Airbnb says it will inject $5 million into Experiences, the company’s take on tours and activities, expanding the offering to 200 locations in the U.S. The plan is to bring Experiences to smaller markets around the country.
Since launching the new product in the fall of 2016, Airbnb has cultivated 4,000 Experiences in 50 locations globally, 1,000 of which are in the U.S.
This small but dedicated funding for the initiative shows that Airbnb believes this component of its offering may be a gateway to achieving its ultimate goal: to be an “end-to-end” travel company.
Experiences is a key initiative for Airbnb CEO Brian Chesky, who is incredibly focused on evolving his company from a marketplace for renting other people’s homes into a multidimensional travel company. Experiences offers an array of options for travelers, from microbrew beer-tasting seminars to bespoke bike tours of off-the-grid neighborhoods.
Experiences also has the benefit of having higher profit margins for the company than Homes.
“In the U.S., the average earnings for someone who hosts experiences 9 times per month is $6,200 annually while the average income for someone who is able to host more frequently, 15 times or so a month, is an upwards of $24,000 annually,” the company noted in a blog post today. On average, Experiences hosts charge anywhere from $25-$150 per person for a single activity. Airbnb takes a 20% cut of that–but gets only a 3-5% cut of earnings from home rentals. That said, Homes are of course a much bigger business for the company.
One question to consider as Airbnb charts a path toward becoming a public company is how it might build out other travel features for its users. On the one hand, it could be a hub for other travel utilities that already exist. Airbnb has done this already through its partnership and investment in reservation booking app Resy. But a greater opportunity, or so the company seems to think, is creating new ways for community members to share resources, or for small, independent operators to delight intimate gatherings of travelers. It will be especially interesting to see how that might unfold at Airbnb for flights, cars, or other aspects of travel.
A Morgan Stanley survey from last year suggested that adoption of Airbnb was tapering off in the U.S. Adding more travel Experiences to its app might inspire more occasional users to travel more often and turn them into Airbnb superusers, thereby driving more revenue for the company.
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