Bilanz Le Bijou - The Hotel REINVENTED
6. July 2017

Airbnb 2.0 – Bilanz about Le Bijou

The maisonette at the Zürcher Münsterhof offers on 180 square meters more than most hotels: a maxibar instead of a minibar, a modern kitchen, sound system in all rooms, two fireplaces, a 24-hour concierge service.

Airbnb 2.0 – Bilanz about Le Bijou

Apple founder Steve Wozniak stayed here, Jordan Belfort alias “The Wolf of Wall Street” as well, Eva Longoria posted photos on Instagram. A sauna room in the attic, on the terrace a whirlpool, there is even a scenting system with a specially mixed smell. “We are very particular about this” says Madeleine Fallegger. In their company Le Bijou, she and her partner Alexander Hübner rent 35 such luxury apartments in Zurich, Berne, Zug, Lucerne and Basel to tourists and business travelers.

The occupancy rate is 92 percent. “It’s going very well for us,” says Hübner. “Last year, we grew by 400 percent, this year it is expected to be as much again.” Le Bijou will make a turnover of around ten million Swiss francs. The company has 40 employees: They design and decorate the furniture, clean the accommodations, program the app to control the lights in the apartments, to order food or to book an excursion.

Le Bijou has become big thanks to Airbnb. Without the internet booking platform “we would not have done it,” says Hübner. “Airbnb has awakened the awareness among the people that you can stay in a private accommodation instead of staying in a hotel. This helped us a lot.” 26,000 accommodations can currently be booked with Airbnb in Switzerland, from a sofa in the living room for CHF 79 per night to the apartment at the Münsterhof for a maximum of 3800 francs. Business is booming. “In 2016, we recorded almost 450,000 guest arrivals in Switzerland, 80 percent more than during the year before,” says Alexander Schwarz, CEO of Airbnb for Switzerland, Austria and Germany. More than one million trips were booked out from Switzerland with Airbnb. Around 80 million travelers worldwide used the platform last year. That all adds up: the company is expected to implement $ 2.8 billion this year and $ 8.5 billion are expected for the year 2020. Because Airbnb is growing faster than the competition, such as the Swiss HouseTrip, the German Wimdu or 9flats, those have no chance. The provision of accommodation is a “winner takes it all”-market.

So HouseTrip, once celebrated as the most hopeful Swiss start-up, last year was swallowed by TripAdvisor. And in the nine years since the company’s foundation, Airbnb has become the world’s fourth-largest start-up: the company based in San Francisco is currently valued at $ 31 billion.

The Travel Corporation

This, of course, is not enough for the founders. They already work on Airbnb 2.0. The accommodation platform has to bei transfomed into no less than a full-featured travel corporation. “Airbnb is becoming a platform for the entire travel experience, from the start of the journey until the return home” says Schwarz. The global accommodation market is worth $ 700 billion annually. An important part of it are business travelers. At Airbnb so far they figure ten percent of the overnight stays. Now they are actively courted.

Under the “Business Travel Ready” label, the platform features those accommodations seperately that specifically meet the needs of business customers: 24-hour check-in, Wi-Fi, or an iron to get the crumpled jacket back in shape. “The Swiss market is particularly important because many large corporations and international company-headquarters are located there,” says Schwarz. Worldwide, 250,000 companies already book accommodation for their employees through Airbnb.

In order to increase this number, Aibnb has partnered with American Express and BCD Travel. It is even compatible with the travel cost accounting system Concur, since the takeover by SAP a standard-solution at many large corporations. The travel managers of the companies are accordingly trained by Airbnb. “The acceptance is very good, we expect this area to grow in proportion to our overall growth,” says Schwarz. And he has noticed that the business travelers thanks to Airbnb are staying longer on the spot, four and a half days instead of two days. “Many of them prolong their stay privately for a couple of days.”

The perpetual start-up is also pushing forward into the adventure sector. The activities that can be booked on the platform are called “Discoveries” . The selection already includes more than 1000 offers: from practice lessons with a ballerina in San Francisco, a pub crawl through the jazz clubs of London and a sushi workshop in Tokyo through to a conversation with Nelson Mandela’s former prison guard in Cape Town. “We want to enable the traveler to delve into a city instead of just watching,” Schwarz says. Airbnb checks the quality of the tours, insures the participants and keeps a 20 percent commission.

On discovery tour

This way the company is entering the market of additional travel services, where also the Swiss start-up GetYourGuide is successful. “This develops very positively” says Schwarz, “over 90 per cent of the discoveries are rated by the travelers with five stars.” Airbnb is planning to offer adventures this year in 51 cities, while Berlin will be the first city in Europe. Schwarz can´t say when Switzerland will have a turn, “If there´ll be enough offers from hosts in a Swiss city, we will surely look at it.”

The new function «places» on the Airbnb platform is a similar option: insider tips of the locals away from mass tourism. In addition there are audio guides and the opportunity to meet other travelers who are in the same city at the same time. Also at this there is no specific time schedule for a launch in Switzerland. “We will peer at this with several Swiss tourist agents,” says Schwarz.

All the features have in common that they can be booked with the Airbnb app. Jasmina Salihovic, the largest Swiss Airbnb host thinks that´s great: “I have to explain anyway to people what is worth doing or where to go. Now everything works on the platform, you can involve more locals, and it’s much clearer who is doing what and who is responsible for what.” She calls the new offers the “uberisation of all areas of tourism “: like private persons offer their car for a ride to others on Uber, the hosts at Airbnb now share their passion and knowledge with the travelers and get an extra income.

But the plans of Airbnb boss Brian Chesky go much further. Thus he promises services such as the booking of rental cars or the delivery of fresh food to the holiday destination. Airbnb also is planning to offer flights, “but not until we know exactly how to stand out from other platforms on which you can already book flights today” says co-founder Nathan Blecharczyk. “The current booking process isn´t a positive travel experience, you can do better,” says Schwarz. When and how exactly, however, is not decided yet. The new offerings are being concocted in an innovation and design laboratory named Samara. “We want to improve everything that affects the travel experience.”

„The focus is the exchange between people, “Schwarz describes the goal. The mission of Samara goes beyond the core business: One of the first projects was the development of a community center for a small Japanese town. One reason for the new activities of Airbnb is that the previous business model is slowly reaching its limits.

The concept was created in 2007, according to the founding myth, when Brian Chesky and Joe Gebbia could no longer afford the rent their apartment in San Francisco and came up with the idea of renting an inflatable mattress in the living room as Bed and Breakfast. The first website Airbedandbreakfast.com, programmed by Chesky’s student colleague Nathan Blecharczyk, started in August 2008. A design trade show during which the hotels were booked in San Francisco brought the first customers.

Since then, Airbnb has been staged together with Uber as a spearhead of the Sharing Economy, in which „sharing“ will be the new „owning“. But with the increasing professionalisation on Airbnb, the idea of the Sharing Economy remains less and less important. “The myth is not true, people like you and I would occasionally rent a guest bed to improve their income via Airbnb. Individual rooms account for a maximum of 3% of the offer, “says Tom Slee, author of the book „Deins ist meins“. The Inconvenient „Truths of the Sharing Economy“. „On the other hand, 40 to 50% of the business comes from hosts who rent several apartments, so they act as profit-oriented. „Thus, in the historic old town of Lisbon, a quarter to one third of all apartments are used commercially. “This area is hardly habitable for the elderly,” says Slee.

More and more cities are pulling the emergency brake: In Berlin, an approval is needed, who wants to rent more than half of their living space – a real Airbnb ban. In New York and San Francisco, everyone can only offer one apartment. In London, an accommodation can be rented for a maximum of 90 days a year, and four months in Paris. The financial penalties are partly exorbitant – in Barcelona up to 600.000 euros. Airbnb locks accommodations when the maximum of rentals is achieved. There are no restrictions in Switzerland. “It was very early to recognize that digitalisation promotes tourism,” says Schwarz. Only the incomplete collection of the visitor taxes by the hosts is causing headaches.

Airbnb is now collecting the fees for Zug. There are similar agreements with 270 cities around the world. The augurs wondered when Airbnb would open their own houses. After all, customer wishes are known exactly, but also the most profitable locations. Schwarz considers a verticalization as unlikely: “The special feature of Airbnb, namely the authenticity of the travel experiences, is created by the many private providers. That’s not enough to fit your own real estate. Economically, it would not make much sense for him either.“

IN THE LUXURY

Airbnb has recently strengthened itself. In February 2017, Airbnb bought the company Luxury Retreats, a specialist for premium apartments, who mediates 65 apartments in Switzerland for several thousand francs a night, for a presumed 300 million dollars. Schwarz is talking of “very great synergies with the core business”. Further investments round off the picture of the emerging tourism group: Airbnb has invested in the reservations app Resy  and bought Tilt, a payment start-up, which makes restaurant settlements easier to share.

A purchase by Airbnb would also be a possible exit for Hübner and Fallegger from Le Bijou. “But not at the moment,” Hübner says. “We have a vision and want to implement it.” In Zurich, close to the railway station, the two have rented a seven-storey office building for 20 years and are now converting it to five luxury apartments. In Geneva and in Central Switzerland, they want to acquire their own real estate. “100 apartments are our next milestone,” says Fallgger. “After that, there is probably still potential for more.” An expansion into the tourism ruins of this world could be an idea, with franchisees as hosts and both as managers. “We already have inquiries from investors who want to raise this with us abroad,” says Hübner.

 

Read the complete article in the BILANZ HERE.

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