Airbnb Expands Into Hotels and Luxury B&Bs
Airbnb has dominated the short-term rental market for the past 10 years—heck, they basically invented it. But as the company continues to grow, it has started to look for ways to expand. After all, as the old adage says, if you aren’t moving forward, you are moving backward. Airbnb Experiences, business travel-focused programs, and more luxury offerings are just a few of the ways that the San Francisco-based online rental giant is looking to diversity its services.
Another expansion seen over the past year is Airbnb’s move into the full-service travel-booking market. Rather than limiting itself to renting houses and rooms in houses, Airbnb has started to provide booking services for established accommodation businesses such as hotels and B&Bs. While at first glance this might not appear to be anything new—hotels and B&Bs have been listing their rooms on Airbnb for years—it is the way that Airbnb is approaching these companies that is different. Airbnb has added new categories on its booking platform that cater to the hotel and luxury rental market, making it easier for both accommodation providers to list their rooms, and for travelers to find these options.
Airbnb CEO Brian Chesky addressed the expansion earlier this year, stating that “Airbnb was designed when we were much smaller.” The platform now lists more than four million accommodation options, which makes it difficult for travelers to find exactly what they are looking for. This is what has led Airbnb to add the new categories.
“We have a lot more than shared rooms, private rooms, and entire homes,” continued Chesky. Airbnb now includes categories for boutique hotel rooms, bed & breakfasts, vacation homes, and even “unique” accommodation options such as tree houses, tents, yurts, and sailboats. There are also collections of specific types of rental homes, making it easier for people to find family-friendly homes, business travel options, places that cater to honeymooners, and large accommodation options for groups traveling together.
Airbnb is also finding ways to reward loyal customers—a move that reflects the popular loyalty programs of other travel companies. While a “superhost” rating already existed to reward home owners, a “superguest” program has also been added over the spring and summer of 2018. This program rewards frequent bookers with various perks, such as discounts on bookings, flight upgrades, and airport transfers.
In an attempt to further tap the luxury travel market, the short-term rental company has also added luxury tiers to its offerings, such as Airbnb Plus and Beyond by Airbnb. Airbnb recognizes that wealthy travelers might not be naturally drawn to what is considered by many to be a budget travel alternative, so the company is working hard to upgrade its reputation and capitalize on this lucrative part of the travel market. Homes in the Airbnb Plus category are inspected in person and have their own personal support teams. Beyond by Airbnb, on the other hand, is a separate website that will rent out high-end, luxury properties with optional concierge services.
While these expansions all make sense when one considers the overarching business model of Airbnb, many people suggest that there is more to the growth than just increasing profits. Airbnb anticipates its initial public offering as early as 2019, and would certainly like to demonstrate the ability to create new revenue streams before going public. Currently valued in excess of $30 billion, the rental company clearly isn’t done growing.
As the Airbnb world continues to expand, it is important that those working in the industry grow and evolve with it. Home owners now have more opportunities to provide niche experiences, but they also find themselves listed alongside the very hotels and B&Bs they once served as an alternative too. While Airbnb once led the charge in competing with these traditional accommodation options—much to the benefit of those listing on the online platform—the more the company begins to resemble more traditional travel agent sites, the less clout home rentals will have. This isn’t to say that the age of the “share economy’s” short-term rental is over—far from it. It just means that the playing field is continually shifting, so those who draw income from Airbnb rentals need to stay on top of development, and make sure that they are capitalizing on them rather than being left behind.
Airbnb property managers are in a unique position to benefit from this growth. Rather than worrying about falling by the wayside as Airbnb expands to offer new tiers and categories, property managers should expand their skills and expertise so that they can become relevant across the platform’s various levels. By growing with the online rental company rather than getting stuck in last year’s mindset, Airbnb property managers can grow their portfolios to include luxury rentals, business rentals, Airbnb Experiences, and even more traditional accommodation options such as hotels and B&Bs. While they might not serve in the same capacity with a hotel as they do with a private home, Airbnb property managers can still find ways to remain relevant and useful. The ability to grow and change with the times is foundational to a long-term successful business—Airbnb itself is a prime example of that.
With the Internet driving growth and progress at rates that we couldn’t even conceive of less than two decades ago, it is clear that tomorrow’s business landscape will look quite different than it does today. There is no way of knowing what changes will come over the next year, let alone the next decade, so the best strategy for hosts, Airbnb property managers, and anyone else involved in the short-term rental business is to keep their fingers on the pulse of the market and evolve with the industry as it grows. This year it is an expansion into luxury homes and hotels/B&Bs. Next year, who knows? The only that that matters is that when changes come, your business can find creative ways to benefit from them