February 23, 2018

Airbnb is overhauling its business, becoming more hotel-like


Airbnb outlined a new roadmap to make its service more mainstream: highlighting hotels on the website, a loyalty program, and the ability to match guests with accommodations that fit their budgets and tastes.

At a company event on Thursday, Brian Chesky, Airbnb’s co-founder and chief executive officer, showed off a new type of hotel-like accommodations called Airbnb Plus. The higher-end homes will be visited by an inspector, who will determine if the homes meet requirements ranging from fresh, matching towels and working appliances to a commitment to stock the home’s kitchen with a selection of teas and coffee, similar to hotel offerings.

Although Airbnb has let hotels and bed-and-breakfasts quietly list on its website for years, Chesky gave the clearest indication that hotels are an essential piece of his strategy to create a full-service travel company. The move is intended to attract business from Expedia and Booking.com. Because Airbnb is charging much lower commission fees, it could be very effective. “At a high level this is a negative for Booking and Expedia,” said Kevin Kopelman, an analyst at Cowen & Co.

The economics are especially attractive to hotels. While Airbnb charges as much as a 15 percent commission to guests, 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 Cowen, the research firm.

Soon, Airbnb will let people search for hotel listings in a new category called Boutique. A document Airbnb created for hotel owners reads, “Larger corporate hotel chains are not the right fit for Airbnb.” The company said it will vet listings and in marketing materials distributed in advance of Thursday’s event, the word “hotel” is never used.

Get the full story at Bloomberg and Airbnb

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