Just this week, Airbnb purchased a Canadian competitor, Luxury Retreats, in Airbnb's attempt to expand their rental services company. This push is an attempt to widen their approach on an international scale, so that they can give the public an alternative to staying in hotels. It’s been reported that the deal costed at least $200 million, which speaks to the size of Airbnb. In fact, Airbnb was “valued by investors at $30 billion, indicated it wants to become something closer to a full service travel site.” (Bensinger) Airbnb has high expectations, and the private company is going to push as far as they go, meaning that services other than sleeping will soon be fabricated.
This purchase addresses how limitless Airbnb’s opportunities can rise. I think that Airbnb is going to be one of the most successful traveling sites the next generation will offer. This purchase was a phenomenal idea for the company, because people are going to start purchasing Airbnb’s over hotels. Most hotels offer the same accommodations. One room at most hotels consist of a room with a bathroom and a television. Obviously, some hotels have other accessories that help them stand out, but the general idea of a hotel is pretty straight forward. With Airbnb, they now offer beachfront properties in places like Barbados, as well as spacious apartments in Beverly Hills.
People live for experiences. Airbnb offers experiences. If a potential customer decides between an Airbnb and a hotel, they’re going to choose the experience. Each city holds unique places for rental, and an Airbnb can help someone feel like they’re at home versus being on a trip in a hotel room. Airbnb also has investments in restaurant sites, which means that they’re diverging out into many sectors. Airbnb has also been trendy for college students all around the United States. Airbnb becomes extremely popular during the summer and on spring break. Instead of having students, who have little money, purchase low-end hotel rooms, they can pull their money together as group to purchase an Airbnb for the week.
One of the only possible downfalls with Airbnb is that they can be terribly expensive. According to the article, after this purchase of Luxury Retreats, Airbnb now has “access to luxurious listings like a nightly $27,000 Vienna Villa.” (Bensinger) This seems incredibly expensive for anyone who is traveling. Many people also believe in brand recognition, and this will be hard for Airbnb to develop. Names like the Four Seasons, Ritz-Carlton, Hyatt, Marriot, and other names are so well known that customers trust their customer-service and consistency. Due to Airbnb’s diverse number of places that they offer, they will struggle to develop the customer-relationship that customers need in order to feel comfortable choosing Airbnb every time. At the same time, as I said before, there are Airbnb’s that are cheap and this means that loyalty may stagger. Overall, Airbnb can reach out to multiple crowds in many ways, which makes me optimistic for their chances in the future.