Airbnb can find you a well-appointed place to crash during your next big trip, but it’d really prefer to hang out every step of the way. To that end, in 2017, we can expect Airbnb to expand its horizons considerably, moving well beyond the vacation rentals that it’s remained synonymous with since launching in 2008.
As the company confirmed last month, its plans to expand into flight bookings are clear, with “Flights and Services” lined up to join its other new offerings, now categorized a bit murkily as “experiences,” “places” and “homes” (aren’t homes places?), which all fall under the broader umbrella of “trips.”
According to Bloomberg, Airbnb will pull this off by buying up an existing online travel site, or by striking a data licensing deal with a provider like Sabre or Amadeus IT Group. The move is rumored to precede Airbnb’s long-anticipated IPO, which is expected within the next 18 months.
In looking to add new revenue streams, Airbnb is eyeing some tried and true models. Major booking sites like Kayak, Priceline and Expedia all offer a one-stop shop for trip planning, with hotels, car rentals and flights collected in the same place. Most of these services also offer packages, where travelers can score a bundled deal or promotional offer if they opt to book everything in one fell swoop rather than putting together a trip one piece at a time. This sort of bundling could be an opportunity for Airbnb, were it to grow into the travel booking hub of its dreams.
Airbnb’s recalibrated mission is plainly evident from its greeting page, where the company invites you to browse “Homes, experiences, and places — all in one app.” That goal was driven home by last month’s launch of “experiences,” a new way for travelers to book reservations for things like surfing lessons, cooking classes and even music sessions at their destination of choice. Airbnb takes a larger cut of these listings than the 6-12 percent it collects from its regular rental bookings.
These experiential bookings are offered by local host-types with specialties that might catch the eye of vacationers looking for an authentic local experience. Like flight bookings, these alternative listings won’t strike a nerve with communities facing affordable housing crises, since they aren’t displacing anyone or driving up real estate markets in such a direct way. Nor would they create the same kind of expensive friction with state and local governments.
Amid costly regulatory battles, Airbnb knows it needs to branch out. With an IPO looking inevitable in the not too distant future, even as it continues to raise funding, Airbnb would be wise to broaden its listings toward less sticky revenue streams before it takes the plunge.