Airbnb Has Up-Market Hotels In Its Sights

‘Disruptive technology’ is one of those phrases journalists love to use in their articles. Usually they don’t mean disruptive at all, just mildly better; like a quicker toaster. But we do think the phrase can be applied to Airbnb, which recently announced that it intends to launch a premier service that will compete more directly with hotels.  It’s aim to capture high end customers who haven’t yet tried its service.

Airbnb has come a long way in a short period of time and for most start-ups, deliberately moving away from your core target audiences (in its case, sofa surfing millennials) would be the kiss of death. But you feel with Airbnb, the company may just pull it off and cause yet more grief to the hotel industry along the way. (As well as justify its valuation of $31 billion!)

The company believes that it can attract older, richer clients who might have been put off by the perception that its service is less polished than that offered by quality hotels. But money talks and as the price of hotel rooms continues to climb (London’s average room rate is £136 per night and this includes some pretty dodgy dwellings) so Airbnb can start to nibble at this new socioeconomic group too.

Trials for the new service are expected to start in the US shortly. As part of the service, inspectors will call on the hosts to check that their services are as advertised.

The company is not moving away from its core market just yet though. It also recently announced a new ‘split payment’ feature, which would allow multiple guests to split the fee and share the cost of a room – something that apparently has been long in demand. We were intrigued to see from the press release that this can accommodate up to sixteen friends!

We at Explorer Insurance know that we’re getting old, not just because we couldn’t conceive of sharing a room with fifteen other people, but because we can’t think of fifteen friends to go on holiday with.

 

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