Skift Take

We've known this day would come for quite some time now. The only question left to ask is this: Can Airbnb succeed in becoming a "super brand of travel" like it aspires to be?

Airbnb is making good on its global campaign promise to help guests “live there” with its newest product launch.

Today, the San Francisco-based company debuted Trips, the company’s official, formal foray into tours and activities, as well as Places, which allows users to find highly curated, hand-picked recommendations for meetups, restaurants, and events in a destination. The company also hinted at the debut of Airbnb Flights, and noted that guests can eventually book car rentals, restaurant reservations, and grocery delivery services through the updated Airbnb app.

All of these new products point to Airbnb’s ambitions of becoming a bonafide “super brand of travel” by combining all of these services into a single travel platform. It’s clear that with today’s announcement, Airbnb doesn’t just want to be an accommodations provider or even an online travel agency. It wants to be all of the above, as well as your go-to for recommendations, finding new friends, making restaurant reservations, booking car rentals, and even booking flights, down the line.

Airbnb CEO Brian Chesky made the announcement today on the first day of the company’s annual Airbnb Open conference in Los Angeles, which welcomed more than 7,000 hosts and guests from 100 countries worldwide.

“You can spend as much time planning your trip, as on your trip,” Chesky said. “We want to fix this … Welcome to the world of Trips, where we put Homes, Experiences, and Places together all in one place. We designed this to be both magical and easy.”

Airbnb’s solution for accomplishing this? To debut tours and activities (Trips), as well as combine the functions of other travel apps with recommendations, curated event suggestions, meetups in its new Places function, and to enhance the company’s overall Homes product as well.

How Trips Work

Airbnb’s Trips are mostly peer-to-peer (Chesky said 10 percent were organized by hosts who also happen to have home listings on Airbnb), but with a twist. In addition to offering experiences that are hosted by individuals, Airbnb also partnered with some nonprofits as well to provide unique Social Impact Experiences for guests.

To start, Airbnb will offer Trips in 12 cities (Detroit, London, Paris, Nairobi, Havana, SF, Cape Town, Florence, Miami, Seoul, Tokyo, and Los Angeles) with hopes of expanding to 50 cities worldwide by 2017.

Airbnb guests can book these trips similarly to how they would book a home to stay in. Each trip is presented almost as though it were a film unto its own, with a short trailer, and a poster designed in the vein of vintage movie posters. To book one of these experiences, you have to book through Airbnb’s mobile app and you don’t need to be staying in an Airbnb to book a Trip.

Trips are offered as Immersions, which are multi-day activities, and as Experiences, which last for just a few hours and are more a la carte. Chesky said half of the Trips are under $200, and guides set their own prices and cover their own costs for the Trips. Judging from Chesky’s presentation, it doesn’t seem like Airbnb’s trips are being organized by any formal tour operators or companies.

Skift confirmed with Airbnb that it takes a 20 percent commission for any Trips booked, unless those Trips are hosted by a nonprofit organization. In the case of a Social Impact Experience hosted by a nonprofit, 100 percent of the proceeds go directly to the organization.

How Places Work

The new Places section of the Airbnb platform encompasses Insider Guidebooks, of which we saw in an earlier version this year when the “Live There” campaign launched. The first versions of Guidebooks were collections of recommendations from local hosts. The new Insider Guidebooks are more highly curated, and let you “discover places through people.”

“You can have Experiences, but maybe you also want to go to places and check out local spots,” Chesky explained. “You can get a guidebook and it’ll tell you other things that other travelers will do. But it will recommend things locals would never do. An app may have thousands and thousands of restaurants and recommendations for you to sift through. We thought, let’s turn this on our heads. What if we led with people?”

Airbnb also debuted audio walks, for which the company partnered with Detour, to develop. Guests can listen to these audio logs while traveling.

The Places section also includes a Meetups function to enable Airbnb users to easily meet one another. “Everyday, we have thousands of people in cities around the wold,” said Chesky. “What if those people can meet each other? What if we can bring them together in locals spots? It’s totally free.”

Another function, called Nearby Now, shows users a map of what’s nearby. When a user taps on a certain attraction, they’re given community-curated information, tips, and advice.

Chesky also said that, “Soon, you’ll be able to book restaurant reservations directly through the Airbnb app.” The company is partnering with Resy, the same company that is partnering with Union Square Hospitality Group CEO Danny Meyer, to develop a unique customer reservations/resource management system. “Resy and us are going to work together where you can book a restaurant reservation in cities around the world,” Chesky said. Reservations will also include information about when to go and how it fits into your schedule.

How Homes Will Work

Chesky didn’t elaborate as much on the evolution of the company’s Homes product, which encompasses 3 million listings worldwide, but he did drop a few major hints.

“We’ve learned a lot over the last couple of years by building Experiences and Places,” he said. “We want to bring some of that magic into our homes.”

A brief demonstration showed the ability to book car rentals and order groceries from the “Homes” section of the app, and then, Chesky said, “There’s more,” and a screen appeared hinting at “Flights” and “Services.”

“We think we can bring more to both of these as well. This is literally just the beginning,” Chesky said.

Skift spoke to an Airbnb team member who gave us a demonstration of the new app. He said that, eventually, “Transportation” and other “Services” will be added to the app and that “Airbnb is currently working on these.” An example he gave was, “Let’s say you book an Experience that’s this awesome disco party but you don’t have anything to wear. What if we could find a way to deliver an outfit to you at your listing?”

Our hunch is that Airbnb Flights may have something to do with Airbnb’s recent airline loyalty partnerships, most recently with Delta Air Lines and Qantas and earlier, with Virgin America.

A Uniquely Airbnb Take on Tours and Activities

It’s clear that Airbnb Trips is not your traditional type of tour or activity and that’s a very purposeful choice on Airbnb’s part. Some examples shown in Chesky’s presentation included a three-day Immersion with the man who served as the prison guard to Nelson Mandela for 27 years in Cape Town, South Africa, to an Experience that gives travelers a firsthand lesson in Korean embroidery.

Last week, the company released a report, “How We Travel,” that explains, more or less, the company’s rationale behind building Trips the way that it has.

The report cites data compiled from two surveys conducted this fall: one of 1,750 British adults of varying ages who had traveled abroad in the last five years, and another of 1,000 online interviews with Millennials (age 18-35) in the U.S., UK, and China.

The data showed that 70 percent of travelers do so to seek out new experiences, whether that means living like a local (15 percent), going off the beaten path (15 percent), seeking the buzz (six percent) of something entirely new, or doing something else (34 percent). Airbnb also found that 42 percent of respondents said the people they traveled with made their vacations special.

Translation: Airbnb believes there is a market out there for it to capitalize on in terms of offering tours and activities to travelers who are otherwise missing out on these types of experiences, and the best way to have these experiences is through building a community.

On stage on November 15 at the Phocuswright conference, Airbnb’s global head of hospitality Chip Conley explained the difference between a traditional tour or activity and that of an Airbnb experience.

“Going to the Louvre or the Eiffel Tower, there are some bragging rights to that,” he said. “But going to a parfumerie in a back alley that you would never have found if you hadn’t had one of our experiences, or having dinner with a collection of people — locals as well as other travelers who have similar tastes or interests as you — that’s the kind of thing people remember for a lifetime.”

Paul Bennett, co-founder of Context Travel, a company that offers private guided and small group tours in nearly 40 cities worldwide, said he thinks Airbnb’s decision to not do traditional tours is reflective of a large market that’s ripe for growth.

“There are still people who will go on traditional tours, those follow-the-leader, go-on-the-bus kind of thing,” he said. “But there’s also a vibrant, dynamic, and growing demographic of people who don’t want to go on large group tours. They are experiential travelers who want to have a very different, unique experience in the city. That’s where Airbnb and other players like onefinestay have made such great headway in accommodations, in offering an alternative place to stay. And in the same way that, for this growing group of experiential travelers, the traditional hotel is dead, so too are traditional tours dead. Experiential travelers want to immerse themselves in a place and experience it in a very different way than a hop-on-hop-off bus provides.”

Why Not Work with Established Tour Operators?

London-based onefinestay, which was acquired earlier this year by AccorHotels, chose to partner with Context Travel to offer tours and activities for its guests in Rome, and soon, New York City. Context Travel bills itself as providing highly curated tours, all led by experts in their respective fields, and for onefinestay, which offers a more luxe and upscale type of home sharing experience, the partnership was a natural fit because of the company’s expertise.

Evan Frank, CEO and co-founder of onefinestay, told Skift, “We view our role to provide our guests the best of what’s available locally. Our view is that this partnership really exemplifies that. We know there’s assurance around the experience that our customers are getting when they work with such a great, established player. That’s why we went with an established expert.”

When asked if Frank saw this as an increasing hospitality trend, he said, “It’s hard to say. It’s kind of an old trend instead of a new trend. It’s certainly our job, and the job of any high-end accommodations provider to facilitate a great local experience.”

He does, however, see room for traditional perceptions of organized tours to change. “I think that, sometimes, traditional tour operators are associated with the bad parts of tourism — of not being local enough. What we’re really trying to facilitate is a local experience that’s curated and specific to our customers.”

The Evolution of Trips

The debut of Airbnb’s Trips didn’t happen overnight. In fact, it appears to be a product that Airbnb has been testing for at least the past two years, first beginning as a purely peer-to-peer type model. Long a passion project for CEO Brian Chesky, the company has invested a considerable amount of time into perfecting this product offering, which bore the internal code name, Magical Trips.

Chesky said the company was inspired by Joseph Campbell’s The Hero’s Journey, something that also sparked this year’s Skift Supertraveler Manifesto.

The prototype for the tours began, Chesky said, with Francisco, a gay traveler from Santiago, Chile, whom Airbnb brought to San Francisco for the first time two years ago. Chesky showed a film of Francisco’s journey, which included a quick tour, dinner gatherings, and dance parties with locals, many of whom were part of the city’s LGBTQ community. The short film ended with Francisco saying, “A weight has been lifted off me because I have nothing to hide.”

Peter Kwan, a San Francisco-based Airbnb host and co-chair of the HomeSharers Democratic Club, was a participant in the very early beta testing of what would ultimately become Trips. Two years ago, he was approached by Airbnb and asked if he’d like to participate in an experimental program they were working on. Skift spoke to him about his work on the pilot prior to today’s formal announcement.

“They said the general idea was to create these travel experiences for my guests and give them a richer experience of San Francisco that a host can offer beyond just accommodations,” Kwan said.

Kwan said that Airbnb recommended the book, The Art of Travel, by Alain de Botton, as a source of inspiration and that when he read it, he better understood Airbnb’s approach to travel.

“The general concept that I took away was that travel need not be, and should not be, the cookie-cutter bus tour, and that a meaningful travel experience involves a journey that’s both outward and inward, and sort of spiritual-like. When you leave home and go on your outward journey somewhere new, when you come home, you should not be the same person — it’s an interior transformation. That’s a rich travel experience and that’s what Airbnb wants to offer to its users.”

For his unique Airbnb tour, Kwan devised an experience that combined his love of cooking and the rich history of his neighborhood: a tour that took guests to nearby Fisherman’s Wharf to pick up fresh Dungeness crab and then a walk back to Kwan’s house in North Beach, which was historically an enclave for Italian American immigrants. At his house, Kwan would talk to guests about the history of the neighborhood, as well as show them how to prepare a crab cioppino, or seafood stew.

“Airbnb liked the idea and asked me to do it a few times,” he said. “I had a lot of fun.” Kwan said he didn’t get to choose which Airbnb guests participated in the tour (“they weren’t guests who were staying with me”) but that Airbnb covered the expenses for any purchases he made.

While he wasn’t paid for conducting these tours, Kwan said he would welcome being able to earn money from offering experiences like this, and wondered if Airbnb would help hosts who conduct these tours with pricing. “I think it has a lot of potential if it’s done right. As a guest, I would love to do this, to travel places overseas and relish a chance to hang out with someone local, learn local stories, and share it with new friends.”

In June 2014, Airbnb also piloted group dinners for strangers, encouraging its hosts to throw dinner parties for travelers, with Airbnb taking a cut of the costs.

At last year’s Airbnb Open in Paris, Airbnb partnered with VizEat, a European social dining platform that brought some 2,000 Airbnb Open attendees together with locals in Paris to break bread in the City of Light.

Kwan wasn’t involved in Airbnb’s most recent iteration of these experiences, City Hosts, but Lennon Flowers, co-founder and executive director of The Dinner Party was. City Hosts made its debut this June with just 36 experiences in five cities and by October, it grew to nearly 400 experiences in 12 cities worldwide, one of which was Los Angeles, where Airbnb is hosting its annual Airbnb Open conference.

The Dinner Party is a nonprofit community of people in their 20s and 30s who have each experienced some significant loss in their lives, and it organizes potluck dinners for members to share their stories with one another. Both Flowers and her fellow co-founder, Carla Fernandez, started the organization after losing a parent and, for them, the organization is a deeply personal way for people to connect with one another and talk about things that may otherwise be difficult to share in other settings. Since 2013, The Dinner Party has since grown to a community of 3,000 members, with 295 active hosts who throw potluck dinner parties across 231 tables worldwide.

During the City Hosts beta testing phase this year, Fernandez and Flowers hosted two different retreats in Los Angeles: each was a multi-part experience, called “Real Talk,” that began with a Dinner Party, followed the next day by a yoga and meditation workshop on the beach, and a writing workshop. The first pilot took place in September, and the price range for this type of experience is anywhere from $150 to $200.

“At first this pairing may seem odd, but both of our organizations are fundamentally about developing meaningful, trusting conversations and connections among people,” Flowers said. “City Hosts really caters to this sense of hospitality that we want to provide. One of the longings people have is for meaningful experiences, especially in places that are unfamiliar to them, and the most meaningful ones usually come from the conversations that you have and the relationships that you make.”

So far, Flowers said, feedback has been very positive, and she hopes Airbnb can become a platform through which The Dinner Party can enlist its own hosts around the world to host similar experiences in other destinations, thereby making money not only for the organization’s efforts to build communities worldwide, but also for themselves. (Airbnb doesn’t charge any commission for nonprofit partners.)

While Flowers is optimistic for this to evolve into something bigger, she said that if she has one concern, it’s that “we’re not professional hosts. We’ve got a nonprofit to run.” When asked if she’s concerned whether people will want to sign up for this type of experience, she pointed to the fact that she and Fernandez were initially concerned that they wouldn’t find enough people who wanted to join them for the first few dinner parties. That, obviously, didn’t turn out to be the case.

“People show up because they’re hungry to connect, and to have an experience they can take back with them,” she said. “Loss, and a desire to live well after, are a part of the stories so many of us share.”

Owning More of the Customer Journey

The addition of Trips, Places, and the evolution of Homes to Airbnb’s product suite is confirmation that the company is, indeed, moving beyond homes and that it is becoming much more than just an accommodations platform.

Airbnb’s Conley confirmed this when he spoke earlier this week, saying: “Our goal is to become the super brand of travel. We want to help people not just with accommodations but with experiences as well.”

When the company debuted “Live There” in April, it also included digital “Guidebooks” to inform guests about what to see, do, eat, and experience in various cities around the world.

With Trips, it’s selling those actual types of experiences to them, directly. With Places, it’s enabling travelers to have access to highly curated local recommendations from a variety of insiders, from celebrities to bloggers. The Places and Homes functions will also serve as way for Airbnb to own the in-destination experience as well.

Airbnb also earlier unleashed more advanced technology that would help the platform better “match” guests with listings that matched their preferences, and there’s no doubt that same technology will be used to match guests with the right Experiences, Places, and Homes.

This idea of immersing guests into a neighborhood or destination is something that a number of hospitality companies, not just Airbnb, are striving to accomplish these days. Not just because it’s an additional revenue stream, but because it also strengthens the brand’s relationship with the guest.

“The accommodations companies out there, they have a problem. They see the customer at check in and check out,” said Context Travel’s Bennett. “But when they say goodbye to the guest at the door they’re missing a huge opportunity. That guest goes out into the destination and has an experience separate from their accommodations. Maybe it’s good. Maybe it’s not. But it’s definitively impacting their trip. A few of the accommodations companies are starting to wake up and understand that by getting into experiences themselves they can own much more of the customer’s mindshare. Experiences can become a part of loyalty — but a revenue positive part rather than a cost, which is interesting.”

By offering tours and activities to guests, Airbnb is further strengthening its message of giving its global community the opportunity to truly live like a local. And the company is also addressing a common disadvantage of staying in an Airbnb: namely, a sense of isolation or detachment for guests who stay in an Airbnb without a host who is present, or a host who isn’t particularly involved in helping shape his or her guest’s experience.

This disadvantage was mentioned by The Standard Hotels managing partner Amar Lalvani and Bunkhouse Group founder Liz Lambert at the Skift Global Forum. Lambert is scheduled to speak at the Airbnb Open conference this week as well.

Lalvani said, “Liz and I have been successfully building community around our hotels and bringing people together into our public spaces. That is what our brands are all about, and while we’re both big fans of what Airbnb is doing, that’s something that Airbnb can never do. So we think we’re incredibly well-positioned as the sharing economy grows.”

So, whereas Airbnb may not own any physical spaces with which it can bring people together, it’s clear the company has found a way to do just that not only through its home sharing platform but now, through its tours and activities platform as well. Airbnb is facilitating those connections, making them a part of the user’s overall travel experience, and further strengthening its brand value to its global community of 100 million users.

Moving Toward Mobile

Having this type of app that combines so many different functions, all in one platform, also strengthens Airbnb’s ability to have a stronger emotional connection with its community of users, and to be a part of the actual in-destination experience, primarily through mobile. Without this functionality, there wasn’t much incentive for guests to use their Airbnb mobile app once they arrived in their destinations and already had confirmed Airbnb bookings.

Earlier this year, Airbnb debuted a new version of its app to coincide with the launch of “Live There.” In August, the company also momentarily released a standalone Airbnb Trips app on the Google Play story.

Whereas traditional online travel agencies (OTAs) like Expedia and invest heavily in search marketing, Airbnb is setting its sights on mobile by making its app more holistic, and giving travelers more reasons to use it on a regular basis.

Earlier this week, Conley said, Airbnb doesn’t “want to be a transactional business. Most OTAs are transactional businesses. We want to be a transformational business because margins are better, but not just because margins are better. Because we want to actually transform people’s lives.”

Will Airbnb Trips Succeed?

Rod Cuthbert, CEO of Rome2rio and founder and former CEO of Viator, a tours and activities provider that was acquired by TripAdvisor in 2014, said Airbnb already has an advantage over the competition when it comes to entering the tours and activities space.

“The challenge of getting into the tours and activities business isn’t about supply,” Cuthbert said. “It’s about access to users, about discoverability and traction. They don’t have that problem at all. That just overcomes the greatest barrier that any of the new entrants into the space have had over the last 10 to 15 years.”

Because Airbnb is taking a different, more curated and highly specialized approach to its tour offerings, they’re able to reach a group of people for whom pre-packaged, organized tours are undesirable. In other words, Airbnb is offering the kind of tours that people who wouldn’t normally book tours might be interested in.

“It makes sense for them to do the ‘un-tour,'” Cuthbert added. It’s totally consistent with their branding. It keeps a percentage of their hosts really engaged and really in love with the Airbnb company. The outcome Airbnb might be hoping for is that people will say, ‘I booked my tour on Airbnb, and it was really great and authentic. It wasn’t a tour guide or anything like that. It wasn’t one of those pre-packaged tours.’ I’m sure they would like that differentiation to evolve.”

“I think the pre-packaged tour is dead,” said Bennett. “The concept they have is great — to be the Airbnb of tours. To be able to have a wide range of different experiences and be able to book them is great.”

However, Airbnb will have to make sure it offers the right kinds of experiences that people will want to book, and at the right price. A quick glance at the Trips offered for Los Angeles, for example, shows a price range of $30 to $600. Will travelers be willing to spend more than $200 for more than half of these Trips that are currently being offered?

In some ways, Airbnb will also have to work extra hard to convince travelers who have deeply ingrained opinions that any kind of organized tour or activity might just be too touristy or well, uncool, no matter the price tag. The “Live There” campaign was certainly a start, at least.

Max Valverde, chief commercial officer of Denver-based tour software provider, Fareharbor, spoke to Skift prior to the announcement and voiced some skepticism. He said that if Airbnb attempts to pair this product with its Friendly Building program, which is encouraging property rental management companies and landlords to Airbnb units, “it would be a stretch.”

He also said, it’s not simple to be a tour guide, just because you know or live in the area, and he thinks quality assurance will be an issue if Airbnb isn’t working with licensed tour guides.

Cuthbert believes Airbnb’s current review system and feedback loop will be able to address any issues of quality, and Bennett also agrees, up to a point.

“It’ll be a self-regulating marketplace, I think,” Bennett said. “They will also have to layer in that traditional hospitality management, too. An algorithm just gives you a number, but there’s a pattern they’re going to have to follow with each docent or guide or activity to know what’s working and what’s not. They are going to need that traditional hospitality approach if they are going to succeed in this space.”

As far as other potential hurdles go, Bennett also thinks there may be some logistical challenges Airbnb’s new tours product will also have to overcome, including whether they choose to take travelers to attractions. He said, “It may be difficult to take travelers to those locations due to guiding regulations and/or ticketing logistics — both things that require a traditional tour supplier apparatus to handle.”

Another potential challenge for Airbnb? How to also address issues of safety and security on these Trips. Airbnb’s regional director for North America, Andrea La Mesa, who worked on developing Trips, said the company has an insurance policy and measures in place to address safety and security, but didn’t elaborate on how extensive those were.

The only problem Cuthbert thinks Airbnb might encounter is “becoming wildly successful too quickly and becoming capacity driven.”

“It’s a big space in terms of the number of people taking tours and the percentage of people who are booking them online remains really low, like less than 25 percent,” Cuthbert said. “We’ve seen a couple of players like Viator, Expedia, and GetYourGuide build significant businesses. But essentially, and I don’t think those companies would mind me saying this, but they are all doing the same thing, the same types of products are being sold in the same kind of way. This is good for the marketplace, having someone doing something new increases the size of the model, and consumer awareness and uptake. It’s great to have new players coming in with a new approach to the marketplace.”

“You know, the travel world is big enough for us and the big bus tour companies,” Conley said on Tuesday. “Some of us want the big bus tour companies. But I think what a lot of people also want is the bespoke, unique, hidden treasure experiences that they can’t find in a guidebook, and they have to ask their friends about. That’s what using technology and a community as large as ours can allow us to offer to the world that hasn’t been offered yet.”

As skeptical as he is about the logistical and quality-control challenges involved in this new product, Valverde acknowledged there’s a chance Airbnb has some “secret sauce,” and the increased exposure for the tours and activities market that this will bring will be a boon for the entire industry.

Building a Global Community of Travel Through Its Platform

Chesky ended his presentation by saying, of the company’s entire suite of new products: “Most important is this: Everything that we do, and everything we will do will be powered by people. A lot of tech companies tend to talk about the magic of the technology and making things really easy. The magic is, always was, and always will be, in the people. If you have passion, if you have an interest, or if you have a hobby, you can share your community with others in the world because, you see, travel has never really been about where you go but about who you can become. This is something that we would love to be able to build together. We invite you to join us in this adventure, together.”

As far as Kwan, an avid Airbnb host and guest, can tell, he has high hopes for the future of Airbnb, as he told Skift, prior to today’s big announcement.

He said, “Airbnb is trying to be much more than a different kind of place to stay when you’re traveling; it has the ambition to transform how people travel. Look at Starbucks, for example. They’re not just selling you coffee; they’re selling you a living room where you can enjoy that coffee. They’re selling you an experience. With Airbnb, it’s the same way. It’s about sharing a space with strangers and getting to know different people and a different land. It’s no longer just a place where you sleep at night.”

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Tags: airbnb, context travel, gogobot, onefinestay, rome2rio, tours and activities,

Photo credit: Airbnb CEO on stage at Airbnb Open to announce its new products. Skift / Airbnb

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