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Airbnb becomes even more like a hotel – does revenue management for hosts

11/17/2015| 9:00:04 PM| 中文

Two important announcements at the love-in for hosts put on by Airbnb in the French capital this week – both with implications for the rest of the industry.

First of all was the formal launch of the company’s push into providing dedicated properties for corporate travellers.

First revealed in July this year, Business Travel Ready is the expansion of what the company’s claims is its “hugely successful” Airbnb For Business programme.

Now hosts anywhere can identify their properties or rooms as having “business-friendly” services such as wifi, workspaces, iron, 24-hour check-in and no host cancellations within seven days leading up to a stay.

The idea is that Airbnb wants to formalise its approach to the corporate travel sector and allow more hosts to ” tap into the rapidly growing universe of business travellers already staying on Airbnb”.

The company struck its first business travel inventory deal with BridgeStreet in October.

But perhaps the most intriguing piece of new strategy revealed this week from the French capital is what the company has called “Smart Pricing”.

The official description is as follows:

“Smart Pricing pulls insights from booking trends and similar listing information and allows hosts to set pricing controls that automatically adjust to demands in order to stay competitively priced. Smart Pricing is tailored to individual listings so hosts can offer a price that is most likely to attract bookings, day by day.”

Beyond this there is inevitably a lot more going on than the host simply setting a minimum and maximum rate, as Airbnb essentially turns itself into the revenue manager for each of its hosts.

This is not a mandatory service for hosts (they can opt out and continue to manage published rates themselves), but those who do will be letting Airbnb set the prices for a property or room based on its own data and analysis.

The idea that Airbnb would obviously like to get across is that it wants to be able to react to factors that perhaps the owner had not considered, in turn being able to maximise the revenue for the host (and Airbnb, of course).

Hoteliers might eye this latest move with a mixture of curiosity and scepticism, given that now Airbnb now has the ability to monitor competitor rates in a city as a whole or specific area and then alter prices accordingly.

Airbnb has been recommending price points to owners for a while, but now giving the host the option to hand that pricing control over to Airbnb is a considerable shift in strategy.

Meanwhile at the conference in Paris, other new services were introduced as as a mentoring scheme for newbies, a key management service and community center forum.

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TAGS: Airbnb | revenue management | business travel | short-term rental
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