20 Dec 2016

Airbnb and third party distribution – and so it begins again?

Airbnb has dipped its toe back in the waters of third-party distribution, almost a year to the day since it axed its original affiliate programme.

The global property-sharing giant has signed a deal this week with two Japanese travel search sites to allow its inventory to feature alongside other accommodation providers.

Visitors to both Travel.co.jp and Travelko will have access to the full Airbnb portfolio of three million products in 34,000 destinations in 191 countries, including 46,000 properties in Japan alone.

The partnership has come about by way of connecting to Airbnb via a content API that has been in place for a number of years, similar to the integration with fellow YCombinator-alum Hipmunk since 2011, when the fledgling travel search startup launched its accommodation search service.

But over the years Airbnb has always been extremely picky as to which brands it allows to access content for travel search purposes.

In December last year, around 100 third party websites lost their ability to showcase Airbnb content when the company axed its affiliate programme (though the Hipmunk deal remained in place).

Getting hold of Airbnb product has become somewhat of a Holy Grail in recent years, as the alternative accommodation marketplace has shifted into the mainstream — triggered in part by the acquisition by Expedia Inc of HomeAway for $3.9 billion in 2015.

The acceptance that such product, especially Airbnb’s inventory, is a genuine part of the accommodation landscape has meant travel search sites are desperate to include the company’s product with that from other providers.

HomeAway has given access to travel search sites for a number of years, yet Airbnb has remained largely elusive (even GoEuro‘s partnership is just a simple click-off to Airbnb from its homepage).

But perhaps this is now likely to change, with the two Japanese travel search sites the first in a gradual but measured shift in strategy.

It is “definitely a possibility”, an Airbnb official tells Tnooz, following the announcement of the two deals in Japan.

Previously, Airbnb was considered to be an “isolated marketplace” by some commentators, with the policy being an advantage to the brand if — like the Ryanair model up until 2014 — consumers could only search for its content on the mothership.

The idea was that Airbnb didn’t need to distribute via third parties in order to grow, with the obvious cost-savings of such a strategy also being beneficial.

Furthermore, as an executive for a travel search site says, Airbnb’s “community is strengthened by it reinforcing the values within its own product”.

“It’s not as much of a community if the rooms are treated like a commodity.”

So what may have signalled the recent change?

One obvious trigger could be the growth in rental-type business over at the likes of Booking.com, which has put a lot of effort into alternative accommodation in recent years (although it has since quietly closed the standalone Villas.com brand to concentrate on bringing product on to its main branded platform), plus Expedia being able to shift more HomeAway inventory as a mainstream product.

And then there is TripAdvisor and its own efforts to push vacation rental properties alongside hotels.

As the earlier mentioned travel search executive explains:

“The first serious distribution step could be showing up on hotel OTAs or meta sites that don’t have competing home/apartment options.”

It appears that taking into account the new developments in Japan, Airbnb has softened slightly.

In fact, some might argue that Airbnb is throwing its considerable weight, instead, into the new Trips strategy.

But this perhaps doesn’t seem to be a needle-moving idea, according to some, at least in terms of where Airbnb’s overall growth will come from.

In a note released this week, Alice Jong, a research analyst at Phocuswright, says accommodation is “scalable” yet so-called “experiences” are less so.

In fact, Trips could only be 1.1% of the company’s overall business over the course of the next 12 months (a “rosy assumption“, too, Jong says).

There is nothing to suggest that a shift in its distribution strategy is because there are potential issues around the scalability of the core product, accommodation. But the wider context of an emerging threat from the established online travel agencies could have triggered a rethink — again, as Ryanair did nearly three years ago.

If nothing else, a gradual opening up to travel search sites — assuming that Airbnb is doing exactly that —would bring some yuletide joy to the likes of AllTheRooms and the heavily-backed Tripping.com, both of which would no doubt privately be raising a glass to their ability to have content from Airbnb officially (and finally) make it available.