Credit: airbnb.com (edited)
A travel industry transformation is underway as the distinction between traditional hotels and digital booking sites fades. Travelers now expect higher grade services and unique experiences, all tailored by AI.
Airbnb is capitalizing on industry changes with a revamped app, introducing "Services"—like private chefs and spa treatments—and curated "Experiences," which include local activities and exclusive celebrity collaborations. The company's recent Summer Release and CEO commentary frame this not just as an update, but a strategic leap to become an all-encompassing travel and lifestyle concierge.
Wider net: The platform's expansion directly challenges established hotels by offering similar amenities, and takes on experience platforms like Viator and Booking.com by providing a more integrated, personalized travel plan. "We’re trying to broaden our appeal," Airbnb CEO Brian Chesky said, underscoring the company's ambition to grow its share of the roughly $90 billion spent annually through its platform.
Smarter travel: Airbnb's vast collection of user data, gathered over years via detailed profiles, now fuels AI algorithms to suggest new offerings. "The more we understand about you, the better we can match you up with the perfect place, the better experience and stay that you can have," Airbnb's Chief Business Officer, Dave Stephenson, explained. In an interview with Skift, CFO Ellie Mertz points to the company’s drive to become a "true travel concierge," to meet the growing consumer desire for bespoke travel.
Service specifics: Airbnb's "Services" debuts in 10 categories across 260 cities in eight countries, while its "Experiences" launches in 650 cities worldwide. Important to note, customers can book offerings without an Airbnb stay, greatly expanding the platform’s reach. For these new ventures, Airbnb will collect a 15% commission on services and 20% on experiences, with all hosts undergoing a verification process.
Crowded field: The global market for bookable tours and experiences is immense—a Dittofi.com report estimates the market at $320 billion for foreign tours and $1.4 trillion for local activities. Airbnb's latest move to capture more market share is in more direct competition with existing travel giants also weaving ancillary services and AI into their offerings; Tripadvisor, for instance, is using AI to target "high-intent traffic" with tailored suggestions.
Road ahead: Airbnb intends to enrich its platform with social features for users sharing experiences and aims to develop its AI into a full-fledged trip planner. Although Airbnb's stock climbed approximately 22% in the month before these new announcements, the ultimate success of this bold expansion hinges on flawless execution and being able to aptly leverage AI to expand the platform's reach.