Airbnb's Listing Lifetime Value Framework: A Deep Dive

Airbnb developed a framework to estimate listing lifetime value (LTV) to enhance user experience. The framework calculates three types of LTV: baseline LTV, incremental LTV, and marketing-induced incremental LTV. Baseline LTV predicts the total bookings a listing will receive in the next 365 days using machine learning and listing data. Incremental LTV accounts for booking cannibalization between listings. Marketing-induced incremental LTV measures the additional value generated by internal marketing initiatives. The article discusses challenges like accurately measuring baseline LTV, handling incrementality, and dealing with uncertainties (e.g., the COVID-19 pandemic). Airbnb uses LTV to identify high-value listings, improve host recommendations, and evaluate marketing campaign effectiveness.