Expedia, Priceline Move in on Airbnb
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What change is prompting Expedia and Priceline to target Airbnb's short‑term rental market?
This is Your Money Matters from The Wall Street Journal. Welcome to Your Money Matters. I'm Charlie Turner in New York. Airbnb has seen its business for short-term home rentals explode, and a couple of online travel giants want a piece of the action. Okay, a big piece. Expedia and Priceline are the kings when it comes to online hotel bookings, but now the two companies are boosting their inventory of home rental options that can be booked similarly to a hotel with just a few clicks. Joining us from Los Angeles is Wall Street Journal reporter Chris Kirkham. Chris, Priceline and Expedia won a piece of what's called the private accommodation market. Isn't that right?
That's right. This is sort of an industry that, if you think about it, has really always existed. People have always, you know, rented out their homes or second homes kind of on a... ad hoc basis. But I think what they're really trying to do is bring this kind of industry basically into the mainstream and get it in front of basically anyone who's searching on the web for a place to stay when they're traveling. And so I think the idea is sort of the evolution of this home rental industry and sort of ways to wire it up and get sort of the booking ability to
How are Expedia and Priceline trying to make home rentals bookable like hotels?
just make it easier for customers to book these properties online. And so that's sort of basically what they're trying to do. And I think it's an interesting transition because I think you have a lot of different opinions from people who own these properties on sort of the pluses and minuses of, you know, being on sites like Airbnb or Expedia or Booking.com, which is Priceline's property, or Priceline's site that tends to focus on these rentals.
This private accommodation market, it's growing a lot faster than the hotel industry, isn't it?
At this point, it is, yeah. It has been growing since 2015 at a faster rate than the hotel industry. And the hotel industry, in terms of revenue, has been doing very well, too. So... So, yeah, it's definitely a sort of fast-growing segment of travel. And so I think as it's growing, you're really starting to see it sort of evolve from more of just sort of a mom-and-pop. Maybe you found their listing online and you called them to see if you could book. In this case now, I think one of the big things these online travel companies like Expedia and Priceline are trying to do are basically – make these properties so that they're essentially instantly bookable, which is sort of the big difference for a long time in this vacation rental industry and hotels.
You know, hotels for a long time, you've been able to essentially find the hotel, select the room you want, you see the rate, and then you book it, and then that's it.
Why is the private accommodation market growing faster than hotels since 2015?
You pay for it then, or maybe you pay a deposit and then pay for it later. With these home rental markets, historically, it's always sort of been a little more informal, a little more, you know, personal, frankly. I mean, the owners may want to talk to the people who are staying there, get a sense of, you know, if this is a family of four or is this a bachelor party that's going to rent their house out and trash it. That has sort of always been a characteristic of this home rental market. And I think now as there's this push to move more of these properties into being kind of a commodity like a hotel where you can instantly book it, It creates some challenges because I think a lot of owners are resistant to the idea that they would book their property sight unseen to someone that they don't know and maybe they don't have control over their actions.
It's an interesting time to be an owner of one of these properties.
I'm speaking with Chris Kirkham of The Wall Street Journal, and you're listening to Your Money Matters. Thanks for listening, everyone. Chris, Airbnb is still the leader in private accommodations. What exactly are Expedia and Priceline doing to try and cut into Airbnb's piece of the pie?
Expedia, in 2015, they purchased HomeAway, which was a company that had... It sort of evolved in a similar way to Airbnb, but it was less of a booking platform.
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Chapters
6 chapters
1
What change is prompting Expedia and Priceline to target Airbnb's short‑term rental market?
0:02–1:18
2
How are Expedia and Priceline trying to make home rentals bookable like hotels?
1:18–2:51
3
Why is the private accommodation market growing faster than hotels since 2015?
2:51–4:26
4
What operational challenges do owners face when listings become 'instant book'?
4:26–5:24
5
What specific moves have Expedia (HomeAway/VRBO) and Booking.com made to expand inventory?
5:24–6:21
6
Is Airbnb worried about competition and how might user loyalty affect the market?
6:21–6:58
Speakers
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