Connecting people with host experiences unique to the destinations they visit fits snugly into the Airbnb brand. But the scalability of these experiences is in doubt and the strategy for moving ahead has not been publicly communicated.
Airbnb’s pause in onboarding new experiences has raised questions about its long-term strategy.
As first reported by Skift, what the company has quietly done, in addition to stopping the onboarding of any new experiences, whether from current experiences’ hosts or new ones, is to remove these tours and activities from the Airbnb homepage.
A snap look at Airbnb’s homepage via the Wayback Machine shows that a year ago, in April 2022, travelers could select these tabs, Places to Stay, Experiences and Online Experiences.
In May 2022, Airbnb launched its new categories search that favored stay options, with experiences only searchable after activating an accommodation search.
A look at the homepage in April 2023 shows experiences remain ghosted out of sight, even though Airbnb reactivated Experiences towards the end of September last year — it hasn’t been given the same love and attention as before.
Wayback Machine View of Airbnb Homepage in April 2022
Airbnb Homepage April 2023
Iconic vs Niche Experiences
The pause on new applications to launch Airbnb experiences is “big news, but not totally unexpected,” said Go City spokesperson Baidi Li, former regional director Asia Pacific and Middle East and Africa at Tripadvisor’s Viator. Li said that “despite all the digitization and consolidation in the past years, this vertical is still very fragmented.”
Li pointed to an issue with Airbnb’s approach to experiences. “Experiences supplied by Airbnb hosts are passion projects and it’s never about scaling,” Li said.
She added that it was a “totally sensible decision,” for Airbnb to pause new experiences, noting that to continue to grow a sharing economy product at scale, “Airbnb has to focus on its core business to be able to run faster.”
“I hope in Airbnb’s next chapter, they will be open to take on some mass market products through partnerships. Ultimately both iconic attractions and niche experiences are contributing to the characteristics of a destination, and I hope we can offer that holistic experience to travellers,” said Li.
But a partnerships strategy is the conventional online travel agent approach, which is essentially what Airbnb Experiences has tried to do differently. The tours and activities landscape, while not only fragmented, remains highly competitive.
Asked to comment on the news that Airbnb paused news experiences, tours and activities platform GetYourGuide co-founder and Chief Operating Officer Tao Tao said “experience platforms have their own unique set of challenges for operators, customers, destinations and technology platforms than other travel segments, such as accommodations and flights.”
The implication was that experiences need intense focus to scale.
“There is a clear market need, we’ve experienced multiple record-breaking days in the past year. We are dedicated to simplifying growth for partners while creating a great experience for customers,” said Tao.
Like GetYourGuide, TUI Musement, which has the backing of one of the largest in-destination teams in the industry, didn’t comment directly on the Airbnb step back in experiences.
A TUI spokesperson added, “We are excited about the growth opportunities in tours and activities, and continue to evolve our experiences offering, focusing on quality over quantity.”
The company has just added flexibility to its tour offering through dynamic packaging with flights and stays, via its own direct booking platform.
‘They’ve Dumped Experiences’
One Airbnb host, who preferred not to be named, believes Airbnb has already “dumped experiences” since it is nowhere to be found on the homepage, not in filters or in the footer.
“A reinstall of experiences is unlikely but they don’t want to say it publicly, the host said.”
Another host, Fabio Santuccio, who has been running his Sicily farm experience on Airbnb Experiences since it started, felt the pause was a good thing, and remained optimistic that the performance of experiences means they would be “unlikely to be removed completely.”
He believes the platform had been overrun with options that aren’t really experiences, to the detriment of quality.
“Somebody with a few lemon trees and nice photographs is not a farm experience,” he said.
While the business coming from Airbnb for his three farms is seasonal, he said the online experiences brought in during the pandemic had given his business stability, with the 20 percent commission paid to the platform being worth it when compared to the “chaotic, repetitive offerings and display” of other platforms he had tried.
Santuccio broke his bookings down using the example, “100 Airbnb Experiences booked versus 0.5 to Viator.” He claimed his inquiries during peak season were at least four per day on Airbnb but he limited his offering to three slots a week with a maximum of 8 people. He added that Airbnb accounted for 50 percent of his bookings, 30 percent come through private tour operators, and the remaining 20 percent get booked directly.
“I am working in the tourism industry and know how unstable it is, and quality creates stability,” he said.
Perfecting Core Services
After a pause of Experiences of almost two years during the pandemic, Airbnb’s relaunch of Experiences in 2022 didn’t go according to plan as the company said in a statement Thursday that it is now “perfecting its core services,” including Airbnb Experiences.
A Skift analysis previously questioned Airbnb’s ability to build a profitable tours and activities business, which was differentiated through locals hosting the tours. However, Airbnb in 2020 calculated the total addressable market for experiences at some $1.4 trillion, just behind its accommodation offering.
Bernstein analyst Richard Clarke suggested Airbnb might be preparing to unveil a business to business approach, similar to Viator’s partnership with TUI Musement and Expedia with Get Your Guide. This would enable it to offer a completely new segment such as ticketing, said Clarke. A pause would also help it prepare for this kind of integration.
“Airbnb already owns a stake in a more standardised Experiences platform – Tiqets – which is not integrated into the core Airbnb offer; having acquired this stake just before the pandemic (October 2019) potentially now is the time for a more formal integration,” added Clarke.
Dan Wasiolek, senior equity analyst at Morningstar, said a pause on applications shouldn’t equate to a pause in investment into experiences, adding that Airbnb “should be able to add unique experiences and provide incremental growth and profit to the profit and loss.”
He added that Airbnb’s strong liquidity position and cash-flow generation means it should focus on hiring back some of the labour it cut during the pandemic if that is what’s needed to improve the alternative accommodation core offering and get the experience offering going.
“While there is work to be done on its core alternative accommodation offering (improving the value of the platform for hosts and travelers and integrating AI), the experience vertical opportunity fits well with the company’s individual host and communal culture,” said Wasiolek.
CORRECTION: Skift erroneously reported that Airbnb recently removed Experiences from its homepage. That happened in May 2022.
UPDATE: This article has been updated to include Bernstein analysis related to Airbnb’s stake in Tiqets.
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Photo credit: Girl at Hobbiton Village Experience. Source: Unsplash Lakerain Snake / Unsplasj