SAN FRANCISCO (Reuters) – Airbnb is rolling out new services aimed at attracting travelers looking for luxury accommodations and traditional hotels, the latest move to contend with sputtering growth in its original home-renting business.

The company on Thursday will unveil a new product that bundles Airbnb’s poshest properties with high-end travel services, as well as a separate category of homes guaranteed to be clean and comfortable. Airbnb will also make it easier for boutique hotels and bed-and-breakfasts — once its arch enemies — to list their rooms on its online booking site.

The company is billing the effort as a way to win over travelers who have shied away from the risks and quirks that are part of renting a stranger’s apartment.

But it is also an acknowledgement that its core business has hit roadblocks around the world. Regulators in key cities such as Berlin, London, New York and even its hometown of San Francisco have cracked down on short-term rentals, blaming Airbnb for exacerbating already tight housing markets. The company has been forced to slash its listings in certain popular cities as part of its concessions to regulators.

Airbnb has compensated by adding services such as restaurant reservations and guided trips of local sights, part of a roster of offerings the company is betting will someday generate more revenue than it earns from renting homes.

Thursday’s event in San Francisco builds on this effort, with Airbnb Chief Executive Brian Chesky set to announce changes that put the company in closer competition with the likes of Expedia Inc EXPE.O.

Planned moves include a new way of categorizing listings. Airbnb will specify whether the property is a home, bed-and-breakfast, hotel or something more eccentric, like a houseboat or yurt. And it will give guidance on the best properties for certain types of travelers, such as whether a house is most appropriate for families, newlyweds or colleagues on a work retreat, according to an Airbnb spokesman, who spoke with Reuters prior to the Thursday event.

Another new category is made up of homes that Airbnb has inspected for quality and cleanliness. Landlords will be able to charge a premium for those properties, enabling Airbnb to earn more too. Airbnb charges fees of up to 15 percent for guests and about 3 percent for hosts on the price of each rental.

There is a sense of urgency for Airbnb to get it right. The privately held company is valued at $31 billion and needs a predictable business with steady growth to hold a successful initial public offering, expected in 2019.

FILE PHOTO: A woman talks on the phone at the Airbnb office headquarters in the SOMA district of San Francisco, California, U.S., August 2, 2016. REUTERS/Gabrielle Lurie/File Photo

“Airbnb (is) figuring out how do we grow at the same levels that investors are expecting us to grow, given some of the regulatory headwinds,” said Christopher Anderson, a professor at Cornell University’s School of Hotel Administration. “That comes down to more breadth of inventory.”

Airbnb, which does not release its financial data, said last year it had achieved its first full year of profitability. The company continues to increase its number of listings and visitors, but growth has slowed.

Since its launch in 2009, the company at least doubled the number of bookings for its properties every year until 2017, when bookings grew by 62.5 percent to 130 million guests. The slowdown is due in part to the company’s larger size as well as the harsher regulatory climate.


In San Francisco, for example, which passed a 90-night limit on rentals and issued licensing requirements, the number of short-term rentals fell to 3,500 in January from more than 8,500 in August, according to government figures.

Several European cities have cracked down too. In Berlin, 3,953 homes were removed last year from vacation rental listings, a government report shows, although it was not clear how many of those were specific to Airbnb. Available Airbnb listings for Paris stood at 35,825 last month, down from 40,484 in January 2017, according to market tracker AirDNA. Tougher rules in Amsterdam have caused Airbnb listings to stabilize at around 18,000, a city official said. Those numbers could fall further when new restrictions capping Amsterdam home shares at 30 days go into effect next year.

Airbnb continues to expand outside of traditional city centers, and its new offerings will appeal to more diverse users and changing travel patterns, according to Chris Lehane, head of global policy for Airbnb.

Founded as a way for homeowners to make a bit of cash renting spare rooms to penny pinchers, Airbnb now operates in 191 countries.

“It’s just a very different business that existed in 2009 when Airbnb was primarily in the U.S. and in urban markets,” Lehane said.

The company sees particular promise in hotel listings. There are currently 24,000 hotel rooms already listed on Airbnb, up 520 percent from a year ago. While big chains are not likely to be on the site anytime soon, Airbnb is eager to attract more small, independent hotels to lure travelers who want predictable accommodations.

Henry Harteveldt, founder of travel industry research firm Atmosphere Research, said it is a recognition that Airbnb and hotels, seemingly at odds, might actually help each other’s business.

“That is the lion laying down with the lamb,” Harteveldt said. “Airbnb may become a bona fide online travel agency just like Priceline.”

But whether Airbnb can succeed in that segment remains to be seen. There is a slew of competition, from giants like Expedia, which owns Airbnb competitor HomeAway, to luxury home booking company onefinestay, which is backed by a large European hotel group.

The company also risks alienating homeowners, who were the first to use Airbnb and are among its fiercest advocates.

Airbnb host Stephen Barefoot is a bit wary of the company’s growth plans. Partially retired, Barefoot rents out a floor of his home in Durham, North Carolina, to supplement his income. He enjoys the personal connections with guests and wonders if that could change.

“It just loses it a little bit when I think about it in the same terms as Expedia,” he said.

Reporting by Heather Somerville in San Francisco. Additional reporting by Tina Bellon in New York, Dominique Vidalon in Paris and Toby Sterling in Amsterdam.; Editing by Marla Dickerson.


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