Airbnb went from tiny startup to global travel behemoth at blinding speed. When it came time to launch its second act, though, it took the opposite approach: keeping it small by design, says CEO Brian Chesky.
Last November, Airbnb introduced a platform for travel services known as Trips, the hallmark of which was Experiences, a new category of bookable one or two day excursions with locals. Earlier this month, the company launched its Experiences marketplace in New York City, its 40th market and its biggest so far, with an inventory of 150 options ranging from gospel singing in Harlem to touring thrift stores in Brooklyn to a historical tour of tattoo artistry on the Lower East Side.
Fortune sat down with Chesky for an update on how the much-heralded business is performing almost a year in and the economics of “experiences.”
Fortune: You launched your Experiences platform in New York last month. This rollout is a lot different from your homes business: For starters, you have to actively “launch” in each new market, and unlike with their apartments, people can’t just throw up an ad for their Experiences by themselves. Why do it that way?
CHESKY: With Experiences, we tried a different model, a more managed marketplace where people would have to qualify and we’d have to then approve them. It was important to do that for two reasons. The first is [we were] trying to [apply] some lessons of the core [homes] business. Obviously having been an unmanaged marketplace, the benefit was it allowed us to grow and really quickly build a really strong network. And we probably wouldn’t have had the resources to manage it if we wanted to. But we also felt that with Experiences it was more important to start with a managed marketplace because with a home, it has to be at least good enough for somebody to live in, so there’s an inherent quality bar. With experiences, because it was so new, there was no established quality bar. When we were doing pilots, some experiences were amazing, some weren’t even experiences. So having some kind of management [made sense].
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