The Case for Why Airbnb’s Foray Into Experiences Is a Fundamental Mistake
When you talk about experiences, you're talking about bloodletting on all fronts. I don't know of an online travel agency that is finding true success selling experiences.
Airbnb's first attempt was to try to provide unique inventory, which is in its DNA. In my opinion, that strategy is madness. It misses the fundamental realities of the unit economics of the average experience provider.
I'm not talking about the Disney's or the Big Buses of the world, but the actual human beings who take visitors to hang-glide, boat, hunt, ski the backcountry, and trek, for example. In other words, I'm referring to the 80 percent of providers who take, as a group, only about 15 percent of the total spending on activities.
My opinion about why experiences has failed on Airbnb — and by most accounts it has, although only Airbnb knows the degree of failure — is rooted in the fact that Airbnb's DNA and core market is the private shared apartment. And its conceit, like that of many entrepreneurs, is that Airbnb thinks it can take the learnings from one market and then apply it wholesale to another.
In the case of Airbnb, the company is mistakenly trying to apply learnings from its core homesharing market to that of experiences.
