Turns out it is more than a trial balloon, after the announcement of possible flight search at Airbnb Open last month. The margins are tiny in flight search, not sure why it would be better than any other OTA, other than it has lots of traffic coming to Airbnb.
Airbnb Inc. is developing a service for booking air travel as the home-rental startup looks to compete with Priceline Group Inc. and Expedia Inc. for more of people’s online travel spending.
Development of the flight-booking feature is early, and the company is considering various routes to break into the business, said people familiar with the plans. Airbnb may acquire an online travel agency or license data from a provider, such as Amadeus IT Group SA or Sabre Corp., said the people, who asked not to be identified discussing unfinished products. Within the company, the project is simply known as Flights, the people said.
Airbnb aims to get Flights off the ground before it pursues an initial public offering, which is likely in the next 18 months, the people said. Nick Papas, a spokesman for Airbnb, declined to comment on the flight-booking plans and said the company doesn’t plan to go public in the near future.
Since it started eight years ago, Airbnb helped create a global industry out of staying in strangers’ home. But the company is hoping to find new sources of revenue as it matures. Last month, it added tours, restaurant reservations and other travel services with an initiative called Airbnb Trips. The startup, which was valued at $30 billion by investors this year, has said it wants to be a destination for planning a person’s entire vacation, not just a place to stay.
Moving into flights would be a shot across the bows of Priceline and Expedia, which operate the largest sites for flight searches and bookings. Margins in online travel are typically higher in hotels and property rentals, but flights help draw people to the sites. Alphabet Inc. pushed into the space in 2010, when it acquired airline data provider ITA Software for $700 million to bolster its own flight-search tools.
Steve Hafner, chief executive officer of flight search website Kayak, said last month that many accommodation companies have tried unsuccessfully to break into flight search. “I’m not really worried about Airbnb getting into flights,” he said at a conference.
Airbnb CEO Brian Chesky gave a presentation last month in Los Angeles, where he showed off new designs for the company’s website and apps. One image contained a small airplane graphic in a section called Trip Itinerary. This is where Airbnb intends to provide suggestions for the best airfare options based on price, travel time and expected weather conditions, said the people familiar with the plans.
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Photo credit: Soon Airbnb could be booking airline passengers, in its attempt to own all of travel. Matt York / Associated Press