Here To Stay: Airbnb’s Aspirations To Expand Beyond Lodging
In the near future, Airbnb may disrupt more than the hotel industry. The company’s engineering VP, Mike Curtis, told Venturebeat that personalization could help expand itineraries from end to end. That means that Airbnb can handle your transportation, entertainment, and other events of your trip.
Airbnb connects people and places to stay, at any price point, in more than 34,000 cities and 190 countries. People around the world have also turned to Airbnb to monetize their spaces and market it to a global audience of millions.
The site was an immediate hit with Millennials, but the challenge was to broaden its base to older travelers, particularly the business class (employees from 250,000 companies now regularly book travel on Airbnb).
The company charges guests (6-12% of total rental fees) and hosts (around 3% of their total earnings from the Airbnb site).
The original, humble Airbnb model now seems almost prehistoric: searches based on the number of bedrooms and price. These rules were hard coded -- meaning they would apply to every guest without any variance.
However, before long, machine learning was applied to enhance personalization. In 2014, the company began personalizing all search results, factoring in signals about the guests themselves (what kind of decor they liked, etc.), as well as guests who match up to similar results.
Today, Airbnb pulls well over a hundred signals into its search rankings, to further personalize a customer’s travel lust. This technique can also expand to how a user can price a listing. It’s based on historical data and travel patterns that reveal the probability of any listing being booked on any given night at any given price up to 12 months in the future. Hosts can consider these suggestions -- daily, the algorithm recalculates these price predictions up to a year in the future.
Airbnb is currently the country’s second most valuable technology firm (after Uber), with a valuation of $30 billion (Uber: $70 billion). In 2016, 80 million people booked stays on Airbnb, which was double the number from 2015.
Next step: expanding into luxury trips, business travel and city tours.
The Economist reports that the company’s ultimate goal is to evolve into a comprehensive travel company, which would capture a greater share of the tourist market. Forecasts predict a possible $8.5 billion in revenues by 2020.
Its chipping away at the traditional hospitality industry continues to intensify. Morgan Stanley reports that the the number of overnight stays in Airbnb accommodations will reach 6% of all hotel nights in America and Europe in 2018, up from 4% in 2016.