21 Sep 2017 - 0:00
Airbnb adds restaurant reservations to compete with Priceline
By Olivia Zaleski / Bloomberg
Airbnb Inc. is expanding into restaurant reservations, part of the startup’s plan to become a full-service travel-booking company like Priceline Group Inc. and Expedia Inc.
Through Airbnb’s website and smartphone app, users can book tables at about 650 restaurants across the U.S., the company said on Wednesday. Diners could previously only use Airbnb to make reservations in a small test in San Francisco.
The new service makes Airbnb more like Priceline, which owns OpenTable, the leading U.S. restaurant reservation website and app. Airbnb declined to disclose its method for making money from the new booking tool. However, it’s designed in part to get users to engage with Airbnb more regularly. When people book a place to stay on the company’s main home-sharing service, they may also arrange dinner out during their trip.
After its launch in 2008, Airbnb became a favorite app for travelers looking for somewhere to stay. Now the startup is looking beyond lodging. Last year, it began selling unique travel experiences like cigar-rolling classes in Cuba. It also worked on a flight-booking tool and an itinerary-planning widget that gives personalized travel suggestions based on consumer behavior, preferences and location.
Airbnb used acquisitions and partnerships to speed up this expansion. Last year, Airbnb invested $13 million in restaurant-booking app maker Resy. On Wednesday, Resy will start handling reservations for Airbnb users through a tab called "Restaurants" in Airbnb’s apps and website. Airbnb declined to disclose its ownership stake in Resy or say if it has plans to buy the company outright.
"Integrating Resy bookings increases the value of Airbnb’s core product by making it a one stop shop for travel," said Arun Sundararajan, a professor at New York University. He expects Airbnb to pursue an initial public offering within the next 12 to 16 months, and said the startup needs new product categories, like dining, to maintain growth and justify its private market valuation of about $31 billion.