Airbnb Inc. will let guests arrange luggage storage, airport pickups and car and equipment rentals, its latest effort to expand beyond short-term rentals.
During its annual product event on Wednesday, the company announced a partnership with luggage storage platform Bounce, which works with retail stores, hotels and locker rentals in 175 cities to let people stow their bags before check-in or after checkout for a small fee. Airbnb is also expanding private car pickups in major markets outside the US with airport transfer firm Welcome Pickups.
The tie-up with Bounce follows a deal last year with Instacart to add grocery-stocking to the Airbnb app. The home-share company said Wednesday that it is expanding that service to more than 25 cities in the US. It is in talks with other companies globally to offer a similar offering overseas, Chief Executive Officer Brian Chesky said in an interview ahead of the announcement.
Airbnb wants to “become an ecosystem of services” to address the top pain points in travel, Chesky said. “It’s almost like an app store where we work with other developers, other companies,” giving them access to Airbnb’s global customer base. With the exception of grocery delivery, which is a low-margin business, Airbnb takes a 10 per cent to 15 per cent commission from the third-party providers, he added. More offerings will be added this year, including car rentals with an undisclosed partner this summer, according to the company. Chesky said Airbnb is testing half a dozen more services, including equipment rentals for items such as skis.
Working with third-party companies that have an established business, instead of solely with individual providers like private chefs or photographers, will accelerate Airbnb’s nascent “Services” business to stimulate annual revenue growth beyond 10 per cent. Chesky has said that this segment, combined with “experiences” for booking travel activities, will help add $1 billion or more in revenue a year. But he has also cautioned that it may take years before the new product lines become a material part of Airbnb’s business.
The company also said it will offer more boutique hotels on its platform — part of an ongoing effort to increase its presence in cities where lawmakers have clamped down on short-term rentals. Guests can now find hotels in 20 global destinations, including New York, Paris, London, Madrid, Rome and Singapore, with more to come throughout the year.
Changing deeply ingrained customer habits — to get users to come to Airbnb to book something other than stays — will be a hurdle for the company’s ambitions. “Airbnb is a noun and a verb that means a place to stay for when you’re traveling. So it’s a blessing and a curse in the sense that it’s like Kleenex trying to offer something that’s not Kleenex,” Chesky said.
But he is confident that the company can overcome that by offering customer perks, easy-to-use integrations and cross-promoting its offerings.
At launch, Airbnb is offering discounts to customers to use its partner services. Users get 15 per cent off a Bounce storage booking if they book within the Airbnb app for an unlimited time. Discounts for grocery stocking — free delivery and $10 off an order of $50 or more — and 20 per cent off airport pickup last through June.
Chesky said the company will also fine-tune in-app recommendations for services so they complement guests’ lodging or travel destination. For example, Airbnb would show users the grocery offering if they booked a big house in Los Angeles, or the app might recommend airport pickup for customers traveling to Rome “since we know it’s really hard to get to your Airbnb,” he said.
The company is also testing bundled offers of stays and add-ons. “Eventually you could go to Tahoe, we could get you a car, ski rental gear and groceries,” Chesky added.
“Over the course of a year or two, I think word will get out and people will come back and say, “Oh, look, there’s a lot more services,” he said.
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