Tomorrow morning Airbnb will go public on the NASDAQ exchange and it is a critical moment for the future of travel.
In a year where hundreds of millions globally are out of work across the tourism industry, you’d have to be crazy to invest in a double-sided marketplace that has more risks than nearly any other corporation in existence. Airbnb will face countless calls to reform how they operate in major cities, to better protect hosts and guests, and to advocate for a more sustainable form of travel.
These challenges are all very real and very serious. The most egregious of which is the proven fact that Airbnb hosts are keeping inventory from the rental market and raising the cost of housing. This is also supported by clear evidence of tax avoidance and manipulation of civic regulations by some hosts. Airbnb must address these or forever be seen as “what’s wrong with Silicon Valley.”
I believe that they will resolve these and that tomorrow’s public offering will be critical to setting true public accountability into motion. Airbnb may look much different in two years as a result of this. It may need to create a division which operates more like the hoteliers that they have tried to be the alternative to. It may also require them to implement an open data system that makes governance possible at scale.
All those risks aside I am long on Airbnb because the way we traveled in the 20th Century is over. In that era consumers traveled seeking postcard moments from the distance of rooms and tours that felt familiar and comfortable. That era fuelled an explosion of destination development which decimated pristine beaches and forests only to be replaced by cookie-cutter hotels and resorts which stood for sameness and safety. Those exclusionary practices resulted in added strain within the local economies by residents who felt excluded and disregarded, both economically and culturally. Colonialism is a powerful force after all.
The new era of travel challenges us to experience the places we visit rather than observe them from our windows, tour buses, and westernized dinner shows. It invites us to feel uncomfortable, yet excited to try new things that we don’t fully understand. This new era empowers individuals and small local operators to showcase their pride for their culture by enabling them to offer tours and experiences directly to travellers. Most of all it gives us the confidence to appreciate what makes us all different. And after the kind of 2020 we have all had, loving what makes us different is part of a much-needed healing process to bridge divides.
At the centre of this evolution is Airbnb. An accidental success story born out of couchsurfing’s success and an aging generation of backpackers who weren’t ready for the isolation of the hotel experience. Airbnb started humbly by making it possible to rent out your bed, air mattress, or sofa and has matured into the go-to platform for citizens of the world to showcase their pride for people and place. Airbnb was made possible thanks to a customer experience that was uniquely enabled by the rise of mobile phone usage. The timely innovation of maps, translation tools, cheap mobile data, and endless blogs encouraged us all to step a little bit further into the unknown. Those same innovations also made it possible for you to host people from any part of the world regardless if you spoke the same language or wanted to check them in remotely.
As the founder of Canada’s leading customer experience consultancy I have been in awe of how much Airbnb has changed CX forever. The technologies they launched and the services they designed have become the foundation for dozens of other two-sided marketplaces that now are unicorns. They changed people’s comfort level with strangers and made us believe that humans are generally good. Uber never would have existed without this, nor many of the education technology startups trying to change learning today. Interestingly Airbnb’s great strategic failure has been its lack of a customer loyalty strategy. Up until the COVID crisis Airbnb stood defiantly behind its most valuable assets: their hosts. Their guests had been secondary and that’s why I broke up with Airbnb for several years.
My ride with Airbnb started in 2010. Vancouver was hosting the Winter Olympics and I imagined renting my apartment. The platform seemed unconvincing and the concept insane so I passed. In 2012 I finally become a host and took pride in sharing the story of my city and my lived experiences with more than 20 guests from around the world. It was exciting renting my home for weekends during the Summer and leaving to go camping or to crash with friends. Starting in 2013 I started booking Airbnb’s around the world; the first being an off-the-grid room in a home on the island of Palawan in the Philippines. Since then I’ve stayed at more than 50 Airbnbs around the world, usually rooms in people’s places who seemed interesting and fun.
The most fun were in Bilbao, Spain and Ilha Grande, Brazil. The most unique was a Mongolian yurt atop a mountain and a bizarre home on a cliffside in the middle of nowhere Indonesia. For the lead-up to our wedding we rented a 17th Century home in Cartagena, Colombia and then had our wedding at a mountaintop villa in Medellin that would have fit into the Narcos show. These were all fantastic memories driven by the desire for difference and feeling included. Those trips led to many friendships, capoeira lessons, and explorations of food and culture that changed me.
Where Airbnb lost me was when I started feeling like a stranger in other people’s homes. That’s how it felt going to an Airbnb in downtown Toronto where the apartment was characterless, the host nonexistent, and the memory completely forgettable. As Airbnb grew, more services popped up to support hosts and more mercilessly built empires of Airbnb investment properties. Staying at an Airbnb in a major centre became less satisfying than staying at a hotel because most Airbnbs were disappointing. Thankfully COVID changed everything, including this parasitic relationship of condo flippers and guests who couldn’t tell it would be a shell of an experience. As a corporation they also failed to reach out to us early adopters in a way that made me feel like things were going to get better.
2020 reset tourism and in our pursuit of safety we sought out unique, distinct, remote homes. We explored the communities near us with the desire to experience what makes them special. Hosts who took pride in their communities stood out as we sought to feel included. Airbnb also facilitated our desire to travel far but stay at home by pivoting their Airbnb Experiences product into one showcasing online experiences from around the world. Learn how to cook Peru’s unique blend of South American and Japanese cuisine or take a silly travel quiz with a travel writer who had countless stories to share.
In 2021 Airbnb will lead this new era of tourism. They won’t be alone as other platforms will promote more niche lodgings and experiences. They will also struggle to compete with hotels on price as those large properties will aggressively try to recapture market and increase their RevPAR. Throughout I believe their future and that of the industry as a whole will rely on advocating for a more sustainable form of travel that champions stories over scale. By May of 2021 you will see an orgy of accommodation bookings on Airbnb like you have never seen as people clamour to find the perfect accommodation for them, wherever they may feel safe.
It’s a future I feel so strongly about that I’m the co-founder of what may seem like the stupidest idea ever: the promote travel during the worst time to travel in history:
- OpenTravel.co (launching Feb 2021) is our passion project to inspire you to support the tourism businesses that make Canada so unique.
- We want you to be proud of your country, the places you love, and the places you have yet to fall in love with. We want your help speeding up the recovery of the thousands of tourism businesses impacted by this crisis.
- We’re doing it so you can find fun communities and unique accommodations within driving distance of you.
I hope that Airbnb will be one of many leaders that will rise to champion a more sustainable form of travel. If you’d like to chat about this future of travel connect with me on LinkedIn or @arpyd on Twitter.