$10 billion reasons to understand the potential of Airbnb.

I recently took two of my sons on a NBA Basketball tour of 5 American cities and was amazed at how easy it was to put together such a complex tour via the internet, using the ticket resell site Stubhub, booking.com for hotels and Airbnb for luxury private accommodation.

Interestingly, I’ve historically never had the confidence to book privately owned accommodation over the Web, but the advent of user reviews and one previous experience of using Airbnb services, has converted me into an avid advocate of this type of accommodation. For literally the same price as a single hotel room, I was able to secure a two bedroom luxury apartment in central Los Angeles and the same again in a prime location near Central Park in New York. These options provided great locations, increased privacy and most importantly space to unwind after several hectic days sightseeing, shopping and of course watching NBA Basketball.

Airbnb is currently valued at $10billion and recently announced its intention to provide a much wider range of travel services to its customers, in order to replicate the services offered by its hotel competitors. However, interestingly it is also getting increasingly tied up in what appear to be “hotel protectionist” legal actions, from people such as the Mayor of New York. Not surprisingly, he does not want to see all the lovely tax income New York gets from its hotels, disappearing into the internet ether of bank accounts of private owners. So clearly Airbnb is a massive threat to the traditional hotel sector.

Currently, I would suggest that few UK Travel Agents would even consider using Airbnb as a source of accommodation, even though most will now be Dynamically Packaging with a wide range of Bed Banks. In some ways they may be right to hesitate, since I doubt Airbnb are willing to offer “product indemnities” or provide even a basic “Health and Safety” audit on their supplied properties. However, this may be another “King Canute” approach by Travel Agents, to the way the internet is changing consumers purchasing patterns in the travel industry and perhaps they should be embracing it as a new product alternative.

In my opinion, it is clear that sites like Airbnb, of which there are already many, offer both superior accommodation and a much more in-depth cultural experience when travelling. Instead of the convenience of the hotel buffet breakfast, concierge or spa, you’re forced to explore the local area in order to find the equivalent services. For example, we ate in the local restaurant’s recommended by the property owners, who use them daily and sourced gym access by going online and signing up for free trial passes, offered by the major fitness chains such as 24 hour Fitness or LA Fitness.

The trip therefore felt much more like an exploration of the USA, rather than the usual “Culture Vulture” tours that I have previously experienced and had the added benefit of sport, more sport and even more sport to keep my two boys happy and bonded with their dad. Personally, I see events based trips visiting multiple cities and using private accommodation as a highly attractive niche, offering high margins and a large degree of differentiation if it is done correctly. It may not be my next venture, but it has certainly made it to the ideas shelf.

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