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Profitability Is Expected By Airbnb's 'Experiences' Business With Expected Booking Of 1 Million A Year

Profitability Is Expected By Airbnb's 'Experiences' Business With Expected Booking Of 1 Million A Year
Airbnb Inc’s efforts to register growth and business beyond its staple business of renting rooms and homes appears to be bearing fruits. The company announced on Tuesday that it was likely to make profits next year from its tours and activities business which is about a year-old. The company reported that tens of thousands of travelers are being booked every month by the business.
In an effort to transform itself into a full-fledged travel and tourism company, Airbnb had started offering a host of new services to travelers including excursions to see local attractions and reservations at restaurant in addition to the home renting business that it is known for. It has been more than a year since the company has been doing this.
The company has been under pressure from multiple regulatory authorities and it has been attempting to diversify its revenue generation streams and expand beyond its core business. the regulatory pressures have been such that it has been forced to wind up its core business in many cities through which local people rented a room or entire homes to guests and visitors.
Airbnb is betting that revenue from its new travel services will eventually eclipse its proceeds from home rentals. One of such ventures undertaken by the company is the “Experience” service which can be used by travelers for booking guided tours or activities offered by local residents. Airbnb expects that this service would be able to attract more than 1 million bookings every year starting by the second quarter of the current year. the company said that this was a conservative estimate since it does not take into account any future growth in business.
Since the company had started offering its services about a decade ago, more than 250 million home-and room – rentals have been recorded by it.
The company reiterated that by the end of 2019, its Experiences business segment, which is among the four different business units of the company, would become profitable.  
A range of over 5,000 excursions which are available in over 58 cities across the world is offered to travelers through its Experiences service. The cities range from a guided meditation in Paris, a making a kimono in Tokyo, glass-blowing in Chicago to wine tasting in California. Some of the offers make use of local specialties such as a tour of discovering the hidden stairways in San Francisco.
By the end of this year, another 25,000 travel experiences will be made available to users, the company said.
A 20 percent fee is charged by the company from the people who host Experiences. At the same time, a fee of up to 15 percent is charged from guests using its renting service and 3 per cent from people renting out their properties.
The company as a whole is profitable, Airbnb has previously said. The company is valued at $31 billion.

Christopher J. Mitchell

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