Airbnb Launches Travel App in Push to Diversify

Airbnb launched a new program on Thursday called Trips to transform itself into a travel company, marking the most significant expansion since the company was founded eight years ago as a home- and room-renting service.

Chief Executive Brian Chesky kicked off a three-day event in Los Angeles with the announcement that Airbnb would offer travelers the opportunity to create customized itineraries for hours or days that afford a more authentic local experience.

“If you want to travel, you basically end up on a research project,” Chesky said. “We want to fix this.”

The diversification away from its core service, in which people rent out spare rooms or entire apartments and houses to travelers, could be important to the company’s continued growth as it faces a regulatory crackdown across the globe.

Airbnb, which boasts some 100 million users in 34,000 cities, is betting that revenue will eventually eclipse its proceeds from lodging, Chesky told Reuters.

“The Airbnb you knew as of yesterday will be a minority of our revenue in the future,” Chesky said in an interview.

Through Trips, customers can book a range of local activities—from a cooking class in Florence to a violin-making workshop in Paris—and find attractions that are not on the tourist circuit.

“The services are available now as an upgrade to the Airbnb app in 12 cities and will be in more than 50 cities next year,” Chesky said.

Flight and rental car bookings will also be part of the service eventually.

The new service comes as cities from New York to Amsterdam and Berlin work to limit short-term rentals, which critics say exacerbates housing shortages and drives out lower-income residents.

New regulations threaten to erode Airbnb’s revenue and its $30 billion valuation, which far exceeds that of any hotel company.

“Airbnb also hopes this will help them better compete against Expedia, TripAdvisor, Priceline and other online travel companies that offer destination activities,” said Henry Harteveldt, travel industry analyst for Atmosphere Research Group, CNET reported.

“What’s unknown is how much net profit Airbnb will make. There’s often not much margin in sightseeing tours and other destination activities. For this to be viable, it must be scalable.”