One of the most oft-cited criticisms of startups—especially mobile firms—is that they sell a solution in search of a problem. Airbnb is making a powerful case that such comments do not apply to them, as they are seeing soaring growth among business travelers specifically because the mobile service explicitly addresses holes in the existing hotel space.
What Airbnb does is find houses and apartments that are going to be vacant and leases them out to business travelers. Not only can it deliver better locations, more space and greater services, but there’s a much better chance space will be available when it’s needed most. One large convention can book almost every good hotel room in a city. It’s when business travelers can’t get a room at all that Airbnb’s business case starts to make a ton of sense.
Lauren Hauber, who does business development for Wildlife Works, an environmental firm in Mill Valley, Calif., was quoted recently in a New York Times story about Airbnb. When traveling with associates for a major tradeshow in August—it was SXSW Eco—she found what Airbnb delivered was less expensive and much more convenient than a hotel would have been.
“I really like having a kitchen. A lot of times they’ll have washers and dryers. I don’t feel like I’m losing anything by using an Airbnb,” she said.
Also, when large groups of employees are traveling together and will need space to meet and discuss plans, a house is much more accommodating than hotels. A room has limited space, leasing a conference room is too expensive and the lobby is not nearly private enough. Speaking of privacy, at a major tradeshow, that hotel is likely also housing your direct rivals, making any comments in the lobby or restaurant dangerous. A private leased house negates all of that.
The trend is huge, with companies of all sizes exploring options beyond hotels, usually with an eye on cutting costs.
“We’re seeing really kind of shocking growth in the use of Airbnb by business travelers,” said Tim MacDonald, an executive vice president with Concur, which designs software for managing business expenses and travel.
This trend is unlikely to limit its impact to Airbnb, with lots of payments services—especially in B2B—being impacted.
“The trend is part of a growing reliance on the so-called sharing economy, which also includes companies like the Uber car service and TaskRabbit, where clients can find people to help with everyday chores and other tasks,” the Times story said. “Although Airbnb declined to give the number of business travelers using the service, at least 55 companies are using the site to plan business trips, said Lex Bayer, who heads Airbnb’s business development. The site’s new business portal mostly excludes shared apartments and quirkier properties, like boats and tree houses, in favor of entire houses or apartments, Mr. Bayer said.”
The story said that not all companies are so enamored by business travel. Airbnb’s most direct rival, a firm called HomeAway, has deliberately avoided business travel and plans to continue to do so.
One silver lining for the business traveler. The growth of sites such as Airbnb will probably force hotels to lower prices and boost services so as to more effectively compete for business travel dollars.