IN­SIDE AIRBNB’S AM­BI­TIOUS EX­PAN­SION

The travel ac­com­mo­da­tion dis­rup­tor has an­nounced new fea­tures to its of­fer­ings, of which the sell­ing of ex­pe­ri­ences could be dis­rup­tive, both pos­i­tive and neg­a­tive, on a whole new level.

Finweek English Edition - - FRONT PAGE - By Sean Christie

on 17 Novem­ber, Airbnb CEO Brian Ch­esky an­nounced the launch of a fairly rad­i­cal new of­fer­ing called Airbnb Trips, com­pris­ing three fea­tures. The first – Homes – is es­sen­tially what Airbnb has been doing since it launched in 2008: the pro­vi­sion of a mar­ket­place that en­ables trav­ellers to rent rooms or en­tire homes from prop­erty own­ers look­ing to earn some ex­tra cash.

The sec­ond fea­ture – Places – seeks to cre­ate user-gen­er­ated in­for­ma­tion guides for Airbnb­ser­viced cities, towns or re­gions.

Eas­ily the most in­ter­est­ing new fea­ture from an eco­nomic point of view is Ex­pe­ri­ences, which en­vis­ages cer­tain Airbnb “hosts” sell­ing guided tours and other cu­rated ex­pe­ri­ences on the Airbnb plat­form, in ad­di­tion to rent­ing their rooms and homes. In the words of a re­cent Airbnb press re­lease, “[Airbnb] Ex­pe­ri­ences of­fer(s) un­prece­dented ac­cess and deep in­sights into com­mu­ni­ties and places that you wouldn’t oth­er­wise come across, such as truf­fle hunting in Tus­cany or the grime mu­sic scene in Lon­don.”

It did not take long for the rip­ples of ex­cite­ment to reach South African shores. Cape Town, Ch­esky an­nounced, was one of 12 cities cho­sen for the launch of Airbnb Trips. Cue a big splash of lo­cal ar­ti­cles, quot­ing from pre-re­leased Airbnb press ma­te­rial. Cape Town’s mayor Pa­tri­cia de Lille even did her bit to pub­li­cise the ini­tia­tive, by agree­ing to sam­ple, on video, a lo­cally listed Airbnb com­mu­nity art tour, hosted by Airbnb “Ex­pe­ri­ence Host” Dele­cia Forbes (who hap­pens to be the wife of De Lille’s DA col­league Wil­mot James).

In a slickly pro­duced video De Lille was per­fectly on script, com­mend­ing Airbnb Ex­pe­ri­ences for “de­liv­er­ing peo­ple out of the city cen­ter into the other side of Cape Town where his­tory was re­ally fought and made… to me, that’s the beauty of this ini­tia­tive”. Go­ing on the avail­able press one would be for­given for as­sum­ing that Airbnb is both very orig­i­nal and very sig­nif­i­cant, but it isn’t nec­es­sar­ily ei­ther of these things. For starters, the con­cept is not new. Back­packer lodges all over the world have long func­tioned as mar­kets in which lo­cal com­mu­nity mem­bers ad­ver­tise and sell unique lo­cal ex­pe­ri­ences. A good South African ex­am­ple is Bu­lun­gula Lodge on the Wild Coast, where you can choose from a range of guided ex­pe­ri­ences, in­clud­ing spend­ing time with a lo­cal herbal­ist, har­vest­ing plants in a nearby for­est. But of course the plat­form in these cases tends to be the lodge foyer and a no­tice board made of old wine corks, not a so­phis­ti­cated tech­no­log­i­cal ap­pli­ca­tion. Also, Airbnb is not the first tech com­pany to at­tempt to cre­ate an on­line exchange for lo­cal travel ex­pe­ri­ences. In Sil­i­con Val­ley pa­tois, what Airbnb is at­tempt­ing to do is called peer-to-peer (P2P) tourism. The P2P economy is de­fined as an al­ter­na­tive eco­nomic model that en­ables two in­di­vid­u­als to buy or sell goods and ser­vices di­rectly with each other, with­out in­ter­me­di­a­tion by a third party, or with­out the use of a com­pany or busi­ness. Airbnb has, for ex­am­ple, amassed a $30bn val­u­a­tion since 2008 by en­abling renters of pri­vately owned ac­com­mo­da­tion to con­nect and tran­sact with in­di­vid­ual trav­ellers on­line. In re­cent years a num­ber of tech start-ups have tried to em­u­late Airbnb’s suc­cess by draw­ing other slices of the tourism cake into the P2P economy, par­tic­u­larly the tours and ex­pe­ri­ences in­dus­try. Most have fallen flat, for the sim­ple rea­son that while ac­com­mo­da­tion is es­sen­tial, guided ex­pe­ri­ences are not. There have been some suc­cess sto­ries, how­ever.

ToursByLo­cals was founded in Van­cou­ver in 2008 with the in­ten­tion of pro­vid­ing “a re­li­able way to bring lo­cal peo­ple with their knowl­edge and ex­per­tise to­gether with trav­ellers who are look­ing for an au­then­tic cul­tural ex­pe­ri­ence”. To­day, the eight-year-old site has 1 767 guides work­ing in 148 coun­tries around the world.

But even these suc­cess­ful P2P tourism ini­tia­tives have not come close to “dis­rupt­ing” the for­mal tours and ex­pe­ri­ences in­dus­try in the way that Airbnb has dis­rupted the ho­tel and lodg­ing in­dus­try. Of­fi­cially launched in South Africa in mid-2015, for ex­am­ple, Airbnb had listed 9 000 lo­cal hosts in its first year (the num­ber is over 15 000 now in Cape Town alone), and logged 134 000 lo­cal users and 99 000 in­ter­na­tional cus­tomers. As the com­pany’s share of the travel ac­com­mo­da­tion mar­ket con­tin­ues to grow ex­po­nen­tially, some com­men­ta­tors have sug­gested that Airbnb’s sheer size will en­able it to do what oth­ers haven’t man­aged, and suc­cess­fully dis­rupt the rest of the travel in­dus­try.

This has caused some jit­ters amongst tour op­er­a­tors and other tourism ser­vice providers, but lo­cal tech ex­pert and eco­nomic fu­tur­ist Arthur Gold­stuck feels there is no need to panic.

“The Airbnb Trips of­fer­ing will not be trans­for­ma­tive for SA tourism, but will add a new di­men­sion as it al­lows or­di­nary peo­ple to be­come hyper-lo­cal guides to their cities or towns. There are many for­mal tour guides with in­ten­sive lo­cal knowl­edge, but most tend to have a more gen­eral ex­per­tise,” he said.

For­mer Cape Town Tourism man­ager Sh­eryl Ozin­sky con­curs.

“It’s a gap in the mar­ket and well done to Airbnb and their lo­cal en­trepreneurs for try­ing to fill it. It’s not rocket sci­ence that the best way to get to know a place is through its peo­ple. Visitors love the fact that they’re mak­ing a friend in a desti­na­tion that they’re vis­it­ing – they’re mak­ing a lo­cal connection, and that re­ally res­onates,” she said.

In her “re­cruiters brief” to prospec­tive Capeto­nian “Ex­pe­ri­ence Hosts”, Airbnb mar­ket­ing con­sul­tant Velma Cor­co­ran re­peat­edly em­pha­sised that, “your Ex­pe­ri­ence can’t just be a reg­u­lar tour – it needs to be some­thing guests can par­tic­i­pate in or that gives them in­sight they can’t get from a reg­u­lar ex­pe­ri­ence… ex­pe­ri­ences they wouldn’t just be able to get through Google or tra­di­tional chan­nels”.

Ideas sub­mit­ted by would-be “Ex­pe­ri­ence Hosts” were rig­or­ously vet­ted, and some of those that passed muster are cer­tainly orig­i­nal. These in­clude the Ocean Ad­vo­cate ex­pe­ri­ence, a three-day ex­pe­ri­ence that plunges trav­ellers into the world of lo­cal ocean con­ser­va­tion, and also an in­trigu­ing one-day en­ter­tain­ment im­mer­sion ex­pe­ri­ence called Madam Mys­tery, hosted by for­mer Cape Town Tourism em­ployee Ni­cole Biondi.

“The vet­ting process was ex­tremely rig­or­ous,” says Biondi, who has worked in tourism for 17 years.

“Not only does one have to meet some se­ri­ous doc­u­men­tary requirements, but I had to give a num­ber of test ex­pe­ri­ences be­fore be­ing ac­cepted as an Ex­pe­ri­ence Host,” she said, adding that the ef­fort had been worth it.

“I think it’s an im­por­tant ini­tia­tive be­cause it takes the tourist rand where it hasn’t been be­fore. I also believe it holds the po­ten­tial to be­come the pri­mary in­come source of those Airbnb hosts who un­der­stand the con­cept and can meet the requirements. Airbnb doesn’t re­strict in­di­vid­ual hosts to one trip,” she said.

What Airbnb does do is man­age the pric­ing of lo­cal Ex­pe­ri­ences, which cur­rently sell for be­tween R700 and R4 000. “Af­ford­abil­ity is a big thing for Airbnb,” said Biondi. There is some con­cern, par­tic­u­larly from or­gan­i­sa­tions rep­re­sent­ing tourism guides such as the Cape Tourist Guides As­so­ci­a­tion (CTGA), that not all the cur­rently listed Ex­pe­ri­ence Hosts ap­pear to be cer­ti­fied as tourism guides and reg­is­tered with the de­part­ment of tourism, as re­quired by the Tourism Act. This has raised ques­tions around qual­ity con­trol, and the po­ten­tial ero­sion of stan­dards in the Cape travel sec­tor. Ques­tioned about this, spokesper­son Lena Sön­nich­sen replied, some­what enig­mat­i­cally, that “Ex­pe­ri­ences are dif­fer­ent from your stan­dard tours and tourist ac­tiv­i­ties, be­cause most Ex­pe­ri­ence Hosts are in­di­vid­u­als shar­ing their lives, pas­sions and in­ter­ests with small groups of visitors or lo­cals. Dif­fer­ent rules ap­ply to dif­fer­ent Ex­pe­ri­ences on of­fer and we make Hosts aware of ap­pro­pri­ate rules and ask them to con­firm they will com­ply with them.”

Gold­stuck laid it out in clearer terms, warn­ing that “P2P travel faces the same dilem­mas as Uber, which taxis its way through reg­u­la­tory loop­holes and by­passes for­mal cer­ti­fi­ca­tion”, but added that the bad would be coun­tered by a lot of good, as the Ex­pe­ri­ence Hosts, what­ever their train­ing, would be meet­ing an un­met need.

On be­half of CTGA, Alushca Ritchie said that Airbnb had proven re­cep­tive to her in­dus­try’s con­cerns, and had com­mit­ted to en­sur­ing reg­u­la­tory com­pli­ance.

“What’s cer­tain at this point is that Airbnb is not go­ing away, and so it’s in every­body’s best in­ter­ests to work to­gether to solve our con­cerns. It could well be that this ini­tia­tive pro­vides new op­por­tu­ni­ties for the re­gion’s cer­ti­fied guides, be­cause at present there’s an over­sup­ply of these skills,” she said.

Airbnb CEO Brian Ch­esky speaks on­stage dur­ing the ‘In­tro­duc­ing Trips’ re­veal at Airbnb Open LA on 17 Novem­ber.

Brian Ch­esky CEO of Airbnb

Pa­tri­cia de Lille Mayor of Cape Town

Bu­lun­gula Lodge on the Wild Coast

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