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A look inside Airbnb’s hotel game

The homesharing giant ramped things up in March when it announced it would open its doors wide to allow boutique hotels and bed and breakfast-types to advertise properties directly on the company’s site. In addition to tiptoeing into the OTA waters, it also serves another purpose, according to Airbnb Hotels Program Manager Cammy Houser, who says that the company saw interest around the initiative from over 1,600 hotels in just two months — and that was before the official launch.

Airbnb co-founder Brian Chesky at an Airbnb event in February
Airbnb co-founder Brian Chesky at an Airbnb event in February

“The travel industry is massive and has been growing every year since Airbnb was formed,” Houser says. “There are many different types of travelers looking for many different types of experience, and we think there’s room and demand for all types of hospitality. By better supporting hotels and B&Bs, we think we will achieve our goal.” Ease of searchability for hotels on Airbnb’s site also isn’t quite there yet — as of May, that functionality was still being developed,? according to Houser.  

Foyer of the Adelphi Hotel in Melbourne
Foyer of the Adelphi Hotel in Melbourne

So does this present a direct challenge to OTAs? Airbnb wouldn’t comment on that, but for at least one property already directly advertising on Airbnb, the answer is: not necessarily. Dion Chandler, managing director for the 34-room Adelphi Hotel in Melbourne, Australia, says it just “makes sense” to add Airbnb to the hotel’s list of OTA options, not necessarily replace one with another. Chandler says the property’s Palatial Suite (which is only listed on Airbnb) has been booked more times via that channel than any other OTA. The suite has been averaging a booking of five nights per month, which comes out to around A$40,000 (US$30,200) annually in revenue for an acquisition cost of around A$1,200 (US$906).  

In terms of fees, whenever accommodation is booked, Chandler says both the customer and the host pay a service fee to Airbnb that is significantly less than those applied by OTAs. “Without these relationships, we wouldn’t be in business in today’s highly competitive marketplace,” Chandler says of the OTAs and Airbnb’s new effort. 

“I look forward to seeing how other hotels will react to the rapid expansion of Airbnb,” he says. 

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