Strategy question
Should Airbnb offer free experiences/tours?
- Airbnb
- Strategy
- Hard
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What this question tests
Tests a strategic trade-off between using free content to drive acquisition and engagement versus protecting the paid Experiences revenue line.
How to approach it
- Clarify the goal: marketplace liquidity and host acquisition, or incremental revenue, since the recommendation differs.
- Segment hosts into experienced pros and new hosts still building reputation, and guests into browsing tourists and ready-to-book travelers.
- Map how free tours could act as a funnel: new-host reputation building and guest discovery that converts to paid bookings.
- Weigh cannibalization risk against Airbnb's existing paid Experiences revenue.
- Propose free tours only for new or unverified hosts as an on-ramp, capped in volume rather than offered platform-wide.
- Define success as conversion from free-tour attendees into paid stays or bookings.
What a strong answer includes
- Distinguishes free as a marketing funnel from free as a core offering, recommending the former.
- Proposes free tours as a host-acquisition and reputation tool rather than a guest freebie.
- Uses illustrative numbers as assumptions: assume 5% of free-tour attendees book a paid stay within 90 days.
- Flags host trust and quality risk if free tours are seen as lower effort than paid ones.
Common mistakes
- Treating this as a guest-only question and ignoring host-side economics.
- Not addressing how Airbnb absorbs host time cost for free tours.
- Skipping the cannibalization check against existing paid Experiences revenue.
Likely follow-up questions
- How would you compensate hosts for running free tours?
- How do you prevent quality erosion versus paid experiences?
- What's the sunset criteria if free tours don't drive bookings?
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More questions from Airbnb
Learn the skill behind it
Chapters of the AI PM course that teach what this question tests.
- Chapter 4: Discovery and strategy for AI products
- Chapter 9: Prove it paid off: outcomes, economics, and pricing
- Chapter 14: Get the job: the AI PM interview loop