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News Article

Airbnb to take on the OTAs


Airbnb moves into hotel distribution, restaurants and experiences

Airbnb, which started in 2007 as a way to rent out unused space in your own home and has since become a global phenomenon changing property markets as investor buy up apartments in tourist destinations to use as short-term rentals, is now to compete with the giant online travel agencies (OTAs) as it moves into hotel distribution, local ‘experiences’, and even restaurant reservations. After the company announced updates to its platform and services at an event in San Francisco last week, Airbnb CEO Brian Chesky told PhocusWire that it was now taking on the travel industry giants Expedia and Booking.com.

In a presentation on 22 February 2018, Chesky announced a loyalty program, new tools for hosts, and features that make it easier for people to find what they’re looking for on the platform. The company has launched Airbnb Plus, which highlights listings that are inspected and guaranteed to meet certain standards. The company already has independent and boutique hotels on its platform, and Skift reports that boutique hotels may eventually be added to the Airbnb Plus brand, or to its upcoming luxury brand, Beyond by Airbnb.

Being listed on Airbnb is attractive to hotels because the commission charged comes more from guests than the hotel company. Airbnb charges as much as a 15 percent commission to guests, while hotels and other hosts pay 3 percent to 5 percent for each booking. That's considerably less than the average 17 percent fee Expedia and Booking take from hotels. According to traveller.com.au, Airbnb currently has 204,000 rooms from hotels and bed-and-breakfast places for rent. Airbnb will let people search for hotel listings in a new category called Boutique, to reflect the offering being mainly smaller independent properties rather than large corporate hotel chains.

Airbnb is moving into restaurant reservations in the USA after buying a stake in restaurant-booking app maker Resy. Resy will start handling reservations for Airbnb users through a tab called "Restaurants" in Airbnb's apps and website. It is part of the strategy to make Airbnb a site to organize a whole trip. It is suggested that when people book a place to stay on the company's main home-sharing service, they may also arrange dinner out during their trip. But comments by Chesky in several interviews suggests that Airbnb sees itself as a platform people could use all the time, even when booking meals and trips in their home town, as ubiquitous as Google or Amazon.

Airbnb Experiences (or Trips) debuted in 2016, and are now offered in 60 destinations worldwide. By the end of 2018, Airbnb hopes to have them in 1,000. The Wall Street Journal has suggested that so far Experiences has lost over $100 million so far, but USA Today says that Brian Chesky views the ‘experience economy’ as a huge opportunity going forward.

Airbnb currently has around 640,000 hosts offering four million properties. In the company’s first 10 years, it has hosted more than 300 million guest arrivals. By 2028, Airbnb hopes to have hosted more than 1 billion travelers on its platform annually.

Much of the published research on Airbnb deals with its impact on hotels, but there is also a growing literature on the Airbnb experience itself. A selection of records found on the Leisure Tourism database is given below.

Article details

  • Author(s)
  • David Simpson
  • Date
  • 26 February 2018
  • Subject(s)
  • Hospitality Sector
  • Travel and Technology