Today, Brian Chesky and Joe Gebbia are multi-millionaires, but only ten years ago, the two had trouble paying their rent in San Francisco. Then one day in the summer of 2008 the idea came to them: They would rent air mattresses for people to sleep on in their apartment and offer guests breakfast AKA a bed and breakfast. A few weeks later, one of the world’s most valuable and transforming startups in the world was officially founded: Airbnb. The company is not only the world’s largest platform for the rental of private rooms and apartments, it is the global tourism provider of the Internet age.
The company succeeded in shaking the established hotel industry and changing our travel habits through sharing economy principles. The effects of this shake-up were and are enormous. Reason enough to take a look at the present and future of Airbnb.
Airbnb or: It’s good to have a choice
Before Airbnb was around, accommodation choices were rather limited: Either you know people who have a place, friends or family, or you have to book a cheap hotel room, or you’ll look for a timeshare through a local agency.
With the arrival of Airbnb, that has changed radically. Why not spend a cheap night with a local in just a few clicks? Someone who can also give valuable tips for a unique and authentic holiday? Millennials were then (and still are) enthusiastic because their willingness to travel was finally reconciled with their lower income. With Airbnb, they finally have the choice. And they also have the opportunity to remove themselves of the tourist label that a hotel guest has and immerse themselves in the city off the beaten path.
In this way, the platform extends the range of beds for visitors, giving young tourists a more authentic taste of their urban destination and keeps prices low for all travellers. With this innovative approach, the California start-up is now worth $31 billion, represented in more than 81,000 cities in over 191 countries. So far, 300 million guests have booked beds – 1,400 of which were in tree houses and 3,000 in castles.
Airbnb as a game-changer
But with every revolution, the rise of Airbnb is a struggle. Airbnb doesn’t just compete with hotel chains and big travel portals for travellers. The platform also competes with locals for housing. The company has shifted the burden of rising prices in crowded passenger city centres to residents. The impact is dramatic in many cases: The price of the hotel room is falling, while the price of rent for city dwellers continues to rise.
This situation is unbearable in many big cities. Hamburg, Munich or Berlin, Barcelona, Santiago, or Madrid: In many tourism magnets of the world, residents are now demonstrating for stronger regulation. Politicians are being forced to react.
Mallorca now prohibits private rentals of apartments to tourists. Other cities are considering taking action against the rental platform by limiting the number of nights that can be booked in a private apartment.
It’s important to remember: On-demand services such as Airbnb, Uber, and Netflix have forced state and local policymakers to rethink their approach to taxation, zoning, and public transportation. Also, more and more established companies need to leave their comfort zone and rethink their business models to stay relevant. Such disruptions often cause widespread rejection and chaos, but always drive innovation.
Airbnb as an innovator
Airbnb has revolutionised the tourism industry and changed the way people travel in a sustainable way. People are looking for unique, tailored experiences. Hotel chains now feel the pressure to provide more than just a room. This leads to a general improvement in the offer and higher customer satisfaction.
- Beyond the stay. For example, Marriot International is expanding its accommodation offerings with experience packages, as well as Airbnb.
- Feels like home. Some hotels give away slippers, offer free laundry, and complimentary welcome snacks.
- Smart use of technology. Websites have replaced telephones in many cases today. But sometimes direct communication is very helpful. For example, the Mabi Hotel in Maastricht offers a live chat to answer any questions.
- Uniqueness and design. Common areas with a unique design concept that inspire the enthusiasm of Instagram or Pinterest users increase brand awareness. Co-working space is also trendy because it increases the likelihood that a tourist will meet a local and talk to them.
Even more growth
Airbnb doesn’t just want to survive the classic tourist agency, they want to grow even more. In order to offer local, personal, and authentic travel of all kinds, the rental platform has evaluated their collected data with machine learning and has decided on the following developments:
- Four types of accommodation have been defined: Holiday accommodation, special accommodation, bed and breakfast, and boutique hotel.
- Two new accommodation classifications have been added: “Airbnb-Plus” and “Beyond by Airbnb”. The latter is, so to speak, his first leap into the luxury industry to offer particularly exclusive accommodations and first-class service.
- A new guest loyalty program that will be launched later this year.
- The construction of their own houses, which can then be used by both tourists and locals.
The learning here is very clear: The best never rest. Whether air mattress or luxury loft: Why should you as a company rest on your success? Although Airbnb is aggressive, the California company is also inspirational: Always experiment, learn, and understand customers better – to ultimately bring your own business model to an even higher level.