Airbnb launches a new travel service “Trips”; baking on diversification of business verticals

Airbnb, the firm responsible for bringing revolution in the travel business, is on a diversification plan, and seeks businesses which will help the firm scale in future. It has launched “Trips”, a domestic travel services vertical, which will help the traveler book its entire trip including hotel, transportation, food, tours, entertainment etc. The startup for now is present only in accommodation, and it is its first foray in providing integrated travel spectrum to its customers. However, Airbnb’s leadership expects that its “Trips” service vertical has much bigger potential compare to its current business since people spend 2x-3x on total travel spectrum while the accommodation business, where it is currently positioned, only accounts for a small portion of that total travel expenditure.

In one of the interviews, Airbnb’s CEO Brian Chesky explained why the company took a conscious decision to introduce “Trips”. He said, “It is possible that it may become bigger, but I don’t want to say it will definitively become bigger. I think that the current home marketplace business will one day be a minority of our revenue, when you add up all the future things that we do. Ten years from now, you may (associate) homes with Airbnb as you associate books with Amazon. You think of a lot more than books when you think of Amazon. Homes might be a bigger category to travel than books to retail, but it’s a somewhat strategic shift. We are broadening our definition of travel. More than half of our bookings for trips and experiences in San Francisco were by people who live within a 40-mile radius of the city. The big opportunity there is that you take three to four trips a year but you are looking for what to do in your city every weekend”.

However, it will be interesting to see how the firm moves away from the growing criticism to the shared economy. A number of cities have passed legislations barring Airbnb from providing the services since they deem it to be unsafe.