Airbnb is setting its sights on disrupting the entire travel industry, not just hotels. In an interview with VentureBeat, the firm’s vice president of engineering Mike Curtis said that personalization could help expand itineraries from end to end, with Airbnb helping to arrange transportation, entertainment and other aspects of its customers trips.
Airbnb has already secured a dominant position in the world of accommodations, connecting people and places to stay at any price point in more than 34,000 cities across the world. Landlords can use Airbnb’s platform to market and monetize their properties to a global audience.
The company’s service is a massive hit with younger generations, but the company has faced challenges in its bid to broaden its user base among older travelers. However it has been successful in its efforts to do so, and now counts around 250,000 business customers that use its service to book accommodations for their employees.
The company charges guests (6-12% of total rental fees) and hosts (around 3% of their total earnings from the Airbnb site).
Airbnb’s original system was pretty basic, with searches based on the number of bedrooms available and price. However the company has now incorporated machine learning technology into its platform to enhance personalization. Now, its search results also factor in information about the guests themselves (including such things as the style or décor they prefer). In total Airbnb factors in more than 100 signals for its search results to personalize its customers’ experience.
This technique can also expand to how a user can price a listing. It’s based on historical data and travel patterns that reveal the probability of any listing being booked on any given night at any given price up to 12 months in the future. Hosts can consider these suggestions — daily, the algorithm recalculates these price predictions up to a year in the future.
Airbnb has been so successful that it’s now considered to be the world’s second most valuable tech company after Uber, at $30 billion. Now it’s looking to expand into luxury trips, business travel, city tours and other aspects of travel.
The Economist says Airbnb’s ultimate goal is to evolve into a comprehensive travel company, which would capture a greater share of the tourist market. Forecasts predict a possible $8.5 billion in revenues by 2020.
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