Hospitality’s Amazon jungle

Airbnb’s latest results featured founder & CEO Brian Chesky commenting that the group had been studying Amazon and liked the look of it.

Chesky is following a long tradition of companies liking the look of Amazon and thinking that they might fancy a bit of that action. Expedia’s former CEO, Mark Okerstrom (the one who could do The Worm) said that he saw the group’s future as being the Amazon of travel. Accor’s Sébestien Bazin looked at the almost-daily touchpoints the average consumer had with Amazon and fancied a bit of that for the Accor loyalty programme. 

There is much to like about Amazon and not just when you take a look at Jeff Bezos selling $6bn of shares and counting over the past week. According to one biography Bezos is an experienced gelder of horses. We’re not saying the two are related, but there’s a TV series in there somewhere. 

But from how Isn’t It Funny That Amazon Can’t Get Into Travel and back to Airbnb. Chesky’s particular interest in Amazon lay in, he told analysts, “the late ’90s, early 2000s when they went from books to everything, or Apple when they launched the App Store”. These “really large technology companies” he said, “are horizontal platforms”.

And Airbnb wants to be one too, going from vertical to horizontal without everyone falling out along the way. But first, it plans to use its new AI purchase to go from being a single vertical company to a cross-vertical company (lots of verticals, not across a vertical, that would be a horizontal, geometry fans). 

It might be easier to imagine tentacles. So Airbnb is planning to use its AI to create, Chesky said, “an app that you feel like knows you. It’s like the ultimate concierge, an interface that is adaptive and evolving and changing in real-time, unlike no interface you’ve ever seen before”. And what it will sell on these tentacles is …more products and services. 

This is not the massive shock it might be. Analysts and sector observers have been tearing their hair out for years since the group packaged Nights and Experiences Booked into one measurement (there was a spasm of excitement on the call when Chesky said that Nights Booked had accelerated throughout the remainder of the quarter, but that soon passed). 

Launching new products and services is what Airbnb does. Right back in the IPO prospectus, the group said it was going to design ‘new products and offerings…new opportunities for connection…to expand possibilities for our hosts and offer new experiences for our guests”. See? It’s a thing. It also mentioned bitcoin and cryptocurrencies, but so did your florist in 2020, so let’s not get all hopped up on that now. 

What bitcoin did illustrate was that Airbnb likes a look at new tech (and it wasn’t the only one – remember when hotels were looking at blockchain and its potential for distribution?), which makes perfect sense for a company which is, in fact, a technology company. 

Does it want to become Amazon? $6bn in one week can’t be wrong. Yes, the customer service ceases to matter when you become a volume business, but let’s hope all that can be managed with AI.

In the short term, AI can indeed be used to get into all the areas where Airbnb needs so it can keep growing in the manner to which it has become accustomed: places it isn’t now. And it can do this by suggesting new locations to travellers and by making processes easier for hosts. So far, so AI.

Where it becomes more gripping and where the tentacles start to take on more forms is if it really wants to go the full Amazon and get its revenue from retail but its profits from technology. The hotel sector is crying out for someone to help it with distribution. Back in 2019 when Airbnb bought HotelTonight, we thought we were heading in that direction. 

Hotels are not AI dolts. They are currently in the process of joining the dots between their loyalty programmes and personalisation, rather like the two-headed spelling monster from Sesame Street. But it’s a slow process. 

If someone could create the ultimate personalisation product, which also directs you to the path/hotel less travelled, books your lunch and offers you a discount on parapente, there might be something in that beyond a room in someone’s attic and the chance to enjoy the Airbnb design triumvirate of plant/chipboard shelf/Portuguese tile coaster. 

Does Airbnb need the hotel sector to become the Amazon of travel? It does. And not just because jurisdictions around the world are giving it the gimlet eye. 

Scroll to Top