September 27, 2017

If you can’t beat ‘em, join ‘em

Airbnb has done nothing to hide its ambition to change the way people travel. That is a large part of its appeal. Perhaps less noticed is its desire to change the way people live when they are not traveling.

The latest news from the sharing economy darling makes this objective more obvious to the outside world than ever before. Though yet to be announced officially, reports indicate that Airbnb is about to test brand apartments for the first time. Whether an extension of its previously announced Friendly Buildings Program, or a response to the ambivalence shown by landlords to that program is not certain. What is clear, however, is that this is the latest and perhaps clearest move yet that Airbnb has made in terms of moving away from a mere booking platform, and securing itself the status as the it brand for travelers.

There has always been a tension at the heart of Airbnb. On one side you had the peer-to-peer promise of it: the uniqueness of the host, the accommodation, and thus of the experience. On the other side you had the need for some kind of certainty, or at least comfort from a traveler/guest’s perspective that what she was booking was indeed what she would find when she arrived. In the early days reviews filled this gap, but as the company has grown, and its ambitions along with it, something more was clearly needed.

Identifying what this “more” could or should be has not been easy. The great thing about a Silicon Valley startup, however, is its ability and desire to continually test and refine. Examples of these changes include: launching an “Airbnb hotel” in Japan, the Sonoma Select program where Airbnb acted as a professional vacation rental manager, the aforementioned Friendly Buildings program, its “Find a Professional Host” program, and its $200 Million+ acquisition of Luxury Retreats earlier in 2017. Airbnb’s strategic decisions to this point aim to address this “more” by continuously marching towards a consistent hospitality brand and the professionalism that necessarily entails.

With its latest initiative the move in that direction is even more forceful. Instead of relying on management of the property after the fact, Airbnb is inserting itself in the design and the development of the assets from the very beginning. No longer content with shaping the hosting service provided by people on its platform, Airbnb now wants to shape the physical accommodation as well. And in choosing the Orlando area, the largest vacation rental market in the world, it is also a clear shot across the bow of VRBO’s parent, Expedia.

With this new initiative, as well as the push into a VRBO stronghold, one can’t help but wonder if it is an attempt to strike at the current king of vacation rentals during a period of flux after the recent change in leadership. Also, given the legal troubles the company increasingly faces around the world from New York to Berlin relating to people renting out their own homes, one could be forgiven for wondering if this “test” is simply Airbnb’s first of many moves into asset ownership, and a prelude to obtaining the paperwork needed to legally operate those assets in a hotel-like manner.

Regardless of the intent, the results are what will fascinate the travel world for years to come. In the ever interesting world of vacation rentals and the sharing economy, watch this space.

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