Putting AI into Airbnb

Why Airbnb acquired Gameplanner, the secretive AI company founded by the creators of Siri

In the ever-evolving landscape of travel industry, Airbnb’s recent acquisition of Gameplanner is a strategic move that signals the major changes brewing in the industry’s future.

This move transcends a mere expansion of Airbnb’s technological arsenal; it signifies the company’s rethinking of where it fits within the travel distribution paradigm.

Airbnb is a verb. But the business will be increasingly commoditized

Airbnb’s journey from a startup to becoming synonymous with vacation rentals is nothing short of remarkable. The company’s phenomenal execution has popularized the concept of vacation rentals globally.

However, the unique inventory that once fueled Airbnb’s differentiation and powered it’s distinctive brand is increasingly diluted. As more professional hosts list their properties across multiple platforms to maximize revenue, the distinctiveness of Airbnb’s offerings is fading.

This leads to a marketplace where price becomes the primary competitive factor for distribution channels, eating into Airbnb’s marketshare and take-rates in the medium term.

Whilst the threat is not immediate, Brian is already in search of a new moat to protect its future. And he’s found his answer in AI.

Discovering The Next Moat

The top of the travel funnel — encompassing discovery and planning — remains a fragmented and challenging space. Despite three decades of online travel booking, the user experience is still disjointed. Booking a trip, on average requires 30 sessions across 12 websites. And Google has remained the dominant force connecting the dots and owning the users for most of it.

Last year’s success of ChatGPT highlighted the potential the Large Language Models (LLMs) have in finally solving travel discovery and planning. Already, one in ten travelers use LLMs for travel planning according to Deloitte.

Whilst ChatGPT’s text led interface is not the optimal experience for travel planning, the LLMs powering it can be used in building hyper-personlized, proactive, and action-oriented ‘agents’ that completely reshape how travelers book their trips.

We expect to see a wave of startups leveraging AI to make the travel experience more personalized, efficient, and enjoyable

Opportunities in AI x Travel; Andreessen Horowitz

The race to solve discovery and planning is already on.

General AI agents like evolved versions of ChatGPT are one path, specialized travel-specific agents present another. Chesky is betting on the latter with Gameplanner’s acquisition, aiming to develop an AI layer that redefines personalized travel.

“I want to build the most personalized layer of AI. And then we want to design the AI interface”

Brian Chesky in Skift Interview

This is easier said than done.

Tailwinds Driving Airbnb Towards Discovery Agents

Airbnb’s top-down, founder-led approach to product innovation, spearheaded by Brian himself, enables a more effective execution of strategic initiatives.

This approach starkly contrasts with the data-driven bottom-up optimization product development of other Online Travel Agencies (OTAs), that make big overhauls more complex to execute.

A critical element in this strategic shift is the expertise brought by the Gameplanner team. Their track record in developing conversational interfaces, notably for Siri and Viv, is a significant asset. Moreover, Brian Chesky’s close relationship with the head of a leading AI research lab grants him early insights into cutting-edge AI developments.

Navigating the Challenges: Narrow Travel Data and Inherent Bias

While Airbnb has made remarkable strides in the vacation rental market, its efforts to extend beyond its foundational home rental services have encountered obstacles. A significant hurdle is the lack of extensive data and inventory in travel segments other than home rentals. For an AI-based planner agent to be truly effective, it requires not just a diverse range of travel content, but also an in-depth understanding of user preferences in different stages of their journey. This comprehensive approach might be challenging for Airbnb due to its current focus and data limitations.

Another potential issue is the perception of bias in recommendations provided by an Airbnb-developed agent. Users may perceive an inherent bias towards Airbnb’s inventory, potentially affecting the agent’s credibility and adoption rates. In contrast, a general AI agent or one developed by a metasearch entity, which typically has less direct inventory representation, might be viewed as more impartial by travelers. This perceived neutrality could make such agents more appealing to users seeking unbiased travel recommendations and planning assistance.

The Rise of AI in Travel: A New Era for Hosts

As AI agents become integral to travel discovery and planning, the landscape for hosts is set to undergo significant changes. These agents, whether developed by OpenAI or Airbnb, are reshaping how travelers find and book accommodations.

In this evolving environment, a robust content management process becomes crucial for hosts. It’s essential to ensure properties are accurately and attractively presented to both potential guests and AI agents. hostAI has developed hostWriter, a tool specifically designed to help hosts craft compelling, up-to-date narratives for their properties. This tool will enable hosts to adapt their property descriptions monthly, ensuring they align with the evolving preferences and needs of guests.

Furthermore, the advancement of AI in travel presents new opportunities for direct distribution. As AI agents offer hyper-personalized recommendations to travelers, the reliance on aggregation platforms like Online Travel Agencies will decrease. This shift levels the playing field, offering brand.com a greater degree of visibility. To empower hosts in this new era, hostAI has created hostDistro, an automated solution geared towards enabling and enhancing direct distribution for vacation rental managers.

For hosts looking to stay ahead in this dynamic market and fully leverage the potential of AI in vacation rental marketing, joining the hostAI waitlist is a strategic move.