The Airbnb story began in 2008 when two friends shared their accommodation with three travelers looking for a place to stay. Just over a decade later, it is estimated that the company now accounts for over 20% of the vacation rental industry. As a travel platform, Airbnb competes with other brands like Booking.com, VRBO, FlipKey, and given its massive amount of traffic from Google. Also, platforms like Google Travel can be considered potential competitors able to cannibalize part of Airbnb’s market.
Many think of Booking.com as an online hotel aggregator, but the company also lists over 6 million private homes and apartments.
This means that vacation rental listings compete directly with hotel vacancies during a search.
As a result, it is thought that holiday makers searching for hotel accommodation may then change their minds after being exposed to private listings.
To increase conversions, Booking.com also offers a range of tools to private property owners.
In some cases, the Booking.com commission fee is much lower than a comparable Airbnb fee.
VRBO is a veteran of the vacation rental industry, having been founded in 1995.
Owned by the Expedia Group, property owners who use VRBO tap into approximately 730 million monthly users who visit the Expedia global family of sites.
While VRBO matches Airbnb in terms of diversity of property types, it cannot compete with the sheer number of properties that Airbnb lists.
Having said that, VRBO tends to be geared to more affluent users or families who require larger homes.
Like Airbnb, VRBO users can earn titles by maintaining high average ratings and low cancellation rates.
Commission fees between the two companies are also quite similar.
A key competitor of Airbnb, FlipKey is an online marketplace listing more than 830,000 properties in 190 countries.
FlipKey allows owners to list their properties for free and gives users the ability to search for properties using a variety of parameters.
The company also offers a group booking facility in most of the world’s popular tourist destinations.
The fee structure is the most defining characteristic of FlipKey, charging a 3% processing fee and a subsequent fee of 5 to 15% of the total rental cost.
In recent years, search engine company Google has been exerting its influence in the vacation rental market.
In partnership with certain online travel agencies and channel managers, Google now incorporates vacation listings into Google Maps and travel-related search results.
Google represents a major competitor to Airbnb – at least where the organic search is concerned.
Vacation rentals listed through one of the search engine’s trusted partners are likely to occupy a high visibility position and be seen by millions of searchers.
TripAdvisor (TA) is the largest review site on the internet with almost half a billion monthly users.
Like Booking.com, TA is an online travel agency as opposed to a rental marketplace.
Nevertheless, it offers hotel accommodation alongside vacation rentals and other services such as car hire.
TripAdvisor can also be read in 26 languages, so it could be argued that TA has far more reach than Airbnb.
To further increase its reach, TA owns a suite of related sites such as FlipKey and Holiday Lettings.
- Airbnb has cornered 20% of the vacation rental industry, but it faces high competition from companies offering low commissions for property owners.
- Traditional hotel booking companies such as Booking.com and TripAdvisor are now offering private vacation rentals alongside their hotel room listings. This has the potential to increase their reach.
- Google is also becoming a significant player, advertising vacation rentals in Google Maps and giving Google-owned listings priority in organic search results.
Related To Airbnb Business Model
Main Free Guides:
- Business Models
- Business Strategy
- Business Development
- Digital Business Models
- Distribution Channels
- Marketing Strategy
- Platform Business Models
- Tech Business Model
- What Is Entrepreneurship