English

How Travel Startups Come Full Circle

By Alex Gaggioli, November 28, 2016

Introduction:

Every year people obsess over the so-called startup unicorns and the major players in technology. For the past few years, the travel industry has made a name for itself as large companies, namely Airbnb, have consistently made headlines.  Airbnb promised to disrupt travel by challenging online travel agencies and the way people think about travel. And in a large way, they’re delivering on their promise.

Last week, Airbnb announced one of their largest updates since their founding. As I read through various articles, I couldn’t help but think that they’re starting to operate more and more like traditional online travel agencies, but with a different twist. It seems as if all major disruptors come full circle at one point or another, resembling the exact businesses they intended to disrupt. Here we’ll discuss the implications of their change in course and explore how their future may pan out.

The Disruptors:

It all starts with a disruptor, which in this case is Airbnb. They intended to empower a different type of accommodation owner who didn’t even know that they could provide a service people would pay for. The sharing economy enables people with idle inventory, i.e. an extra room or an unused car, to be rented out by someone else for money.

Airbnb gave people this new potential revenue source, and in turn, have created a new type of traveler. Travelers looking for more local experiences now automatically look to Airbnb for accommodation when they travel. Now that Airbnb has created this audience, it’s becoming more lucrative to traditional accommodation providers, such as bed and breakfasts.  

While Airbnb has offered new opportunities, it has also posed a real threat to traditional providers, like hostels.

The Normalization:

When anything new enters the market, there is usually a moment of hesitation and resistance. A company dedicated to helping non-traditional accommodations prosper seems like a long shot. But, as you very well know, Airbnb has had incredible success around the world. Now when people say they only stay in Airbnbs or are an Airbnb host, it’s more normal and a part of today’s culture.

At first, the idea of Airbnb seemed weird and uncomfortable, but now sharing a space or staying in a stranger’s home has become culturally appropriate. Now, Airbnb, like other large technology disruptors, can align itself with many different types of people, not just only adopters who are willing to try anything new.

The Pattern

When something truly disruptive begins to normalize in the marketplace, there is a potential for said company to skyrocket. Because of the market size increase, they company is able to scale and make a real impact on an industry. But, as we’ve seen with Airbnb, companies must find ways to attract more people and users to increase revenue.

In their announcement last week, Airbnb announced Trips and Experiences which are different tours offered by locals in several different launch cities. Some of the tour guides happened to be Airbnb hosts already, and we expect that there will be far more host-tour guide combos in the future.


On top of their tours offering, they also announced that people will soon be able to book flights and other transportation, and even order groceries. Airbnb will also produce a physical book of curated experiences for different cities. With the exception of the groceries addition, it seems as if Airbnb is mimicking the behaviors of large OTAs by expanding their service offering.

Startup and technology disruptors usually begin by being good at one really good thing. And that one thing for Airbnb was accommodations. But now, Airbnb hopes to capture more than just the accommodation side of travel. There’s a lot more money to be made and value to share by offering more to travelers, from transit to activities.

Everything’s the Same, but Different

It seems like we’ve been here before. Now that Airbnb is bound to offer everything from accommodations to flights, to tours, they’re really just another online travel agency aren’t they? Not really. Even if Airbnb does offer all the same services as an OTA, they’ve approached their entire business from a different perspective.

Airbnb is about empowering both their hosts and travelers which tells a much different story than Hilton offering cheaper rooms on the most popular OTA. Where Booking.com may list a tour company, Airbnb is listing more specialized experiences, like an immersion experience led by Nelson Mandela’s former prison guard, according to Skift.

The similarities that Airbnb has to traditional OTAs have always been similar with a different take. And now I like to say that everything is the same but different. Traditional OTAs have succeeded because they make finding a hotel, flights, and other travel necessities easy. Now Airbnb is trying to make it easy for travelers to find experiences that more closely match current traveler trends, which includes offering more experiential traveling. It’s no longer about feeling like a tourist, but living like a local in new travel destinations.

Conclusion

I think it’s interesting to see how businesses evolve and grow, especially within the travel industry. Airbnb, once touted as a new a shiny startup, is now an unstoppable force that continually makes decisions that make it appear like a more traditional travel company. In Airbnb’s case, I think what they’ve done is identified what’s worked in the past and put their own twist on it. We’ve accurately predicted that the sharing economy will drive several hospitality industry trends. While it may seem Airbnb has come full circle with their all encompassing booking abilities and physical travel books, they’ve created a new kind mega-travel brand. 

You might also be interested in...

Hotel price wars and the race to the bottom: How to avoid driving down prices in 4 easy steps

Let me dive right in: STR and Tourism Economics have recently downgraded their RevPAR outlook to 1.6% for 2019 and […]

The Reports your Property Should Run Every Night: A Complete Guide to Hotel Night Audit Reports

  One of the most common questions hoteliers have is “how do I run an end-of-day report to ensure that […]

7 Tactics For Successful Hotel Reputation Management

If you own a hotel or any other type of property which accommodates guests, there’s an excellent chance that those […]

PillowTalk: Cloudbeds Product Updates September 2019

Grab a pillow! Let’s talk… As Q3 has come and gone, it’s time to highlight some of the new and […]

Better Together

Cloudbeds loves helping Hoteliers and Hosts grow
their business. Let us show you how.

Book a Demo