Airbnb upgrades products with luxury options, user reward

Airbnb is planning a major overhaul of its business strategy to target more new users globally, moving beyond its core home business.

The San Francisco-based company, which until now was focussed on budget travellers, has launched new categories — vacation homes and boutiques. It has also launched luxury products Airbnb Plus and Beyond by Airbnb. The company will soon also be launching special stay options for people travelling for work, for honeymooners and for group travellers.

In its new avatar, the company intends to target family and luxury travellers and also transform itself more into an accommodation aggregator. It is likely to give head-on competition to travel aggregators such as Expedia.com and Booking.com.

However, unlike other hospitality service providers, Airbnb generates revenues for hosts, who keep about 97 per cent of the money they charge for their listings. The company is now looking to reward its guests too with its loyalty programme called ‘Superguest’, which will have benefits such as discounts, airport pick-ups and flight upgrades. The company is at present piloting the programme with about 10,000 guests and will roll out the service globally in the next few months.

1 billion guests

With new products in place, Airbnb is targeting about one billion annual guests by 2028 with an aim to provide better accommodation options, greater transparency and availability to its guests.

While the company did not reveal the statistics on its annual guests at present, it claims to have witnessed about 3 million guests in a single night, on December 31, 2017.

Brian Chesky, co-founder and Head of Community of Airbnb, told a press meet here on the occasion of completing a decade in the business, “Ten years ago we never dreamed of what Airbnb could become. In fact, people thought the idea that strangers would stay in each other’s homes was crazy.

“Today, millions of people do just that every night. But we want to go further by supporting and expanding our community so that, in 10 years, more than one billion people annually could experience the magic of Airbnb.”

Talking more about Airbnb’s global programmes, Chesky said the company is moving beyond its core business and looking to provide greater experiences to its users, both hosts and guests. The accommodation would range from camper vans to igloos, boats, tree houses and luxury villas, Chesky said, adding that its newest product, Airbnb Plus, will help users search and book some of the best listed properties globally.

“Airbnb Plus homes have been inspected and verified in person against a over 100-point checklist covering cleanliness, comfort and design,” Chesky added.

Emerging markets

He also said that as the global travel industry is booming — with an increasing number of millennials from emerging markets travelling for work and leisure — Airbnb’s growth will be coming from markets such as China, India, Latin America and Africa over the next decade.

However, the new Airbnb products will take a while to reach the Indian market.

Airbnb’s diversification also comes at a time when the company is still fighting regulatory issues in many countries for jacking up short-term rentals, leading to housing shortage. It is also facing opposition from a strong lobby of the hospitality industry across different countries.

The entry into newer categories will, however, help the company, with a $30-billion valuation, earn better margins from boutique hotels, villas and other experience-led stays as the company prepares for its public listing in 2019. By then, its new products are also likely to turn profitable, according to Chris Lehane, Head of Public Policy at Airbnb. The company in the last 10 years has added 4.5 million listings in 81,000 cities globally.

The writer is in San Franscisco at the invitation of Airbnb.

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