Airbnb has become synonymous with vacation rentals, there are, however, other companies in the holiday rental game, and as Glenn Fogel, CEO of Booking Holdings, formerly Priceline, will tell you, they have advantages.
Since Airbnb is often a back and forth negotiation, it can often be difficult to nail down a reservation, but Booking Holdings has 5.4 million instantly bookable properties available, compared to Airbnb’s three million. “The friction is so much less,” Fogel says.
Airbnb will soon go public, therefore, its competitors are keen to counter the free press the company will receive thanks to its expected 2020 IPO. The rental site, valued at $31 billion, has made a name for itself by allowing ordinary homeowners to get into the vacation rental industry by marketing their spare rooms or empty properties. The company has spent $300 million on marketing since it was founded in 2008, which has made it hard for competitors to make headway in the market, though the company states that their success is a product of their efficiency. “We don’t acquire customers by buying them. We acquire customers by providing a superior experience and having offerings around the world,” a spokesperson told Wired.
Booking Holdings, on the other hand, has spent $4.5 billion on marketing in the past year, yet it continues to be a lesser-known company than Airbnb. Fogel, however, would like to improve consumer awareness. Given that Booking is the world’s largest online travel company with a reported $12.7 billion in sales last year, it is hoping to propel Booking Holdings with an aggressive marketing push. As a first step, Booking has hired Olivier Grémillon, Airbnb’s former director of global strategy, to head up its homes and apartments division.
Fogel believes Booking can best Airbnb by listing hotels and home rentals side-by-side. “Many times the person does not know yet the type of accommodation they want,” he says.
Though Airbnb has claimed that Booking Holdings charges higher fees to hosts, Fogel points out that Airbnb charges a guest fee, which ends up making the added costs for both companies fairly equal. Booking is also planning to expand its tourism activity selections. In April, the company bought FareHarbor, which markets booking software and services to tourism companies. Fogel is confident that FareHarbor, which will integrate tourism activities into the reservation platform, will expand the company’s appeal. “We think it’s one foundational building block in what will be a very, very big building— this attractions and experiences area,” he says.
Airbnb has recently added Airbnb Plus and Beyond by Airbnb, which offer hotel-like rentals and luxury accommodations. The company says that 3.5 million of its listings are unique with business travel accounting for 15 percent of its bookings. Fogel believes that Airbnb will charge hoteliers more to remove guest fees, in an effort to make more rentals available for instant booking. “It seems to me they’ve been following us,” he says.