Gabrielle Lurie/Reuters
- Airbnb just hired aviation industry veteran Fred Reid to a newly-created role at the company: Global Head of Transportation.
- Reid was the founding CEO at Virgin America and joins Airbnb from his previous position at the president of Kitty Hawk’s air taxi venture.
- A brand expert said the hire signals Airbnb’s interest in building package deals to its consumers — a venture that’s likely to be successful.
Airbnb’s latest hire is in a role that didn’t exist before this year — global head of transportation.
Aviation industry veteran Fred Reid is filling the role, leaving his previous position at the president of Kitty Hawk’s Cora Aircraft Program, an air taxi venture. Before that, Reid was the founding CEO at Virgin America and the president of Bombardier’s Flexjet.
The hire might not register for folks who know of Airbnb as a marketplace for short-term rentals and hospitality experiences. Reid, instead, is positioned to help Airbnb’s next venture in the travel industry.
"Whether in the air or on the ground, there are tremendous opportunities to create products and forge partnerships with other companies that make travel easier and even fun," Reid said in an Airbnb statement. "Realizing those opportunities will take years and require constant experimentation, and I’m truly honored to have the chance to take on such an audacious challenge with this team."
In other words, Airbnb is likely going to start offering bundled travel packages.
Courtesy of Airbnb
Brand expert Dipanjan Chatterjee, vice president and principal analyst at Forrester, told Business Insider that it’s a deeply lucrative opportunity for Airbnb.
"This is a classic platform play where it is easy to expand the relationship with an existing customer and reap rich profits from the incremental revenue," Chatterjee said. "Transportation is very much within their realm, so it is no surprise to see them gear up for this."
He added, "The reason this will work well for Airbnb is because they have a strong emotional engagement with their customers who are likely to give the brand permission to flex, and who will likely have high rates of trial and, if Airbnb does it right, conversion."
Yuya Shino/Reuters
Airbnb CEO Brian Chesky, who is also a co-founder, said in the Airbnb statement that he isn’t looking to build "just another place on the Internet where you can buy a plane ticket," nor an Airbnb airline.
"We’re going to explore a broad range of ideas and partnerships that can make transportation better," Chesky said.
To analysts like Chatterjee, the Airbnb’s venture in bundled packages will be more successful than other travel websites’ in part because Airbnb has "strong emotional engagement with their customers." The same can’t necessarily be said for the dozens of fare aggregator websites online that push travel packages.
"There is significantly more equity in the Airbnb brand, and it will translate into heightened permission for brand extensions," Chatterjee said. "They’re just getting ready to cash in the equity."
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Source: Business Insider