Airbnb, now valued upwards of $30 billion and inching toward an IPO possibly as early as this year, has made an acquisition to continue to diversify its revenues beyond basic booking services for overnight accommodations in private homes. It has acquired Gaest, a startup out of Aarhus, Denmark that provides a marketplace-style platform for people to post and book venues in hourly or daily increments for meetings and other work-related events like off-sites in Europe and elsewhere.
Gaest’s team — it was founded in 2015 by Anders Boelskifte Mogensen (the CEO), Chris Kjær Sørensen, Christian Schwarz Lausten and Jonas Grau Sigtenbjerggaard — will be joining Airbnb and will report to president of Homes Greg Greeley. Airbnb says the service — which currently has listings for some 3,000 venues from hotels to co-working spaces and other rooms — will remain operational on its own platform “for the foreseeable future.” It’s not clear if the Gaest brand will remain as a part of that.
“We’re thrilled to join one of the world’s most innovative companies and become an integral part of their mission to make it easier for professionals to feel a sense of belonging at work,” said Mogensen in a statement. “Our dream from day one has been to make it easier, faster, and more cost-effective to list, discover, and book unique spaces that spark creativity, motivate interaction and encourage knowledge sharing.”
Terms of the deal were not disclosed, but we are trying to find out. According to Crunchbase, Gaest had raised $3.5 million.
The acquisition points to two strategic developments at Airbnb, both aimed at helping the company diversity and grow its revenues.
The first is that it will build on Airbnb’s expansion into services for the business market.
This is an area where Airbnb has already been building inroads: It’s had a program in place since last year called Airbnb for Work, aimed at the business travel market and booking accommodations for business travelers, and it says that to date some 700,000 companies have seen employees sign up and book accommodation through the program.
Even before that, Airbnb had inked partnerships with corporate travel apps like Concur that are standard tools in large enterprises, so that its listings can also be discoverable alongside more classic hotels. That’s before you consider the number of people who may be booking on Airbnb for work trips but using their personal accounts to do so.
The idea of Airbnb for Work also taps into the trend of “consumerization” and how it has played out in the world of business travel. While some people will prefer to stay in business hotels and the amenities that come with that, others will opt for more individualized options that tap into local life.
That’s before you consider the average price differences between the two, where business hotels tend to reach into premium price points and Airbnb homes tend to come at a wider range of prices. To be sure, Airbnb is not the only one eyeing up ways of serving business users with their travel and meeting needs. A number of startups, like 2nd Address and Homelike, have sprung up to address the growth of business travelers looking for Airbnb-style options instead of business hotels for longer-term work trips.
And you can’t not consider the competitive threat here also from We (FKA WeWork), which had its start in co-working and meeting spaces, but now has ambitions to extend into providing space to companies and business types to cover other needs like sleeping and more. Like Airbnb, it’s also going to be working hard to expand and diversify its business to capture more revenues from existing and new customers.
And this leads to the second area where Gaest will help Airbnb: providing more value to existing and future hosts on the platform.
Today, the mainstay of making money on Airbnb if you’re a host is to offer your house for overnight stays. But Airbnb has been adding options beyond that, for example by giving hosts the chance to offer paid experiences to visitors, to help them increase their options for monetizing guests.
Homes head Greeley, Airbnb notes, is “leading a robust and aggressive plan to both support the hosts who have always powered Airbnb and expand our accommodation and service offerings into new areas.”
Airbnb noted in September 2018 that informally, some business users had already started to use Airbnb for work to book homes for off-sites. This Gaest acquisition could help formalize some of that by providing a platform for Airbnb hosts to list their homes specifically for this use case, and of course a pool of potential customers to make bookings.
“We imagine a world where anyone can share their space for professional events and, in the longer term, for celebrations,” said David Holyoke, Global Head of Airbnb for Work, in a statement. “Bringing in a leadership team with strong domain knowledge allows us to accelerate our work in this area, and more importantly Gaest.com and Airbnb share a vision of helping every space owner become entrepreneurs through sharing their spaces with those who need it.”