Expedia and Airbnb Bosses Have Conflicting Visions About the Future of Travel

The heads of two of the largest U.S.-based online travel companies, Brian Chesky of Airbnb and Peter Kern of Expedia Group, have gazed into their crystal balls and conjured clashing visions about the future of travel.

Kern argued last week during an earnings call that “travel is like water, it finds its way.” If travelers can’t fly internationally, they’ll drive domestically, and choose short-term rentals if they consider hotels unappealing, Kern said, adding that Expedia hasn’t found anything to indicate “there’s a long-term behavioral change” that would grow out of Covid-19.

Kern recalled that after 9/11, pundits predicted that travel would change “forever” and New Yorkers would abandon New York City in droves, but that didn’t happen. “I am not one to believe that anything about what we’re going through will be permanent,” Kern said.

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Booking Holdings and Tripadvisor executives have made similar statements about travel eventually settling down, and coming to resemble its former self.

Airbnb’s Chesky, conversely, has contended that travel will never, ever go back to the way it was pre-Covid.” Chesky has said that travelers will eventually fly again, but there will be “a fairly permanent shift” to less-congested destinations, and short-term rentals rather than hotels.

Of course, Chesky’s “never, ever” is a very long time.

I think Chesky’s could be wrong about a long-term era of travel redistribution to off-the-beaten path destinations. There will certainly be some of that. And this would be such a welcome development on so many levels. But when Barcelona reopens on a solid basis, will tourists really stay away and opt instead for Pueblo de Sanabria?

And where are the data that vacation rentals will be inherently safer cleanliness-wise than hotels? Lots of hotels will indeed never reopen, and perhaps boutique hotels will get reinvigorated, but the hotel industry indeed has a future.

Rocky Road

I agree with Kern that travel is like water and will find its way, but the currents may shift willy-nilly for a very long time. We could be in for an era of “micro stories,” as Expedia Chief Financial Officer Eric Hart described current market conditions, where, for example, North America and Europe, Middle East and Africa rebounded somewhat in lodging, but Asia-Pacific and Latin America lagged. In Expedia’s flights’ business, North America and Latin America bounced back a bit, but EMEA and APAC didn’t.

Vaccine or no vaccine, the travel industry is in for a rocky few years. Was Covid-19 a one-off event? What about the next pandemic? Throw in ever-increasing climate disruptions, and Kern’s vision of traveler behavior reverting to a semblance of normalcy isn’t necessarily a done deal, either.

With such uncertainty looming, perhaps specialist online travel companies like Airbnb will be disadvantaged compared with Expedia, Booking.com, and increasingly Google, all of which can offer travelers any accommodation type rather than pushing one category such as short-term rentals.

Of course, Airbnb had been poised to invest further into hotels as a diversification move, but Covid-19 has delayed those plans for now. If Airbnb goes public, those hotel investments, with its HotelTonight brand as a foundation, could indeed be back on the table.

In Brief

Booking.com and Expedia Tout “Stays,” Not Hotels and Vacation Rentals

The top of Expedia.com’s homepage no longer lists Hotels or Vacation Rentals, but now lumps them into Stays. Same treatment at rival Booking.com. Google Travel, as do many others, still lists Hotels and Vacation Rentals as separate categories. But you can appreciate the extent that lodging categories are blurring when even a Hotels.com video called “Places” touts Hotels.com as “the best place to book a place.” YouTube

Booking.com to Cut 25 Percent of Its Workforce

While the CEOs of Airbnb and Expedia Group may offer competing — and sometimes self-interested — visions about the future of travel, Booking.com and Accor, which both announced deep cuts to their workforces Tuesday, seem to agree on one thing. The immediate future of travel will be a much smaller one. Skift

Airbnb and Expedia Set to Clash Over San Diego Rentals

As a global publication, we wouldn’t normally pay such close attention to a short-term rental regulatory skirmish in one U.S. city, but a looming conflict in San Diego, California seems special. Facing an outright ban from the city, Expedia Group negotiated a memorandum of understanding with the local hotel union, which is trying to protect jobs. The tentative pact would allow for some 4,800 legal rentals, but Airbnb wants a lot more. Skift

Ryanair and Skyscanner Face Off in Ireland Court

The years-long screen-scraping battle between airlines, online travel agencies and metasearchers proceeds anew in an Irish court. Ryanair failed to get a preliminary injunction against Trip.com Group’s Skyscanner unit that would have forced Skyscanner to furnish the airline with customer email addresses. That’s an especially hot-button issue with flight cancellations running amok. The Irish Times

Meituan and Alibaba in Turf War

Two Chinese Internet giants, Meituan and Alibaba, are battling over local services such as food delivery. They both are significant players in online travel, as well. In the latest skirmish, Meituan removed its customers’ ability to pay for services using the ubiquitous Alipay. This will get uglier before long. Technode

Ex-Sonder General Manager Becomes a Regulator

The usual transition is regulators landing lucrative jobs in the private sector with companies that they formerly oversaw. But the reverse just happened in New Orleans, Louisiana, where former Sonder General Manager Peter Bowen, who left the post in early 2019, just became the deputy chief administrative officer for land use in the city. He’ll play a role in regulating short-term rentals. The Lens

Note: Dennis’ Online Travel Briefing will take a one-week vacation next week, and will return August 19.

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