In a bold statement, the CEO of Airbnb recently outlined his vision for the app to become the Amazon of travel. A hefty ambition indeed, but a realistic goal within the app’s grasp given its financial success of late.
Recent performance confirms the company is going from strength to strength. Last year it posted record earnings of $11.1 billion, representing a 12% increase from the previous year.
Amazon has disrupted many industries. Initially, in the online book space back in 1995, it sold the world’s largest selection of books before diversifying into the e-commerce giant across multiple shopping categories we see today.
Amazon and Airbnb embarked upon similar journeys to profitability with both apps taking several years to break even from their first day of trading. Amazon sent ripples through the traditional retail sector with its vast product selection and competitive pricing, with almost 90% of people in the UK shopping on the platform today.
So what does a future Airbnb, with Amazon status, look like exactly?
Stealing from the Amazon playbook
Airbnb is moving beyond home rentals, aiming to expand into adjacent travel services and, eventually, non-travel verticals. The goal? Make Airbnb a daily-use platform, not a once-a-year app.
This is a smart expansion model – borrowing Amazon’s strategy of leveraging an existing user base to introduce new services makes sense. Facebook made the successful leap from social network to a thriving second-hand marketplace, with 27% of UK shoppers now using the platform to buy pre-owned items.
But there are perils taking on the ‘everything app’ format and Airbnb risks overextending itself. Moving beyond travel may dilute brand identity and create operational complexity.
Digital disruptor – are there expectations with tech innovation?
When Airbnb first entered the travel market its app turned the market upside down, empowering people with spare rooms to become enterprising letting agents. Today, there are a staggering 5+ million Airbnb hosts worldwide. There is therefore an expectation that Airbnb must keep up the pace of disruption in this market – particularly when it comes to technology innovation.
AI continues to be a hot topic in the travel space, with Airbnb’s competitors – such as Booking.com – launching an AI trip planner designed to enhance the planning experience, and making full use of ChatGPT to create a new conversational experience for people to start their trip planning process.
Airbnb CEO Brian Chesky previously stated that he sees AI as a long-term game but is starting with customer service and back-end efficiencies. This includes his “Ultimate AI Concierge” vision – building an AI-powered, hyper-personalised travel assistant. But details remain vague. The focus is on an innovative interface rather than AI infrastructure.
Airbnb is thriving financially without AI-driven innovation. And you could argue that it is a sensible and pragmatic approach to avoid the generative AI hype cycle while competitors may risk overpromising and underdelivering.
But this AI hesitation could also be a missed opportunity for the travel disruptor. Competitors like Expedia and Google are already embedding AI into travel search. By delaying AI-driven personalisation, Airbnb could lose ground. And if it truly wants to be the Amazon of travel – it needs to lean into Amazon’s way of thinking – maintaining its reputation as the disruptive innovator in the market.
Looking over the horizon
Airbnb was and surely wants to remain a disruptor. It is why it is looking to Amazon for inspiration for its ambitions. But in order to succeed it is going to need to have a firm strategy in place.
Investment in tech is important – and Airbnb must be smart with how it applies it to drive efficiencies. Constantly reviewing how it can improve and better serve customers – and being customer-centric in its strategy – is crucial. And it should always be mindful of what made it a success in the first place throughout its transformation.
Airbnb may well have the potential to become the ‘Amazon of travel’ but it needs to be smart with its strategy and ensure it keeps the customer top-of-mind. A clear vision is the best guest experience – and there’s no time to take an unplanned or misdirected detour.