Airbnb Is Building a Wallet. The Distribution Game Just Changed.

0:00Brandreth Canaley: ZS is a global consulting and technology firm that partners with companies to improve life and how we live it. Working with the world's top hospitality brands, ZS brings together data, science, technology, and human ingenuity to transform ideas into customer loyalty. They're ready to help you elevate guest experiences, improve operations, and uncover preferences and motivations through their AI-powered solutions. With more than 1 ,700 clients in over 170 countries, ZS has built the expertise, fortitude, and vision to help you deliver impact right where it matters.

1:01Brandreth Canaley: Good morning.

1:03Michael Goldin: Happy Monday. All right. Good Monday. Jamie and I are matching. We look, we're in the same vibe today. Kids are back to school this week. First day of school vibe. Yeah. Ours starts later this week, but at least we're kicking it off. Well, my youngest started his first day of kindergarten today. So it was a big family milestone. I can't promise there weren't any tears, but it was cute. We won't ask who the tears came from. He did really good. Good. Lots of pay raise too. Congrats. Oh my goodness. No more daycare. Thank goodness. Yeah. Yeah.

1:51Brandreth Canaley: What did you do this weekend, Michael?

1:54Michael Goldin: Oh man. Good question. Same old, same old. I think nothing wild. It's dadder day. Got the dads and the boys together and let them run wild. Um, I feel like we did something fun, but I guess it wasn't that fun. What about you? You cooked for 3000 people.

2:12Brandreth Canaley: Oh my God. Yeah. We had our big family reunion, our 175th anniversary and my cousin and I and And my immediate family basically cooked for, we didn't basically, we did cook for 300 people. And the biggest group I'd ever cooked for before was 60. And we're off the grid in the middle of the wilderness. So we had a refrigerated trailer, everything's running on generators. And just the sheer volume of chopping, I knew it was going to be a lot of work, but I wasn't really, as I was in it, I'm like, this is so much work. I'm so tired.

2:48Michael Goldin: What do you cook on just like lots of open fires?

2:52Brandreth Canaley: So we did all, I made the menus, all the sides could be things that were like assemble and then cool. So like pasta salad, potato salad, like cowboy coleslaw, that kind of thing. And then we did two kahachinas, which are like roasting boxes full of pork shoulder and pork pork butt and then chicken thighs and hot dogs on the grill. And then had all of my extended family members. We did like dessert potluck. So every home and every family like brought a dessert to share. And we had a band and two DJs and kegs and we got a family photo. So there's 300 of us in this photo. It's pretty crazy.

3:31Michael Goldin: So is the band all family members?

3:35Brandreth Canaley: No, the band is not family members. they were hired. And then the DJs, one is my good friend, Dan, and another is a good friend of my cousin named Sam and they're professional DJs. And they did us a huge favor and came in and threw a party for us.

3:49Michael Goldin: Rocked out at a family reunion.

3:52Brandreth Canaley: Yeah. They were like, this is a lot of people. And it was just so fun. It's really great. A lot of times because family members share homes up here, share camps. So people are staggered throughout the summer, throughout the year. This is one of the times when everybody finds a way to kind of like fit. And so it's great. I spent time with family members I hadn't seen in a decade or something. It was really, really nice. But yeah, my immediate family got roped in because I volunteered to do it. So we boiled like 100 pounds of pasta, 100 pounds of potatoes. I mean, it was just really like astonishing quantities.

4:29Michael Goldin: On what surfaces?

4:30Brandreth Canaley: we got two huge um like crayfish boil or crawfish boil pots and we're doing those and then

4:38Michael Goldin: um yeah so that was it one or two out of a southern tailgate all right yes exactly exactly

4:47Brandreth Canaley: lots of new orleans yes yes exactly so yeah very fun um you know a very a showcase of like i think when a lot of our listeners are obviously very good at being hosts and have hospitality in their nature. And you can see like I had some cousins that were like, I don't even know how you are possibly doing this. And it was so much fun. I really enjoyed it. But I think for our 200th, I think we should fundraise for caterers. Yeah, that's my that's my vote.

5:21Brandreth Canaley: Well, before we hop into our stories for today, I want to give a shout out to our sponsors at StayFi. StayFi helps short-term rental operators build direct guest relationships through brand email marketing and guest data tools that turn one-time bookers into repeat guests. So start growing your direct booking revenue today at stayfi.com slash good morning hospitality. So first up, our favorite recently, Airbnb doing fun things. Skiff put out a great article about Airbnb's next act, getting into tickets, which is a branch off of experiences, we would say, and then perhaps parlaying into a wallet, similar to how Starbucks has a customer wallet.

6:06Brandreth Canaley: So I want to get you - Let's table the wallet discussion.

6:10Michael Goldin: I said, let's table the wallet discussion. Yes, yes. Let's start with tickets.

6:14Brandreth Canaley: Start with tickets. I think this makes a lot of sense, but go ahead, Michael.

6:18Michael Goldin: Airbnb is the king or queen or whatever at PR. And they find their way into the news cycle all the time. And bringing in people to build a ticketing platform, it's another week. It's another type of vertical that Airbnb is trying to push into or expand into, becoming more and more and more like a traditional OTA. So I think we, at this point, can confidently say they're running full steam ahead at becoming a full-blown OTA. But it looks like they're, and we'll get into the wallet component later, but we'll see how it plays out. Doing this many things at once, I think, is going to be a big lift for them.

7:09Brandreth Canaley: Yeah, that's kind of my thought. I'm sorry, go ahead, Jamie. So I think this feeds exactly out of what they talked about in May at their product launch. Like they had really with experience pushed into what are the special experiences you can do on trips to three, four into a market. And then what they realize is that the things that really do well are first time trip into a market. And a lot of those are tickets to the museum, tickets to the church. church. If you're going to Spain, you're going to Gallaudet, you're going to Zagada Familia, you're doing the things that you do on the first trip.

7:47And it's not necessarily you want this specialized tour with someone where you're going to go deep. You want to hit the highlights. And a lot of the highlights are just getting the tickets to the things you want to go to. So I really love this in terms of their strategy of like, how do we become an experiences OTA? and a lot of what you're buying on Viator, a lot of what you're buying on Get Your Guide are just tickets to things that already exist. And it is a lot of work to your point, Michael. I'm getting into the reservation systems and channel management for experiences, but that's what they arguably should have done in 2016 when they first launched experiences, get into this ecosystem and then build out the customized stuff that really makes you unique.

8:38Brandreth Canaley: Well, I was thinking about when I heard tickets, I obviously like the museum tickets and things like that, but I was like thinking concert and sporting tickets. And, you know, there's been a lot of lawsuits and things like that with Ticketmaster and Live Nation, and they're basically like stranglehold on at least the American kind of ticket market. And so I'm wondering if because that's kind of getting broken up a little bit, or at least there is movement to do that. If now that's one of the reasons why they're going to push full into this, because I actually think I can see, okay, Taylor Swift probably isn't doing another heirs tour, but let's imagine she is.

9:15Brandreth Canaley: And, um, and you're like, okay, yeah, I really hope she does. Um, but then if you can just like buy all of that together, like your Airbnb for the, for, for the girl squad that's going or for the dads taking all their daughters and their friends then and you do all of that in one spot, I think that that could make a lot of sense. I mean, those are especially if you're traveling for a soccer game or a football game or whatever it is.

9:41Michael Goldin: Yeah, I mean, Vitor is a really big and valuable business. And I would venture to guess maybe Jamie has the data, but I'd venture to guess the big tourist attractions are the vast majority of their revenue, the Vatican, the Louvre, the Met, et cetera. And I would be inclined to just click, yes, add four tickets to the Louvre if I'm booking a place in Paris. So it makes total sense. It just runs in the face of what Airbnb has always said they are, which is that individual, that special, that local experience, which is totally fine. This is a maturation step to becoming an OTA and not just a live like a local.

10:25Michael Goldin: But branding, I think they've got to figure out how to thread the needle with the branding that they built through the years that was so, so good and so dedicated to like individual host welcomes family for a wonderful stay. And now it's professionalizing to eventually stay in a Marriott and go stay at the Louvre.

10:47Brandreth Canaley: Yeah, well, they're after that sweet, sweet Tam, You know, I also think that they're pushing out of like what we built the platform with like local is a relatively small piece of the overall traveling public. The platform has moved mainstream and they and Brian said on the earnings calls, like there's a different type of trip for a different type of person based on what the use case of that trip is. like when we were just in Iceland, like we weren't booking concert tickets with the family. We're booking tickets to the museum. And, and like it is, yeah, I think I love how they are as part of going more mainstream, moving outside of what they originally were to make themselves a more inclusive platform for the types of trips that are happening.

11:43Brandreth Canaley: so now on to the second component of this article the wallet which is it's more fun so i i you know pre-show we were chatting a bit about this and the comparison in the article is to starbucks that has like over a billion dollars or something like that in customer money just sitting on there that they're making interest on that they're recognizing revenue on all this stuff and my point was like starbucks is coffee that's something that you're consuming potentially every day, potentially multiple times a day. And so you're in that app, you're adding 50 bucks to it, you're, you know, whatever. And that it might be more difficult, you know, these purchases, even if it's an experience that you're doing semi regularly, I don't, I don't see people using that wallet as much.

12:28Brandreth Canaley: But Jamie, you had some good counterpoints this from personal experience. Yeah. And I have been trying to use the loyal, and they don't have a, Airbnb doesn't have a loyalty program, but I've been booking more and more hotels through Hotel Tonight, whether it's personal or travel. And then you do start to build up credits that then be used towards future stays. They get auto applied, but you do already start to see the sense of like, okay, the more and more stuff I start to book through Airbnb that are, uh, and then accrue loyalty points or loyalty dollars as they are in the, uh, form today. Like you're not getting points.

13:11You're getting, like, I've got$53 in my account to spend. Uh, and it, it, and you guys know how like you build money and it's like, Oh, this is burning a hole in my wallet. You build points. So like, I don't know what a point is, uh, but$53 to go and spend on something. Like, what am I going to spend it on. So I do see, and the article talks about that this could be and will be the basis for future sort of financial transactions that they could be enabling through the platform. So I go and book a hotel. I'm going to come up to New York in a bit. And now I've got$100 that, okay, maybe I do want to go spend it on a concert and go to who's touring right now, Mumford and Sons.

14:00Like I, I, I, all of a sudden I'm mixing a local experience with a trip on booked for work and, and work's now paying for me to go on a concert.

14:13Brandreth Canaley: Yeah. I, I'm, I think I, on a personal note, I need to start kind of following your lead and booking. I I've admittedly, I think I've used hotel tonight like once so i i thought it's a great platform i like it you know um but it'll be i i always wonder when we're in our travel bubble of people who are so in touch with what's going on like if what you're doing and how you're using the product is going to really spread to the consumers at large because i feel like right now there are so many different platforms like this that are trying to get your attention. Like if you're a Chase Sapphire Reserve person or an MX Platinum and like, where do you dedicate your spending and your travel?

14:57Brandreth Canaley: And, you know, I just, it'll be, everybody's kind of competing for the same type of person. And that's what I think is really interesting and who's going to win and what are the different travel behaviors for each of those different types of people?

15:10Michael Goldin: Well, the why you do it is clear. I just did a quick chat GPT search. The SkyMiles platform that Delta owns is worth, according to GPT, an estimated$30 billion. Marriott's platform is worth just shy of that estimated$25 billion. Now, if that's completely wrong, blame chat GPT, but it sounds like it's probably pretty right. and that's why Airbnb is doing it. Now, the difference is Delta is selling direct. Marriott is selling direct. I don't know if there's a third party loyalty system that's as valuable outside of the credit card points. I'd imagine the MX points or the Chase or Capital One points are extremely valuable, but this is why they're doing it because they can, one, sit on a bunch of cash to drive bookings from Jamie's work travel to his leisure travel.

16:11Michael Goldin: And it's a smart play. I think those that will benefit most will be the short-term rental hosts and owners on Airbnb's platform. Those that stand to gain the least would be the hotels on the platform that people are just earning points off of and not actually burning more points through.

16:32Brandreth Canaley: Yeah, well, some of these things are just in their infancy. They've, they're hiring for these positions. So I'm sure in six months or however long it'll take to get things for the next article to come out, we'll see, you'll see what happens. But speaking of OTAs, Expedia just bought an AI trip planner, Layla, and for, you know, adding to their continuing AI, you know, plans. And Layla is going to continue to operate on its own and then they're folding it into Expedia over time. And pre-show, Jamie did his own planning. So Jamie, how did the experience go with Layla this morning? So, and I, you guys know, I've loved playing with a lot of these AI trip planners.

17:20So, and I admittedly, it's, I don't think it's too different from Odessia, which we saw Francis this rollout earlier this year, like it's really leveraging the LLM models to go out, find and build an itinerary, find lodging inventory, put together the flights, put together the experiences, the things that you're going to be doing while you're on that trip. And I think they do an incredible job of laying out your entire trip pretty quickly and then making it relatively easy to book. um um and there was definitely like some bugs in it like i was going through like i know it's going pretty broad in the area i was going and it gave me one lodging option when i clicked uh and then when it went and built my itinerary it had me in like entirely different places uh so like but and what it does is i think it gives them a sandbox to be testing on what ai trip planning might be that doesn't have to live within the Expedia platform and whether it's Expedia, Vrbo, Hotels.com, where it's exposing billions of people and their existing flows to experimenting on what this next phase is going to look like.

18:43So keeping it separate, bridging in the Expedia inventory, and they've got the best B2B platform probably out there for bringing in all the different lodging experiences, cars, all that into it. And just like if you had the inventory, you had the great developers that maybe Layla has, like what could be built and doing it where Expedia can capture that value as opposed to letting someone figure it out and having to buy it later on once they actually did. Yeah.

19:16Brandreth Canaley: I have a quick question before you hop in there, Michael. um so what i like we talked about a couple weeks ago what is the difference between doing this and i i agree with yours like with your statement that expedia is playing in the sandbox and keeping it separate now and then i think integrating into expedia later on and having that workflow that makes a lot of sense when like white right now in the state that we're in why would you go to one of these travel planners instead of just typing in to Claude or ChatGPT or anything like that? If they're just using, if they're leveraging the LLMs, why would you even do that?

19:56Michael Goldin: One reason, a prettier interface. I'll push back on that one. A, I think if you can start with the premise of your trip, like what is your ultimate goal? And then I think what everyone wants to get to is a one-clip bot. quick buy of like, I want to buy this and I want to have it complete my air travel, my rental car, my Vrbo stay, like have all of that happen with like you do the one prompt app that people want to build. I want the one prompt trip that I can say, here's what I want to do now just go and book it. And right now, no one really has the integrations built that they can do that. And I think that's where Layla and working with Expedia and having now Expedia own it, like they've got the inventory, they've got the information maybe already in your one key platform, like all the information about you, marry that data and with their AI developers and be able to bring that all in like that they could sort of one shot the trip planning.

21:11And I think that's the holy grail here.

21:13Michael Goldin: Well, I want to go back to why I think Expedia bought Layla and it's less as a sandbox, but it was my total guess as to why is they were driving some traffic in the B2B realm and Layla was going to die otherwise. So they just kept it alive to keep driving some bookings. I did a little test before the show as well. I asked for a fun family trip within driving distance from Auburn, Alabama. It said Gatlinburg is a great option. I said, okay. It flipped me to a different page. And then I said, keep the budget under a certain amount. And then it sent me to New Orleans. So the tech, it doesn't seem good.

22:01Michael Goldin: It's not. What do you have against New Orleans? I love New Orleans. But if Layla knew me, it would know my brother lives in New Orleans and I wouldn't look for a place to stay there. So to Brandy's point, I would just search in ChatGPT or in Gemini, Google, which we'll get to in just a second. But my guess is Expedia just didn't want to shut down a channel And so they just kept it alive. And it's just, you know, obviously not, not for the tech, they might be buying it for the data that Layla's comprised over the past, however many years, three years. But I, I can't imagine, um, they didn't disclose the value.

22:44Michael Goldin: So I can't imagine it was a big payday for anybody.

22:48Brandreth Canaley: Yeah, that was my, my, I was like, how much did they pay for this. And it says, you know, 135 million trips planned. But like, does your trip that you just did count as one of those? Like how many accurate trips have been planned? Right. I saw another number where it was like a billion dollars in trips planned. And it's like, but how many of those actually get booked? A lot of people play with things like this. I saw some rumors that this was more of an accu hire. Like they wanted to bring on the team. They want to keep this team and sort of building, developing separately, keep them in San Francisco, let it be in sort of skunkworks type of project.

23:27Like that makes sense to me with a big company like Expedia where they launched, what was it, Romy last year or two years ago where it was like their AI trip planning tool.

23:36Brandreth Canaley: Should have sued them for copyright infringement. Yeah. Gotten paid that way. We didn't see that do much or go, and I'm not even sure if that's still running, But yeah, it's always fun for these big companies to have a way to experiment. Well, we have another company experimenting with AI. I mean, it's just like I wish that there was some other company coming in because we're just the companies in our space that are doing the most right now are obviously all the same big ones over and over because they have all the money to do it. So but Google's AI pivot is using travel to kind of sell the story.

24:15Brandreth Canaley: And that makes a lot of sense. It's, I mean, at least especially to us, because we've been talking about how travel, it's a great way to use AI right now, these LLMs, because you're giving so much detail to these prompts. We have, excuse me, IHG is now directly integrating with Google. And so you'll be able to see those search results pop up in like that AI overview. So it's the first of the big flags, but not the last.

24:42Michael Goldin: Yeah, so Booking and Expedia have already done some levels of integrations with Google, and IHG has done it too. It just means that the big boys are leaning into this in a big way, which says, and it should put all of us longer tail folks on watch, that it's happening, it's happening fast. the ads that booking or sorry that google has had over the past quarter it was quarterly number right uh was up 17 so ads on google have not dropped at all it didn't show how much we're through ai mode or how much we're just traditional but people are trying to spend more and more on google because search is now harder and harder uh it's being dispersed in more places than just Google.

25:38Michael Goldin: So this is a fascinating spot. Where people start their searches is changing, which is, I think, good for all of us. More competition is better. Google dominated and owned it. Two of its top five spenders historically on Google Ads were booking an Expedia. So of course, this makes total sense that they're going to lean into it. I'm curious to see how the long tail reacts, how the independent hotels or short-term rental operators, Jamie smiles, because I think this is a chance for the long tail to gain market share back. But if they're asleep at the wheel, then the OTAs will absolutely dominate.

26:25Yeah. And I see this clearly playing into my thesis of like the OTAs, the big chains are going to be able to work with the large platforms, whether it's Google, ChatGPT, Anthropics of the world. Like they've got the ad dollars to deploy. They've been deploying them. Like these platforms need to make money. Travel is what's supported them for decades.

26:56and it's exciting to see the direct plays happening, right? If anyone was going to figure it out direct, it was going to be the IHGs, the Marriottes, the Hiltons. It's just, can the independents work with these large companies in the same way that some of these large brands and OTAs can to drive traffic to their sites? And I think that's still really yet to be seen. And if it didn't happen in a big way in our old paradigm, I'm not necessarily sure it's going to happen in the new one.

27:36Brandreth Canaley: I really, really could have used you at the STR retreat because that was my side of the debate and we didn't get most of the group on our side.

27:45Michael Goldin: Well, and the reason here, I think that the long tail does have a chance is because search is so deep and Brandy has more information on her homes than she gives to Airbnb or Expedia or booking. And the article shares that the long tail advertising is getting better and better and people are converting more and more because it gets so specific. Historically, people aren't searching in long form. They search in keywords. But as people shift to the long tail, it gives you the opportunity to present the long tail and convert that ad versus not being in the top one or two that Expedia and booking on.

28:31Maybe I spend too much time looking at the long tail is doing. They're not even filling out Airbnb and Vrbo listing pages, much less having more time than what they're putting in there.

28:42Brandreth Canaley: Well, I mean, on the on like the positive optimistic side for operators, I do think that to Michael's point, those who are like trying to be on top of things, who are interested in experimenting, who are trying to at least figure out ways that we can like step on this rocket ship that is happening. there might be some opportunity now, you know, and it's, I totally, I mean, there's people who still refuse to list on certain OTAs because of feelings, right? Like it's, they're not going to be the first ones to jump on figuring out how to get their properties read on, you know, by Claude, right? But those that do might stand a chance.

29:24Brandreth Canaley: And then maybe if people start to see success stories, that's how you can build, or maybe the OTAs will come in and totally squash everyone. I mean, I think that just remains to be seen. Or maybe there's a third option where there's a new, like the OTAs will be so confident that they have dominance, that there's a third, there's new OTAs maybe that come in. I don't know. There's, I think that there's so much happening right now that predictions just seem like I never would have predicted some of the things that we're talking about right now, you know, a couple of years ago. So it's, I don't know, it'll be interesting.

29:59Michael Goldin: Well, I'd love the audience to weigh in on, are you in camp OTAs will dominate everything or camp now's your chance for the long tail to make an impact?

30:11Brandreth Canaley: Yeah, a good audience poll will be good. So comment in the episode. Maybe we'll send out a poll at some point on the LinkedIn page and get people's opinions. See who gets spicy in the comments. People feel very passionate about this. I did reach out to your buddy, Jason at Kismet. So he's going to come on the SDR Data Lab and I'm going to give him a chance to convince me otherwise since I missed when you guys had him on on GMH.

30:39Michael Goldin: That's going to be a can't miss episode.

30:41Brandreth Canaley: Yeah, for sure. For sure. Well, great episode today, guys. I'm happy that your kids are either in school or about to go back to school and you can maybe have some more time to yourself. What do you guys have going on this week?

30:58nothing uh man i guiding the kids off to school was my only goal for the week and that's been complete but uh i'm yeah getting back into the day-to-day grind my wife is out of town uh this weekend coming up friday through monday so i've got the long time with the kids and we're gonna plan all sorts of fun goodies uh to keep everyone busy and entertained nice And probably after a long week of not enough sleep and stress of going back to school. So it should be good. Yeah.

31:36Michael Goldin: For some reason, school doesn't start until Friday. It's very weird how they do it down here. So getting through this week and then getting back to a normal schedule and swing of things next week. So survival. That's survival.

31:52Brandreth Canaley: I love that. any more travels where you headed gosh guys my week three of b2b work travel tomorrow i'm waking up at two in the morning to drive to the albany airport for a flight to steamboat springs colorado so um that's what i'm doing all right you'll be there by uh by 8 a.m yeah well i have to drive three and a half hours to albany and then get on my flight at least have direct or into steamboat or do you have to fly into denver and drive i was really happy that albany to denver existed that did not exist a couple years ago so i thought i was gonna have three flights but i only have two and the denver to steamboat flight is like it's like 30 seconds it's so so short so um that's fine it's just thursday on the way back like going west coast east coast just destroys your whole day like west coast is the worst isn't that.

32:50Brandreth Canaley: Well, I hope you guys, I'm sending positive vibes to both of you for your different stages of back to school and survival. Thanks to everyone who commented on the live show. Really love having that kind of audience participation. And thank you to all of you who are listening on the downloads later on. We will see you all next week.

33:18Thank you.

33:52Brandreth Canaley: ZS is a global consulting and technology firm that partners with companies to improve life and how we live it. Working with the world's top hospitality brands, ZS brings together data, science, technology, and human ingenuity to transform ideas into customer loyalty. They're ready to help you elevate guest experiences, improve operations, and uncover preferences and motivations through their AI-powered solutions. With more than 1 ,700 clients in over 170 countries, ZS has built the expertise, fortitude, and vision to help you deliver impact right where it matters.