Airbnb has gained reputation as the world’s largest online community marketplace that connects people looking to rent their homes with people who are looking for accommodations. It has taken away profits from hotels all over the world, and is valued nowadays at $31 billion (Thomas, 2017), which is more than the market value of Hilton ($23.33 billion) and Hayat chains combined ($6.87 billion) (Skift, 2016).
Nevertheless, the war between Airbnb and traditional hotel chains is not yet over. In 2008 Airbnb entered the fight by targeting leisure consumers who required cheaper prices and larger variety of accommodations than traditional hotels could offer. Nowadays, the growth area with a largest potential for Airbnb is the business market. Even though business guests have for long remained loyal to traditional hotels, their approach to travel is changing. They demand the opportunity to immerse themselves in the area they are travelling to fully. In order to win business travelers’ attention, Airbnb launched a “Business Travel Ready” feature in 2015, which helps users select accommodation that matches specific search requirements, such as comfortable desk and Wi-Fi.
This year it is time for Airbnb to make the next move in a fight for business consumers. Airbnb has recently announced a trial partnership with WeWork (Mogg, 2017). WeWork is the world’s largest provider of shared work spaces, renting desks to freelance workers, startups and larger companies that don’t want to sign an office lease (Zaleski, 2017). It offers everything you need: a super-fast internet, business-class printers, micro-roasted coffee, office suppliers, daily cleaning, fresh fruit water, comfortable common areas. While booking a room on Airbnb’s site during the trial period, business travelers will be able to reserve a Spot at WeWork location closest to the place where they are staying. This partnership is expected to strengthen both platform businesses. Airbnb hopes to attract some business travelers who need to focus away from their unmade bed, and WeWork expects to enlarge its customer base by getting closer to young entrepreneurs.
Even though the platforms have not signed any permanent deals yet, the efforts of Airbnb show that the platform wants to extend its services beyond just accommodation. Would you book a spot in a modern and stylish WeWork location via Airbnb? Do you think the partnership will succeed?
References:
Mogg, T., (2017). Business Travelers, Airbnb Is About To Make It Easier To Find A Workspace. Available from: < https://www.digitaltrends.com/web/airbnb-wework-business-travelers/> Accessed [07-10-2017].
Skift, D., (2016). Airbnb’s Latest Investment Values It as Much as Hilton and Hyatt Combined. Available from: Accessed [07-10-2017].
Thomas, L., (2017). Airbnb just closed a $1 billion round and became profitable in 2016. Available from: Accessed [07-10-2017].
Zaleski, O., (2017). Airbnb Teams Up With WeWork to Lure Business Travelers. Available from: Accessed [07-10-2017].
I think both WeWork and Airbnb have very neat business models and an extremely convincing cash flow strategy. However, I am not 100% certain about their partnership – business trips are usually organized to meet clients and not to perform office work from a different location. Accordingly, Airbnb’s business customers should not really be in need of office space but rather work from their client’s location.
I used Airbnb for personal travel a lot and had a wonderful experience. However, I don’t think Airbnb will also become popular for business travel for several reasons. First, unlike casual personal travel for tourism, business people may have a higher requirement for the house to be standard equipped with fast-speed internet, quiet environment, good service or even smocking areas. Which is the exact strength of traditional chain hotels. Second, a lot of companies have a long partnership with the traditional hotels. It’s hard to break the interest chain. Third, hotels play important roles in the social life of business people, where they can hold meetings, organize activities to meet with their partners. But these activities may not be suitable to be held in a local house.