Online home rental marketplace Airbnb has been trying to branch into new areas with its Experiences service, an offering that focuses on unique experiences for travelers, but the efforts aren’t paying off — at least so far.
That’s according to a report in the Wall Street Journal highlighting the troubles Airbnb is having with getting the service to take off. The paper profiled one host, photographer Martin Cohen, who was featured in the service's announcement in November 2016 and offered night sky photography classes. Cohen stopped offering the class through the Experiences service after averaging only one booking per month.
Such results showcase the challenges Airbnb is having as it expands beyond acting as a middleman for people to book lodging in other people’s homes or apartments. When Airbnb announced Experiences, the offering was touted as the company’s biggest product launch since its founding. The idea is that people who use the site to book accommodations would also use it to find cool and unique things to do while traveling.
Airbnb is upbeat about the prospects for the service, however, predicting it will hit $200 million in annual gross sales by the end of 2018. That would mean approximately $40 million in sales after the company gets its 20 percent commission. Experiences reportedly generated $10 million in gross sales in 2017, with Airbnb making $2 million from commissions.
It would be a notable jump if revenue from Experiences reached $200 million this year. One person familiar with the matter said Airbnb has lost more than $100 million from the new service. Airbnb disputed that claim and called the figures inaccurate, but declined to provide more details. In fact, the company projects Experiences will be profitable by the end of next year.
“We are excited that the returns from the launch of the Experiences product have more than validated the investment and exceeded our expectations,” Airbnb said.