According to the travel industry research firm, Phocuswright, the San Francisco based home sharing platform, Airbnb will become the fourth largest online travel company in the world by the end of this year. They will trail only after Expedia, Priceline and China Ctrip in terms of annual gross booking value. This has been estimated at US$7.5 billion just for Airbnb in 2015 alone. Perhaps most striking is that one in three US travellers stayed in an Airbnb home last year, which they state is ‘more than triple the number of just four years ago’.
Vice President of research at Phocuswright, Douglas Quinby added ‘Airbnb has played a pretty big role in making alternative accommodations mainstream’ and ‘travellers are now looking for the right place to stay in the best location that’s fits the bill, which might not necessarily be a home, hotel or hostel’. The first quotation could prove the understatement of the century.
The financial information giant, Bloomberg recently reported that Airbnb has secured another US$1 billion debt facility, more in some cases than the annual GDP of some of our island neighbours. One of the reasons shared with the public was to expand services beyond its core business of accommodation to include features such as restaurant reviews, general trip planning, activities and tours.
Also on the cards are so called ‘Magical Trips’ to offer users restaurant services, art tours, meals made by personal chefs, bicycle rental, city guide books and even down to local listings highlighting happy hour deals.
After the latest cash injection the New York Times has valued the current market value of Airbnb at US$30 billion. As well as dramatic growth in the United States, they have reported a 700 per cent increase in business from Chinese travellers.
It really appears to be an unstoppable juggernaut train and I wonder if there are any major detrimental implications to our more traditionally geared tourism industry. Realistically this just might only be based on naive speculation and that it has not already played a key role in changing the sector, perhaps forever.
So the question I would imagine our tourism policymakers are asking, is not how ‘we’ respond, but how do we play catch-up?
Clearly our targeted visitors have become far more sophisticated in the way they research, plan and book online and in our particular destination case, you only have to go onto the TripAdvisor Barbados Forum, to glean that simple fact. Our visitors share and exchange information and experiences now in a way that could not have been imagined twenty years ago.
The destinations who master the art of disseminating this knowledge will obviously have an advantage over others and could grow market share more effectively.Just think of the latent potential. You are on the aircraft enroute to Barbados with a carrier who provides free onboard wireless connectivity.You can study restaurant menus, car rental rates, island tours and activities and book online painlessly.
In many cases eliminating intermediaries therefore giving the actual supplier higher net revenue. The possibilities are endless.