Tweet Your Own Adventure
A few suggestions for the future of Airbnb
In the late 2000’s, I was a real estate industry journalist — also known as an equity research analyst. It was my job to shed light on a company’s story by examining much more than just the numbers. I enjoyed investigating management’s motivations and each company’s competitive advantage (if they had one). During my four-year tenure in the role, I was very surprised on the lack of technology utilized in the real estate industry. The REITs I covered were huge public companies with human-intensive processes that mirrored mom and pop operators. Four years later the commercial real estate sector continues to lag in innovation. However, there are a number of indicators that the use of technology will provide certain real estate businesses with huge advantages in the marketplace through data analytics, online marketplaces, and portfolio optimization.
One of the many emerging bright spots within the CREtech industry is Airbnb. I was first introduced to this startup in 2012 as an economical MBA student who pushed the limit on finding a place to live for my study abroad session in London. The school did not provide us with housing but suggested that we sublet from current LSE students who were looking to study abroad in the States. After seeing the asking prices from LSE students (and gasping when I realized I still had to multiply the rate by 2), I knew I had to find other living options and Airbnb provided just that. I was able to find a more affordable option and accumulate too many stories to count by living in Shoreditch (Hipster town) with a 45-year-old Turkish male ballet instructor.
Since that moment, I have been really interested in the Airbnb story. This company has put the hospitality space on its head with a global footprint reaching over 34,000 in 190 countries. The “story” of Airbnb takes me back to my equity research days and inspires me to contemplate how the company might grow through partnerships and M&A activity. Over the last six months, a number of articles have caused me to think, “Airbnb is well positioned and equipped to enter this new market.” The following are a few quick thoughts on where Airbnb could establish a stronger presence next:
Student Housing
Finding student housing is a pain. This problem made me a believer in Airbnb’s value proposition when I was a study abroad participant. The market has some barriers given that colleges and universities control a majority of the student units. But, colleges typically do not want to deal with sub-leasing and this presents an interesting opportunity with nearly 300,000 students studying abroad each academic year.
Companies in the space currently: Leaseful
Pricing Service to Optimize Portfolios
When I found out about how Airbnb’s pricing tool is utilizing all types of data points to provide dynamic pricing suggestions for its host, I thought this could be spun out as a service for other real estate related pricing. Why couldn’t this Airbnb service be sold to portfolio managers of real estate companies to find what is the optimal ask price for a 3 bedroom apartment in Manhattan or a 15 unit multifamily property in San Francisco?
Meeting Space/Co-Working Spaces
When Social Capital’s Chamath Palihapitiya suggested that real estate giants are well-positioned to take advantage of the high burn rates of startups, it made me think why can’t Airbnb dominate this market. Airbnb has a much larger and trusted brand than current players such as Breather, PeerSpace, and WeWork.
Business Travel Packages
Airbnb’s “Business Traveler Ready” feature opens up a lot of possibilities for the future of the company. I would suggest that the company builds out the feature to bundles tech-enabled services/amenities through partnerships with rental car services such as Flycar or Silvercar and on-demand delivery services such as Postmates.
Let me know what option (or adventure) you would suggest for Airbnb in the comments section.