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Dipping into home design makes sense for Airbnb

01/08/2019| 2:26:57 PM| 中文

The news sparked speculation that Airbnb is planning to eventually manufacture its own lodging, perhaps even sell real estate. An Airbnb spokesperson denied such speculation.

As Airbnb prepares to go public this year, the home-sharing giant has done anything but lay low. The company drew its fair share of buzz in 2018 with actions that ranged from launching its Airbnb Plus program to ramping up focus on its Airbnb for Work business travel offerings and officially opening its platform to hotel distribution.

Few of the company's recent headline-grabbing moves, however, have generated as much curiosity as its December announcement that it was entering the home-design space.

Known as the Backyard project, the initiative is billed as an effort to "prototype new ways that homes can be designed, built and shared." The program is being spearheaded by Airbnb's Samara division, an experimental product development team led by Airbnb co-founder Joe Gebbia, who plans to start testing prototype units as early as this fall.

Further details have yet to be released, though Airbnb said that Backyard would seek to innovate on a variety of design and construction fronts, including manufacturing techniques and smart-home technologies.

The news sparked speculation that Airbnb is planning to eventually manufacture its own lodging, perhaps even sell real estate. An Airbnb spokesperson denied such speculation, asserting that the Backyard project "is not an initiative to manufacture or sell homes at scale." Still, analysts say a foray into design and manufacturing would be in line with Airbnb's efforts to create a more consistent and controlled hospitality experience.

"We're seeing Airbnb moving more toward trying to establish quality assurance and offer more professionalized experiences," said Daniel Guttentag, assistant professor of hospitality and tourism management at the College of Charleston's School of Business and director of the department's Office of Tourism Analysis. "In terms of them developing their own property assets, it's certainly not in their precise wheelhouse, but given how willing they are to innovate, it wouldn't be surprising."

Guttentag drew comparisons between the Backyard initiative and Airbnb's recent partnership with apartment developer Niido, under which the pair have opened Airbnb-branded apartment complexes expressly designed to accommodate short-term rental subleases. Airbnb has Niido properties in Nashville and Orlando. 

Likewise, Makarand Mody, assistant professor of hospitality marketing at Boston University's School of Hospitality Administration, pointed out that it's not the first time Airbnb's Gebbia has dabbled in home design. In 2017, he said, Gebbia collaborated with Japanese architect Go Hasegawa and the rural community of Yoshino, Japan, to open the Yoshino Cedar House, a home built to function as both an Airbnb short-term rental and a cafe. 

Still, Mody questioned the company's ability to move its Backyard prototypes or a Yoshino Cedar House-style experience into the mainstream.

"Airbnb's success over the years has been due to its ability to scale up very, very quickly," Mody said. "I wonder how scalable they can make something like [Backyard]. I can see this working in isolated situations, like in the case of the Japanese house, but I'm wondering how Airbnb will think about scaling this across the world and even in different use-case situations."

Having the ability to quickly build Airbnb-designed units, however, could be a boon to the company's growth plans, especially as Airbnb starts to face challenges in adding new inventory. 

Guttentag said he didn't think that Airbnb's "growth in listings is moving at rocket speed anymore, especially in traditional markets where the service may have caught on earlier." He added that the company's decision to add boutique hotels to its listings is likely a play to both grow its inventory and hedge against potential regulatory crackdowns. 

Mody said he views Airbnb's pushes into verticals like business travel, boutique hotels and even home design as part of a broader diversification strategy, especially as the home-sharing landscape reaches what he calls "a bit of a saturation point."

"Airbnb right now is really one brand," Mody said. "But I think they're looking at more of a sub-branding approach as their supply and business become more varied. In a way, Airbnb is getting into the business of soft branding. Airbnb is also realizing it's not just a home-sharing brand or even just an accommodations brand. It's a brand that provides space."

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TAGS: Airbnb | Backyard
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