AirBnB Finds Hotels, Now It Has a Stronger Business Model in Nigeria

AirBnB Finds Hotels, Now It Has a Stronger Business Model in Nigeria

AirBnB has done what many expected: add hotel reservations at scale. Yes, renting parlors and tree-homes will not do it, for a long time, because many people especially in trust-challenged developing world will not sign-up in droves. So, it is a beauty that AirBnB is now going to offer hotel reservations.

The $31 billion home-sharing site said today (March 7) it had signed a deal to acquire HotelTonight, a curated booking site for boutique and independent hotels. The companies will operate as separate brands for now, while over time it will add select boutique HotelTonight rooms to the Airbnb platform.

The deal price was not disclosed. HotelTonight’s fundraising round in 2017 valued the company at about $460 million.

The acquisition follows Airbnb’s efforts to add more professional and curated listings—more hotel-like, you might say—to its site ahead of a rumored initial public offering. In January, Airbnb said the number of rooms available on its site that hosts classified as hotels, bed and breakfasts, hostels, or resorts increased 152% over the previous year, though it didn’t provide the underlying numbers on that inventory.

This new strategy will help AirBnB grow in Nigeria where I have noted that the company is struggling. Unfortunately, the implication is that Hotels.ng and Jumia Travels will now be on the crosshairs of AirBnB. As that happens, customers win via competition in the sector.

The root of this issue is Nigeria, and it is a big problem that is evident to most entrepreneurs, depending on the business sector. Because of the low level of trust, especially in digital business, Nigerians like “cash and carry” transactions, where that cash now includes digital payments.In essence, we want to spend money on something and get the gratification immediately. Or better, we want to inspect before we pay.

AirBnB has hotel-booking business now

All Together

The commodification of trust is an industry challenge in Nigeria. That is the weakest link of AirBnB business. But with hotel chains, people will feel safer. The fact is this: paying for a stranger’s living room, just because you saw it online is not what many Nigerians are open to. But paying for a hotel is assumed to be less risky because the hotel is there unlike a home. Uber does not have this issue because the service is offered before payment is made to the Uber system. In AirBnB, the reservation is done before the service is done, creating a new layer, that requires deepening of trust first. With a hotel booking site, AirBnB opens a new dimension in its business which will be promising in Nigeria.

Why Airbnb Struggles In Nigeria

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