Big Interview: Airbnb and Booking.com – rivals divided by religion?

Former Airbnb EMEA MD, now Booking.com Home VP, Olivier Grémillon spoke to Lee Hayhurst at last week’s Phocuswright Europe conference . Continue reading →

Former Airbnb EMEA MD, now Booking.com Home VP, Olivier Grémillon spoke to Lee Hayhurst at last week’s Phocuswright Europe conference.

With travel giants Airbnb and booking.com now both claiming to have five million privately owned homes available on their sites, does religion provide the answer to the question what differentiates them?

That’s certainly the view of one man perfectly placed to have a view on what sets the rivals apart, Olivier Grémillon, vice president of the home division at booking.com. Until December last year he was EMEA managing director at Airbnb.

Grémillon spoke to Travolution after giving the final keynote address at this month’s Phocuswright Europe conference in Amsterdam. On stage, he had been pressed to confirm that Booking.com’s homes total was truly comparable to Airbnb’s.

He insisted it was and that units were counted in very similar ways at both firms. Booking.com’s portfolio was more ‘vacation’ than Airbnb’s and included a greater proportion of professionally managed properties but that single property casual host is its fastest-growing supplier type.

Different DNA

Asked, following his keynote, to expand on what he sees as the key differences between the two sites Grémillon explained it comes down to a belief in data-driven test-and-learn evolution on one side and a more determinist, guiding hand approach on the other.

“The companies could not be more different from each other in many different ways. The DNA is completely different in the ways they operate.

“Airbnb is doing a lot more things from a top-down perspective. We are going to go more step by step, we do not have a preconceived notion of how things should be done.

“We want to empower people to discover the world. How do you do that? By adding as much choice as possible and make it bookable. That’s the mantra of the company. The domain is booking.com for a reason.

“We look at everything through the leans of data. Numbers do not lie. You experiment, do a lot of different things and if it doesn’t work, it doesn’t work. It’s been interesting to learn how the company’s been built through testing, not by having a religion about something up front.”

One approach that booking.com discovered did not work before Grémillon’s time was having a separate site and domain for villas, www.villas.com. Booking.com found customers’ preference was to come to the parent site looking for villa-type accommodation, and in the Priceline-owned OTA’s customer-centric world, what the customer wants, the customer gets.

This is what is driving the site’s move to become a “one-stop-shop” for travel with the creation of Booking Group and integration of Rentalcars for ground transportation, recently acquired FareHarbor for attractions and some experiments with flights through its metasearch arm KAYAK.

Value proposition

On the Phocuswright stage, Grémillon had explained this evolving positioning of the brand. “Put yourself in the shoes of the customer. Most want accommodation when they go somewhere but most do not know if they want an apartment a hotel or a villa when they start their search – 66% consider hotel at the same time as renting a villa or apartment.

“It’s actually the value proposition – having everything on the same platform – that is what the consumer wants. We want to become a one-stop-shop in accommodation in the same way we want to become a one-stop-shop for travel.

“In some cases we will leverage the other companies in the group or we could do it on our own. Our vision is to have an end-to-end offering for the traveller so they can find anything they want on booking.com.

“It’s a very long-term vision. Before the services are optimal not a lot is going to happen. But we need to start and we also need to get scale and we are not there yet for most of these other services.”

Airbnb has also indicated its move towards a one-stop-shop, officially opening up its platform to hotels, adding experiences as a product category, and talking about one day offering flight search.

So maybe the differences between to two sites are being overplayed, but Booking.com’s claim of greater customer centricity is bolstered by its model of charging a flat 15% commission rate for hosts compared to Airbnb’s host fee plus a variable guest charge.

“We want to make it simple for the customer user,” said Grémillon, “that’s why everything is instantly bookable, that’s why we have no user fees. It does not matter to the customer where the fee is levied. It matters how much they pay.”

Clearly one of the key differences in the customer experience the two sites’ provide relates to Airbnb’s founding ‘live like a local’ principal and the role the host is promoted as playing in facilitating that.

However, as Airbnb’s inventory becomes more multiple ownership and professionally managed this product differential will become less clear and Booking.com is working on its assistant chatbot technology that will enable most of the common questions asked by customers about their accommodation to be answered automatically.

It also has 8,000 customer service agents on hand offering for human to human support.

Technology and transparency

Booking.com will also look to partner with property management services and develop its own technology to give home owners greater control of their listing and a degree of vetting of who can stay in their properties, while maintaining instant bookability, said Grémillon.

Greater transparency is also important on the customer side both in terms of giving them confidence that the property is genuine and properly listed and what safety features are provided.

“When you sign up you do not necessarily get instant availability on the platform. There are a lot of checks to make sure you are who you say you are and the location is where you say it is,” said Grémillon.

“We display as much information as possible about what you have in your home like a CO2 detector or fire extinguisher. It’s clear on the platform that people know what they are getting into.

“On one side you have apartments and private rental versus being in a hotel where standards are different. I think we can still do more on that side and we are looking into that. Transparency around what people are booking and their expectations is key.”

Regulation and ‘overtourism’

Something that both Booking.com and Airbnb are likely to face in the future are accusations that they are part of the problem of ‘overtourism’ in many hotspot destinations and not doing enough to be part of the answer.

Grémillon said it is up to the cities and regulators to make a decision about tourism and its impact on local communities – the benefits it bring and the limitations that should be imposed.

He said Booking.com is increasingly being invited to give its opinion but ultimately they must decide what is best for their communities and it will comply with whatever regulations are agreed.

“Cities need to have an opinion about this. It comes down more and more to urban planning and deciding what tourism means for the city.

“Many are starting to approach this in the right way. They need to find the right balance, which is not easy. If it’s clear I’m in favour of regulation but very often it’s not clear.

“They will have to sort it out because there are a lot of voices on both sides of the debate. Is it someone trying to push an agenda? Let’s be open about it and talk about it with multiple players to decide the best way forward.

“Listening to the most vocal may not be the best way to make a decision. But a lot of cities are starting to have this discussion to get a balanced view of what they are trying to do.”