Airbnb and OTAs: The battle officially starts?
Airbnb is making strategic plans to compete with the giants of the accommodation world - online travel agencies.
CEO Brian Chesky made the comments during an interview with PhocusWire shortly after the company announced updates to its platform and services at an event in San Francisco this week.
“Our competition is two companies – Expedia and Booking.com – and I’m extremely excited about what the next ten years have in store,” Chesky says. “Make no mistake: We are going to run this company for decades, but in a certain way.”
The “Airbnb way” is how the company has approached all its offerings – starting with its core home-share product and expansion into ventures such as Experiences and, more recently, its foray into hotel distribution – and how it plans to secure more than one billion annual guests by 2028.
The estimated number of guests comes based on some kind of flight element for the site, the company confirms.
Ambitious expansions to conquer
The platform’s newest features – the launch of four new property types; Airbnb Plus and Beyond by Airbnb; Airbnb Collections; and a Superguest program - add more elements to rival OTAs, all in pursuit of giving customers what Chesky calls the “best trip.”
“The product in travel is trips,” he says. “We believe the way we’re going to win or the way we’re going to win over hundreds of millions of customers is to have the best trip.
“We don’t need to beat our competitors; we just need to make sure that if you’re seeing incredibly local, personal, magical experiences, and if you see everything – eventually – in one app, you’re going to be able to come to Airbnb."
Chesky believes Airbnb has outperformed OTAs, including unique inventory, a passionate community of people and numerous experiences in one app.
“We have Homes, Experiences and Restaurants – none of them do in the same way,” he says. “We’re a more vertically integrated, end-to-end, full-stack ecosystem powered by people.”
A key differentiator for boutique hotels, which now can list on the site through third-party distributor SiteMinder and are part of the company’s seven property types – is Airbnb’s lower commission rate, which Chesky assures will remain lower than Booking.com’s.
Boutiques also feature the soon-to-launch Superguest program and the Airbnb Plus initiative.
“Superguest is basically like a guest loyalty recognition program. This will allow a local boutique to compete with a large hotel chain that has a loyalty program, and [the boutique] doesn’t even have a loyalty program because we can give them all the benefits,” Chesky says. “We can democratize many of those benefits just through our platform, and we can do it by offering another channel for them."
Airbnb has dominant advantages?
Boutiques will also soon be allowed to apply for Airbnb Plus, which affords hosts top placement, in-home services such as design consultation and premium support, to give them increased visibility over OTA listings.
“Right now on a lot of OTAs, they’re pushed to the bottom, and the big chains will get the distribution,” Chesky says. “[Airbnb Plus] will allow us to feature and highlight [properties] to stand out."
The real ticket, Chesky says, will come when Superguests book Airbnb Plus listings. “That’s going to be a pretty powerful combo,” he says. “I think we’ll stand out in the hospitality industry, I’ll say that."
The next step in Airbnb’s dominance against OTAs will be activity around flights, which Chesky confirms the company is looking into but has no formal announcement about.
He says a number of companies in the airline industry have reached out about working together through a guest membership or loyalty program – which, coincidentally, Airbnb soon will with Superguest.
“As we’re building up the Superguest program, I’m looking at [partnerships],” Chesky says. “I don’t know if they’ll be one of the initial partners, but there might be opportunities there that might be a prequel to something down the road.”