Airbnb’s Olympic Partnership Has Generated ‘One of the Highest ROIs’ in Sports Sponsorship History

Airbnb’s Olympic Partnership Has Generated ‘One of the Highest ROIs’ in Sports Sponsorship History

The IOC’s Olympic Partner program (TOP) provides select corporations with exclusive global marketing rights to, and brand exposure during, the widely viewed Games.

The Paris 2024 Olympics have averaged a total audience of 33.8 million viewers over its first four days in U.S. and Parisian primetime (+77% over the same period during Tokyo 2020).

The designation and corresponding spotlight do not come cheap. TOP partnerships cost upwards of $100mm per year and typically span four or five Olympiads (i.e. 8-10 years). As context, the NFL's top partnerships were reportedly worth an average of $90+mm during the ’23-’24 season.

The substantial cost, and presumably a subsequent lack of return on investment, are among the reasons several partners have ended (see: McDonald’s in 2017) or are planning to end (see: Toyota) their affiliation. The difficulties associated with activating Olympic partnerships and the condensed time between Olympiads were also likely factors.

But those realities do not mean the IOC’s highest-level partnership offering is without value. Former Coca-Cola and Visa global sponsorship executive Ricardo Fort argues Airbnb’s TOP membership has generated ‘one of the highest ROIs’ in sports partnership history. SponsorshipX founder Mark Harrison echoed the sentiment.

It’s logical to wonder how one company could realize the outsized returns Fort and Harrison claim, while others enrolled in the same program were seemingly unable to derive similar value. 

One answer lies in how the partnerships are measured. 

Instead of relying on common marketing metrics (think: impressions or brand perception based on survey feedback), Fort and Harrison focused on how Airbnb’s TOP partnership has impacted company revenues. 

And “the investment might have saved them billions,” Fort wrote on LinkedIn.

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Airbnb is an online marketplace for temporary lodging. It takes a percentage of the fees collected by homeowners for guest stays booked through the platform. 

While the business is not endemic to the Olympic Games (e.g., Wilson providing footballs to the NFL), it is difficult think of a sporting event, outside of the World Cup, that attracts more out-of-town fans. They all need a place to stay, and not everyone wants or can afford traditional lodging options (think: hotels or motels). 

So, it’s logical to assume the three-week period during the Games is a lucrative stretch for the TOP partner.

The problem with that kind of surface level analysis, however, is that it’s unclear how much incremental revenue the company generates from its affiliation. Airbnb has long maintained substantial market share abroad (think: half its bookings are outside of the U.S). It’s a good bet that many fans in Paris, who sought a hotel alternative, would have booked a place through the platform, either way. 

So, what is the trenchant revenue case for Airbnb’s IOC partnership?

Its TOP status has been a multiplier across the business–not just when the Olympics are taking place.

“By becoming a TOP sponsor and supporting the Games in Tokyo, Beijing, Paris, Milano-Cortina, and Los Angeles; the company might have delayed local regulations that limit their freedom to operate (see examples from New York 2023 and Barcelona 2029),” Fort added. 

The logic implies that local governments view Airbnb more favorably because of its support of the Games when they come to town. Remember, the company has faced a steady slew of legal challenges about whether converting residential homes into rental properties conflicts with existing laws, regulations, or ordinances since its emergence 15+ years ago (many are still being sorted out in courtrooms).

This kind of holistic impact multiplier may seem idiosyncratic to Airbnb, or even to sports partnerships. However, it’s more prevalent than one might think.

My co-authors and I cited The University of Chicago as an example in the book The Sports Strategist: Developing Leaders for a High-Performance Industry. The school, which fielded the first Heisman Trophy winner in 1935, abandoned its football program in 1939. 

That decision kickstarted a larger initiative across campus to deprioritize extracurricular activities. The thinking was it would give students more time to focus on academics. 

Instead, U of C became known as the place ‘where fun goes to die’, a reputation that led to fewer applications and threatened the schools’ main source of revenue (tuition). 

The University of Chicago eventually changed its tune in and invested substantially in both its athletics program and recreational facilities that would give non-athlete students the ability to more easily participate in sports.  

In 2010, the school received 19,347 applications (+43% from 2009). By 2013, that number had risen to a then-record 30,369 applications.

“In the ’80s we were losing students who wanted a better quality of student life, and part of the solution was athletics, more coaches, better facilities,” former U of C athletic director Tom Weingartner told the NYT back in 2011.

Colleges and universities worried about continued enrollment might want to take note.

It’s important to understand that while sports investments can be lucrative, not every opportunity is equally valuable to all organizations. A company or organization’s status in the marketplace, and its relationship to the property, will influence the outcome.

McDonald’s and Toyota do not share the same legal and regulatory challenges as Airbnb, nor do they have as clear of a business alignment with the Olympic Games. That makes it difficult, if not impossible, for them to take advantage of the revenue multipliers Airbnb benefits from. 

Yet, most traditional partnership valuation approaches fail to fully account for this differentiating factor–if at all. They exclusively or primarily focus on reach rather than impact.

That methodology would likely have concluded that McDonald’s, Toyota, and Airbnb all gain comparable value from being a TOP partner, when that is not the case.

One must account for holistic revenue multipliers to properly evaluate sports investments.

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