AirBnb Wants to Conquer the Travel Itinerary
If there are any hospitality researchers our there reading this, I'd love to see a poll that asks hotel managers what they think of AirBnb. Obviously there would be sour grapes, especially among those who feel that market share has been lost and professional standards have been compromised. There would also be small percentage of forward-thinking hotel managers who think AirBnb has been overwhelmingly positive, and that the industry is better for it. But the majority, I'm guessing, would be pragmatists who think there are pros and cons to the ways in which this maverick startup changed (and continues to change) the industry.
However such a poll might play out though, we can all agree that there is no going back from AirBnb. It has blurred the line between professional and amateur hospitality, using a carefully constructed set of policies and a self-regulating system review system for quality control. Hosts are nothing less than amateur boutique hoteliers. If their services and amenities aren't good enough, the world will hear about it and others will rise in prestige. Just like professional hoteliers.
In the past year, it's become clear that AirBnb is not content to grab market share from "real" hotels and change the way the world thinks about travel accommodations. With the introduction of "experiences," they went deeper into the travel itinerary. No matter where you were staying, you could use AirBnb to connect with locals for curated experiences. You could learn the surf spots, paint with a local artist, and so on. This was a logical move. The unique travel experiences that once relied on luck and bravado (or just booking a bed and breakfast from the newspaper or the autoclub guide) could now be booked in advance. This concept was actually nothing new (it's called 'guided tours') but AirBnb was in a unique spot to expand it and make it cool.
You may have noticed that AirBnb has been offering joint promotions with airlines and other travel-related companies in recent months. That was just a precursor. Now, with a heavily rumored flight-booking engine of their own in the works, the company is pushing well into the OTA market space.
The idea of capturing market space from powerful OTAs would seem outlandish if we were talking about another company - but this is the brand that redefined the concept of travel accommodation in the space of a few short years. Even if AirBnb launched their own airline in the next decade, the world would probably nod and say, "Yea, that makes sense."
It doesn't stop with air travel, either. Back in 2016, AirBnb invested nearly AUD $17m in a restaurant booking platform called Resy. This partnership allows AirBnb users to see and book restaurants directly through the company's app and web site. Executives at restaurant booking services like Opentable are probably having meetings about this as we speak.
What's happening is simple: AirBnb is jockeying for position as a massive share-economy OTA. You probably know that AirBnb is more valuable than any hotel chain - but the company's valuation (AUD $40b as of this writing) is still peanuts compared to Priceline Group (now called Booking Holdings and worth AUD $130b), to say nothing of the combined value of the global OTA business. This is a gap that AirBnb wants to close.
Well, can they?
The truth is, if AirBnb's incursions into flight and dinner reservations are half as successful as their accommodations platform, the company will experience massive growth in the next decade. And if they can capture hotel guests looking for a local guide and a good restaurant, they might eventually capture more market share for accommodations.
When will it stop? As hoteliers, it's easy to equate AirBnb to the marauding hordes from the Lord of the Rings trilogy. What can ordinary hospitality professionals do against so much momentum, so much raw capital and coolness?
The answer is to be creative, to be professional, and not to despair. There is always a downside to the 'cool factor' - it tends to overextend itself and breed enmity over time. AirBnb is no longer the underdog it once was, and in fact many properties are run by commercial operators who act on behalf of the owner to provide a more professional image and service. As the company's ambition grows, so will the public's desire for new (or old) alternatives. Hoteliers may not like the idea of positioning themselves as an alternative to the share economy (even if we are!), but that's the beautiful thing about AirBnb: It proves that the travel industry is in a state of flux, and that nothing is set in stone.
A detailed poll would undoubtedly show that hoteliers have mixed feelings about AirBnb. It wants to own a bigger piece of the travel industry, and nobody knows how these lofty ambitions will play out. Should we be losing sleep? I don't think so. Global branding exercises and large-scale power grabs are one thing, but it's ultimately the individual guest experience that counts. If we can deliver that, AirBnb will ultimately be more worried about us than we are about them.
Dean Minett
Director - Minett Consulting
Minett Consulting
