Doubters may still question Airbnb’s foray into tours and experiences, but say what you will: The growth of the business has been anything but insignificant. The real success, however, will be in making it a quality-driven endeavor.
Hundreds of the travel industry’s most-forward-thinking executives will gather for our third annual Skift Forum Europe in London on April 30. In just a few years, Skift's Forums — the largest creative business gatherings in the global travel industry — have become what media, speakers, and attendees have called the “TED Talks of travel.”
Focusing on responsible travel practices and other key issues, Skift Forum Europe 2019 will take place at Tobacco Dock in London. The Forum will feature speakers, including CEOs and top executives from British Airways, IHG, Thomas Cook, Booking.com, TripAdvisor, Silversea, Uber, and many more.
The following is part of a series of posts highlighting some of the speakers and touching on issues of concern in Europe and beyond.
When Airbnb first launched Experiences — then known as Airbnb Trips — in 2016, it was a huge gamble. It marked the company’s first major product outside of its core business, Homes, and it was an endeavor years in the making.
And while the business has grown significantly since then, it hasn’t been without its challenges. There were reports of the division not turning a profit, and not growing quickly enough. Never mind the fact that the tours and activities business is an incredibly fragmented and, in some ways, one of the least sophisticated sectors in all of travel, making it that much more of a challenge to break into and to succeed.
But three years later, under the guidance of Joe “Joebot” Zadeh, one of the company’s longest-tenured employees who took over as VP of Experiences in June 2017 after serving as the company’s VP of Product, Airbnb Experiences seems to be thriving.
Skift spoke to Zadeh about how the business continues to evolve, and where he sees Experiences within the larger vision of Airbnb’s goal of being the ultimate end-to-end travel platform.
Skift Editor’s Note: This article has been lightly edited for length and clarity.
Skift: It’s been nearly three years since Airbnb launched Experiences and in that time, it’s grown significantly. How has growing this business differed from how you and the team grew homesharing?
Zadeh: Since launching in November 2016, Airbnb Experiences has seen incredible growth. We now have more than 30,000 Experience listings available in over 1,000 cities globally, and we started with 500 in just 12.
Unlike Homes, we didn’t start from scratch; every night we have millions of people staying in accommodations booked through Airbnb around the world. It’s clear that our Homes business paved the way for us, creating a foundation for end-to-end travel that started with accommodation and accelerated the growth in Experiences.
We also started Experiences with years’ worth of understanding of how people like to travel. Our Homes business taught us that people want to travel around their interests and so we built a platform that offers a wide range of activities offered by local experts to keep it uniquely Airbnb. And to attract these experts, it also helped that there was a sense of familiarity to the concept of hosting.
What has always been exciting about the Homes business is the ease to entrepreneurship — at the beginning it was simple; all you had to do was share your home. With Experiences, we see even more potential to support people in this way as it has an even lower barrier to entry; all you need is a passion and the time to share it.
There are distinct differences, though. Being a passion-led business means that there are endless possibilities for Airbnb Experiences. From paragliding to pasta making, “mermaiding,” to music, this isn’t just tours or activities, it’s real-world entertainment complete with many different genres.
That’s why we are starting to grow Experiences by categories; we’re looking at groups of passions such as food tours or concerts and working to redefine them with our own recipe. People don’t have to book experiences when they travel, but they do need to book somewhere to stay. That changes our approach to how we’re growing and marketing supply for Experiences; we are offering a distinctly unique product that people want and are willing to commit time to when they travel, but wouldn’t be able to find on their own.
Skift: What have your biggest challenges been when it comes to overseeing and growing the Experiences business?
Zadeh: Hypergrowth has encouraged us to be all the more rigorous when it comes to quality. Last year, we focused on global expansion and did this at an incredible rate, jumping from coverage in around 60 cities to over a thousand.
With growth like this, it’s important to maintain quality — especially as that differentiates us — and so we have been keeping a very close eye on this to avoid diluting what makes us special. It helps that we are a managed marketplace and that each Experience is vetted by our team. The majority of submissions don’t hit our high standards, and although we work with hosts to improve what they are offering, many just don’t make the cut. It’s paying off; over 90 percent of reviewers are giving Airbnb Experiences five stars [in reviews].
We have an ambitious vision to revolutionize the tours and activities industry, and we’re constantly learning from our hosts and guests. For example, we created Experiences with the idea that they would be transformational and launched with the concept of multi-day Experiences that would immerse guests into the world of a local.
But not everyone was ready to commit to immersions, especially as they were initially concentrated in cities and introduced when guests were just learning about Experiences. We reacted to guest demand, and now our primary product has evolved into much shorter Experiences within a morning, afternoon, or evening. Having said that, we are still thinking about immersions.
Travelers are now more familiar with the Experiences product and responding well to the magic that our hosts bring through their unique perspective, expertise, and distinct local knowledge. Because of this, we are confident that there is appetite for multi-day trips and look forward to reintroducing this concept in the near future.
Skift: There have been reports that Experience has not been profitable. Has it since obtained profitability?
Zadeh: I’m not going to go into details about our financials, but the incredible success of Experiences has made it clear that there is a tremendous opportunity to double down on this business unit and make new, aggressive investments in our long-term growth. That’s exactly what we have done.’
We don’t look at Experiences as a short-term thing. We’re building for the long haul, and our commitment to the Experiences business has never been stronger.
Skift: Tours and activities are regarded as one of the last frontiers left to be conquered in travel. This part of travel is still often very fragmented and not nearly as sophisticated or mature as other sectors are when it comes to distribution and operations. How are you addressing that with Experiences and where do you see this sector overall evolving?
Zadeh: While there are plenty of businesses out there offering tours and activities, there has been very little offline innovation. Booking platforms have been focused on making the same tickets, tours, or activities easier to find and easier to book. They haven’t been focused on making the experiences themselves better.
Airbnb Experiences was created out of the belief that travel is broken; we want to offer something more authentic and less mass-produced by unlocking a different side of destinations through the eyes of locals. Finding and maintaining this unique, high-quality supply is key to how we operate and fundamentally how we are different.
As we go forward, we are developing some of the most popular categories of Experiences. In recent months, we’ve hired a number of different category leads, including Food and Drink, Entertainment, and even Animals. Their whole job is to build exceptional inventory in these categories and to ensure we’re delivering the kind of unique experience our guests expect.
That’s where we will win: giving people access to experiences that are different from the traditional tours and activities space. We have big goals and we won’t get there overnight, but we think we can revolutionize the way that people spend their time.
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Photo credit: Airbnb's vice president of experiences, Joe Zadeh, says the company is doubling down on its efforts in the tours and activities sector. Airbnb