Diluting its short-term rental business is one thing Airbnb won’t need to worry about if it indeed increases its hotel offerings in New York City.
Now that Airbnb has seen its listings numbers collapse in New York City because of a regulatory crackdown, the short-term rental company thinks boutique hotels can help fill the gap.
CEO Brian Chesky, when discussing the impact of NYC regulations during Airbnb’s earnings call last week, said adding more boutique hotels is “a real opportunity.”
“We still have a lot of traffic of people searching for New York, and we now have a lot less inventory than we used to have, so there’s a real opportunity for us to supplement what used to be homes with boutique hotels,” Chesky said.
If you search Airbnb using its hotel filter for a December 7-8 stay in New York City, you’ll find listings for The Parc Hotel in Queens ($220 per night), The Millennium Hotel Broadway Times Square ($560 per night), and The Manhattan Club ($539 per night). The Parc Hotel, with fewer than 100 rooms, might be considered a boutique hotel, but the other two have hundreds of rooms or suites.
It’s unclear whether these hotel listings represent a new push by Airbnb. Short-term rental apartments and vacation rentals are its primary business, but it has long offered hotel stays.
Chesky noted that lots of boutique hotels are already listed on HotelTonight, the app Airbnb acquired in 2019 for more than $400 million.
An Airbnb listing for The Parc Hotel in Queens, New York. Source: Airbnb
Airbnb could leverage HotelTonight’s relationships with boutique hotels to onboard them to Airbnb.
HotelTonight offers listings in New York City for a November 6-7 stay at the Millennium and The Manhattan Club, but also at the Kimpton Hotel Theta, the Selina Chelsea New York City, and Even Times Square South, for example.
How Would Boutique Hotels on Airbnb Be Different Than Elsewhere?
Chesky said that Airbnb is on the way to becoming a travel agent powered by artificial intelligence, and that enhanced personalization can be a differentiator.
“As Airbnb becomes a little more of a so-called like AI travel agent, which is what I think all travel apps will trend towards to some extent, I think there’s opportunity for us to do things in a differentiated way even with slightly less differentiated inventory,” Chesky said.
Focusing on Airbnb’s Core Business
Airbnb had begun to onboard more boutique hotels after acquiring HotelTonight, but set aside that strategy at the beginning of the pandemic in 2020 to focus on its core business.
“I think our bread and butter for accommodations are always going to be homes,” Chesky said. “I think that’s where our heart and soul is. I also think that’s where the biggest growth opportunity is. But you should not think of our total supply – addressable market — as only homes. We’ve had hotels. We’ve just been prioritizing homes because we wanted to be really focused.”