot of little road bumps inherent in a process like this, which is why
In another example, Airbnb (which provides professional photo services to hosts) felt that users
would have a better experience if listings were made available as beautiful, full-color photos in the
search results:
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In testing this new design, they discovered that it broke a crucial click-through action in some older
versions of Internet Explorer (to the surprise of absolutely no one). In fixing that issue, they were
able to continue with the testing as well as uncover many more important lessons on how change
results bias negatively influence their decisions. You can read the full design implementation blog
post here.
laws and regulations have yet to catch up. Case in point, the launch of its Price Tips feature a little
over a year ago. With Price Tips, a host can look at the calendar to see which dates are likely to be
booked at their current price, as well as which arent, and get suggestions.
Seems simple enough, right? But Price Tips pulls information from five BILLION training points as
well as leveraging machine learning and personal inputs to create its data. A lot of trends are easy to
recognize, such as big events like SXSW which can raise prices citywide. Other factors like
To help stay abreast of these changes and potentially earn hosts (and Airbnb) themselves more
money, the company developed Aerosolve, an open source machine-learning system that detects
patterns and attempts to use these to see why certain listings command higher prices.
In one example shared on Forbes, the Aerosolve model highlighted listings at a specific location
were commanding good prices and were also using the word sabbia. The location in particular was
Playa del Carmen, a resort town in Mexico, and sabbia is the Italian word for sand something
Of course, its one thing to recommend prices and another entirely to control them. Certain on
demand marketplaces, like Uber and Lyft have their hosts (or drivers in this case) set pricing,
a blurry legal move that Airbnb has shied away from up to this point. But any savvy business owner
would be remiss if they didnt see the strategy in Airbnb wanting to squeeze every drop of potential
results arent meant to overwhelm you. Instead, its meant to illustrate the importance of having this
raw information to learn from. When used correctly, and in partnership with many other departments
in your company, data science can be used as a springboard to create new hypotheses, test new
Embracing the science behind the data means not being afraid to dig deeper or even forge your own
questions when faced with a challenge that regular tests cant solve. But above all, it is meant to
help inspire you and remind you that a successful company is never content to rest on its laurels
its always learning, adapting and growing fueled by data and science.