Wednesday, February 14, 2018

Airbnb: Poacher Turned Gamekeeper is part of the American company The Priceline Group. It is also one of the four largest online travel companies in the world: the others are Expedia, the Chinese Ctrip and Airbnb. Booking offers all sorts of accommodation. As far as its rentals side is concerned, it has been commended by certain regional authorities in Spain for being rather more willing to comply with regulations than other online concerns: Valencia has been one, the Balearics another.

Expedia used to be TripAdvisor's parent company. The website that is ostensibly about user reviews was spun off from Expedia, which has since acquired HomeAway, perhaps the biggest rival to Airbnb. TripAdvisor branched out to become its online travel company as well. It, as with HomeAway and Airbnb, has fallen foul of regulators in Spain, such as the Balearics.

Airbnb, it doesn't really need pointing out, has grown to be the business it is by being an "intermediary" for non-hotel accommodation. This is now, however, all about to change. Airbnb, rather than just being an online travel company (which it would in any event dispute), is to become an online travel agency - an OTA, the term used for the likes of Again, of course, Airbnb would dispute that it is or will be an OTA.

What is changing is that a tie-up with another website - a non-exclusive one with SiteMinder - means that hotels which appear on SiteMinder can also go on Airbnb. Yes, Airbnb is to become a hotel distributor, just like Booking and Expedia. The website so maligned by the hotel industry will now, if hotels wish, become something of a friend. As Airbnb appears to have no limits in its ambitions in becoming an "infinite" company (CEO Brian Chesky's term), you can be pretty sure that the first foray into hotel distribution will only grow much bigger.

Hotels have already been able to use Airbnb, but only an individual basis. They now stand to be incorporated en masse, and they also stand to benefit from the vastly more favourable commissions. Booking and Expedia will be looking on all this with some degree of horror. The difference between Airbnb and Booking/Expedia commissions is anything from three or five per cent to fifteen or thirty per cent.

The Airbnb commission range may change, but for now it will look very tempting. And as such, it puts hoteliers into more of a fix. Can they carry on being as aggressive towards Airbnb if they want to take advantage of the more advantageous commissions?

The massive global industry that is accommodation is undergoing yet more revolution. There is Facebook and there is also Amazon. And as these global concerns move into new product areas, so they move further away from what they were originally, none more so than Airbnb. The disingenuous propaganda about the collaborative, sharing economy is further undermined by having a hotel product. There is nothing sharing about this; it is business pure and simple, and hugely profitable it is, too.

Moreover, the Airbnb (and HomeAway) argument about being merely intermediaries which operate in accordance with European e-commerce regulations is also further undermined. The European ruling regarding Uber, which basically determined that it is a transport services operator subject to member state regulations, has yet to be applied more broadly. But the European Commission will have greater evidence to rule that Airbnb is a travel services company (an OTA), which brings with it very different regulations to that of e-commerce. And that would mean that there would be far less defence against the type of fine that the Balearics and other administrations care to dish out.

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