5 Challenges for Airbnb Experiences

Key Points

• Airbnb aims to build a $1 billion experiences business but faces slow sector growth, challenging unit economics, and stiff competition from industry leaders like Viator and GetYourGuide.
• Key hurdles include small transaction sizes, misaligned booking behaviors between stays and experiences, and the difficulty of maintaining high-quality offerings at scale.
• Airbnb also struggles with selling experiences to both travelers and locals, a strategy that has not worked well for other travel companies in the past.

Summary

Airbnb's ambition to create a $1 billion experiences business is hampered by slow sector growth, less profitable transaction sizes compared to hotels, and the challenge of getting travelers to book both stays and experiences. Competing with established players like Viator, Airbnb must onboard many smaller providers and maintain high quality, all while trying to appeal to both travelers and locals—a dual audience strategy that has proven difficult for others in the industry.