Industry Impacts of Airbnb’s Shift to Experiential Business Models
The future of Airbnb lies in creating memorable guest experiences, and brands will benefit by complementing these experiences in relevant, valuable ways.
Since attending Airbnb Open in Los Angeles a few weeks ago, I’ve been contemplating what Airbnb’s announcements around shifting toward experiential hosting mean for both guests and corporations. Guests will find authentic travel experiences that complement their hospitality choices, while corporations will find opportunities to partner with Airbnb and sponsor these entertainment and cultural adventures.
During the event, executives from Airbnb revealed a few interesting data points:
- The average business traveler stays at an Airbnb for six nights
- The average Airbnb host makes $7,530 per year
- Travel spending is nearly 10% of global GDP ($7.2B)
- Airbnb had 40M guest stays in 2015 (see graph below), in 34K cities in 191 countries
With guests staying for nearly a week at their hosts’ abodes, many are looking for immersive experiences in the local scene — activities and sights that can’t be booked through a travel agent or seen from a tour bus. There are already more than 600 experiences available to travelers through Airbnb! The company is also experimenting with on-demand car delivery for off-the-beaten-path travel, as well as prepared food delivery.
What does this mean to you? Corporations have the opportunity to connect directly with tastemakers around the world, inserting their brands and products into diverse experiences with lasting impact. Let’s explore a few of the potential industry opportunities:
- Consumer Goods: Airbnb is the world’s largest showroom, with the goods in hosts’ homes used to influence buyers as the level of trust between guest and host are high.
- Retailers: These new “experiences” mean that local retailers will be visited in cities, led by the hosts and tour guides.
- Hospitality and Travel: For hotels, this new offering is about the entire trip, and they’ll soon offer flight deals and cars, in addition to experiences and homes.
- Food: Food will be delivered directly to Airbnb locations, and continued on-demand food models will become important.
- Finance: Hosts are generating a modest amount of income per year, but need money to upgrade their locations, an opportunity for small loans.
What does this mean for all companies? Today’s modern customer is seeking experiences, they show off using digital technologies, and access to physical goods is easy with on-demand models, rather than ownership of a house, car, electronics and more. Established companies need to revisit their strategy to provide customers with experiences that connect to the real meaning of why customers want platforms that enable new adventures and more.