Airbnb is reportedly expanding into the professional vacation rental market, as it looks to broaden its reach into a more established sector of the travel industry.
The home sharing site is developing software to help property managers streamline schedules and prices, as well as link their properties to the Airbnb site, according to The Wall Street Journal.
While Airbnb faces tough competition in the professional vacation rental business from established sites such as HomeAway (AWAY) and TripAdvisor (TRIP), Yahoo Finance’s Aaron Task notes that moving beyond short-term home rentals could be advantageous for Airbnb.
“It’s a huge potential growth opportunity for them," he says. "They've grown very quickly in a lot of cities around the world....Now they're going into the professional market and working with vacation rental property owners of beach resorts and ski resorts. It is a much bigger opportunity potentially for Airbnb."
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Airbnb faces pressure to continue its growth trend, as it seeks to raise more than $1 billion in its next funding round, reports the Wall Street Journal.
“[Airbnb is] looking to raise money somewhere around a $25 billion dollar valuation, and to do that you need to be able to show you have continued opportunities for growth," says Task. "This professional vacation market is one of those opportunities that they see.”
Over the past year, cities including New York and Santa Monica have cracked down on Airbnb rentals. New York recently removed thousands of Airbnb listings it deemed to violate tax law, while Santa Monica banned most types of Airbnb rentals. This adds additional pressure on the company to explore other markets, notes Task.
"There's a lot of pressure from the hotel industry and other regulators looking at Airbnb," he says. "I think they're trying to address some of those issues by saying 'We're going to go professional and we're going to pay the taxes just like HomeAway.'"
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