Airbnb’s recent acquisition of event space booking service Gaest represents a long-awaited strategic investment by the company in the meetings and events space after toying with the sector through its Experience offerings and a widget aimed at getting event attendees to stay at an Airbnb instead of a hotel.

Gaest’s small staff in Denmark has joined Airbnb, although the Gaest platform is expected to operate independently of the Airbnb brand for the time being.

While Airbnb is known for shaking up the traditional hospitality industry, a move into meetings through Gaest won’t prove to be disruptive. Adding a small booking site for meeting space makes sense for Airbnb as it grows, and ties into its existing business verticals well, but the event sector at large is in need of a wider evolution of the planning and marketing process.

So why Gaest? The company’s business model is similar to Airbnb’s; hosts, or in this case venues, sign up for the platform and consumers, or businesses, book meeting space. Unlike Breather or Convene, which actually own the real estate they sell access to, Gaest is a platform for event space listings like Airbnb is a platform for homestay listings.

During an interview with Gaest CEO Anders Boelskifte Mogensen in April 2018, much of the discussion was about riding the line between becoming a platform oriented towards corporate hotel space bookings and getting cool, interesting venues and restaurants on the platform as a differentiator. Mogensen is now, after the acquisition, Airbnb’s lead for meetings and events in Europe, the Middle East, and Africa.

“Last year, 50 percent of our bookings came from the traditional suppliers with competing industries at hotel conference centers [and similar locations],” said Mogensen. “And the other 50 percent came from creative art galleries or companies with some cool meeting spaces that they listed on Gaest. Even creative private homes that were curated and suited for a small business [meeting].

“So we have that kind of mixed on the platform. That was a decision we took from the beginning that we wanted to appeal to the industry and give them a platform to sell their meeting space online, but also to be open on the creative side of things. So, in that sense, you can say we’re more of a Booking.com than we are an Airbnb, right?”

Well, now they are Airbnb. As a two-sided marketplace, Gaest makes money by taking a 10 to 25 percent cut of each transaction from the venue side and a booking fee to cover credit card costs. Mogensen said hotels are usually charged a 10 percent commission, which is very low for the corporate space.

Gaest also adopted a strategy of employing people in various global cities to help sign up venues, instead of focusing on Europe where they are based. This wider global reach was certainly attractive to a potential suitor like Airbnb, although sources say there aren’t many listings on the platform right now.

Another interesting wrinkle in Gaest could have an impact on Airbnb’s overall business. The company partners with local restaurants and caterers to bring food and beverages to their meeting space. It’s easy to see how these relationships can fit into homestays (want a catered dinner?) or experiences (have a nice lunch after your surfing lessons). It’s also possible for Airbnb to sell event space to users offering Experiences, capturing more revenue in the process.

Despite the lack of content compared to players like Cvent, HotelPlanner, MeetingsBooker or Groupize, it would seem that organizers putting together small events are willing to pay more for interesting spaces.

“We see interesting things that price-wise, people are happy to pay a quite high premium when they rent to these creative spaces on Gaest,” said Mogensen. “That equally matches or even exceeds what they would pay at a four- or five-star hotel for the same offering. And we add the extras that they add in like food and beverages or [things like that], that proves to me that there’s a business in its own right for what we do, that the value of bookings that we’re driving is actually high.”

The biggest opportunity in terms of driving revenue, though, could be convincing traditional Airbnb hosts to offer up their space for meetings on an hourly basis instead.

“A fun thing that we’re seeing is that if we look at the price that some people are listing on a site like Airbnb for the accommodation aspect of the use of their home, what I can see with Gaest is that some of them that have moved from Airbnb to Gaest,” Mogensen said. “When they rent out a 24-hour accommodation on Airbnb, [they may get] $200. They make that in a three-hour meeting on Gaest today.”

It’s easy to see how Gaest can be rolled into Airbnb for Work, as well, giving travelers or administrators more flexibility to organize meetings on the same platform they’re booking lodging. For what was likely an affordable price, Airbnb just acquired a team already doing Airbnb for events, eliminating the need to build their own platform.

The Bigger Picture

Airbnb for meetings and events sounds good, but it’s been done before and hasn’t really caught on. Much venture money has certainly been raised with this pitch already. Gaest makes sense as an arm of consumer-centric Airbnb, diversifying its offerings for hosts and corporate customers before an initial public offering, but not as a disruptor in the overall meetings and events space.

The bulk of meeting space bookings are placed through arcane processes involving request for proposals, and small meetings tend not to be moneymakers for hotels. It’s notable that Gaest and Airbnb aren’t looking to target hardcore meeting planners with the platform, but employees and administrators instead.

What would it actually look like in reality to create something truly disruptive in meetings and events technology, then? The booking piece is an intractable and entrenched mess, so the major opportunity likely sits on the marketing and technology side. Using marketing data and internal metrics to drive business and better quantify return on investment for events, though, is due for a revolution.

Companies like Freeman, Social Tables, Splash, and the various members of The Event Tech Tribe are working on solutions to solve elements of the friction.

“Airbnb is basically trying to take the product/market fit they had in homestay and apply it to other things,” said Ron Shah, CEO of event management platform Bizly. “They didn’t build Expedia for peoples’ homes. If you look at the venue booking businesses across the space, none of them have become unicorns or breakout successes because they’ve created this Airbnb-style thing and that is not the right product for the market. Solving the events and groups business will require an innovative product that goes beyond Airbnb for venues.

“Winning in this space globally is going to look a lot more like Google Analytics than it is Airbnb. The employees and company doing small events know they have to do them, but they’ve never had the analytics to find their impact.”

The event technology stack today is complex, with organizers often using a variety of different services for the different pieces of event management. Getting the different pieces to talk to each other, and produce actionable insights, is a challenge.

As data between the different services gets put to use, planners will be armed with not only the tools to prove they’ve put on a productive event but the information to improve their events and attract more attendees.

Planners may find new booking interfaces useful, particularly when instant booking becomes a reality, but they really need an overhauled way to organize and control all the other aspects of the event lifecycle. Soon, someone is going to deliver this and truly disrupt the space.

Photo Credit: Airbnb signs on a road somewhere. Bloomberg