Airbnb And The Hotel Industry

Airbnb Readies a Premium Tier to Compete More With Hotels - Bloomberg

Excerpt from Bloomberg

Airbnb Inc. is close to launching a new service that will match guests with quality-inspected home and apartment rentals. The product is intended to attract higher-paying travelers who have yet to use Airbnb because they prefer the amenities guaranteed by fancy hotels, said three people familiar with the project.

The service, expected to launch as a pilot with a select group of hosts as soon as this week, will send Airbnb inspectors into hosts' homes to ensure they meet a checklist of quality standards designated by the company, said two of the people. If the homes pass the inspection they will be eligible for a featured section of Airbnb's website and mobile apps, they added.

The company has been encouraging hosts to behave more like hoteliers, but this is the first time premium rooms will be packaged into a distinct product with official inspections and incentives for participants. The service is internally referred to as "Select," but the people said an official name has not yet been determined. They asked not to be identified discussing an unannounced product. The full service could launch by the end of 2017. Airbnb declined to comment.

Offering a premium selection of rentals may help Airbnb lure older and wealthier travelers, who've been hesitant to book on the home-sharing platform because they believe it's less polished than a luxury hotel room, said the people. These users present a potentially new lucrative revenue source for the nine year-old startup, which began as a couch-surfing website for cost-cutting millennials. Airbnb takes a percentage of the cost of each booking, so more-expensive inventory may support revenue growth and help justify the privately held company's $31 billion valuation.

The new program may also concern hotel chain operators, such as Hilton Worldwide Holdings Inc. and Marriott International Inc. They have lost some lower-end customers to Airbnb and other home-sharing services, while most luxury and business guests have so far kept booking. 

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