AirBnB has revolutionized the business of renting vacation rentals and much of the company's success is down to their innovative business model. However, no business can stay on top for long without constant reinvention and according to a Bloomberg report, Airbnb is now planning to offer high-end vacation rentals as part of a new service.
Airbnb goes lux
Airbnb, which is valued at $31 billion has slowly but surely become a leader in its industry but with this move, the company will be able to increase their profit margins significantly by appealing to the demands of wealthier users.
It is a move that should unlock a lot of value for the company and boost margins significantly since higher rentals will bring in a bigger cut for Airbnb. Bloomberg spoke to officials who are familiar with the developments and according to them, the new service is referred to as 'Airbnb Lux' by people within Airbnb. However, the company has not yet decided what the service will be called.
It will allow users the option to choose from among thousands of luxury Vacation Rental properties and it is expected to be launched in select locations later on in the year. Airbnb will not have any trouble when it comes to listing new properties either since it has already acquired the Canadian company Luxury Retreats.
That acquisition gives Airbnb a starting listing size of around 4000 luxury vacation rental properties.
A long game
Although there is no doubt that this new service makes a lot of business sense for Airbnb, it seems that it is part of a wider strategy of diversification. According to the Bloomberg report, catering to high-end clients will provide the company with the opportunity to sell some of the services that it provides in addition to acting as a broker for rental properties.
Last year, Airbnb introduced services that were clearly aimed at wealthier clients. Some of them include truffle tasting and tours that are wholly managed by local travel experts. These services are quite expensive and will definitely find favor with wealthy clients.
Airbnb aspires to evolve into a full-service travel company and these are the first steps towards that evolution as the company continues to launch services that are aimed at unlocking value.
Other than the services that the company has already launched, it is working on a host of other offerings and one of them is an air ticket booking service that will further add to its appeal as a traveling service.
