Date
16 November 2018
Airbnb will make it easier for boutique hotels and bed-and-breakfasts, once its arch enemies, to list their rooms on its online booking site. Photo: Reuters
Airbnb will make it easier for boutique hotels and bed-and-breakfasts, once its arch enemies, to list their rooms on its online booking site. Photo: Reuters

Airbnb looks to luxury vacations, hotels for growth

Airbnb is rolling out new services aimed at attracting travelers looking for luxury accommodations and traditional hotels, the latest move to contend with sputtering growth in its original home-renting business.

The company was set to unveil on Thursday a new product that bundles Airbnb’s poshest properties with high-end travel services, as well as a separate category of homes guaranteed to be clean and comfortable, Reuters reports.

Airbnb will also make it easier for boutique hotels and bed-and-breakfasts, once its arch enemies, to list their rooms on its online booking site, the news agency said.

The new moves are aimed at winning over travelers who have shied away from the risks and quirks that are part of renting a stranger’s apartment.

But they are also an acknowledgement that its core business has hit roadblocks around the world. Regulators in key cities such as Berlin, London, New York and even its hometown of San Francisco have cracked down on short-term rentals, blaming Airbnb for exacerbating already tight housing markets.

The company has been forced to slash its listings in certain popular cities as part of its concessions to regulators.

Airbnb has compensated by adding services such as restaurant reservations and guided trips of local sights, part of a roster of offerings the company is betting will someday generate more revenue than it earns from renting homes.

Airbnb chief executive Brian Chesky was expected to announce changes that put the company in closer competition with the likes of Expedia Inc.

Planned moves include a new way of categorizing listings. Airbnb will specify whether the property is a home, bed-and-breakfast, hotel or something more eccentric, like a houseboat or yurt.

It will also give guidance on the best properties for certain types of travelers, such as whether a house is most appropriate for families, newlyweds or colleagues on a work retreat, according to an Airbnb spokesman.

Another new category is made up of homes that Airbnb has inspected for quality and cleanliness. Landlords will be able to charge a premium for those properties, enabling Airbnb to earn more too. Airbnb charges fees of up to 15 percent for guests and about 3 percent for hosts on the price of each rental.

The privately held company, which is valued at US$31 billion, needs a predictable business with steady growth to hold a successful initial public offering, expected in 2019.

“Airbnb [is] figuring out how do we grow at the same levels that investors are expecting us to grow, given some of the regulatory headwinds,” said Christopher Anderson, a professor at Cornell University’s School of Hotel Administration. “That comes down to more breadth of inventory.”

Airbnb, which does not release its financial data, said last year it had achieved its first full year of profitability. The company continues to increase its number of listings and visitors, but growth has slowed.

Since its launch in 2009, the company at least doubled the number of bookings for its properties every year until 2017, when bookings grew by 62.5 percent to 130 million guests. The slowdown is due in part to the company’s larger size as well as the harsher regulatory climate.

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CG

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