Airbnb Is Starting To Think Like Amazon's Jeff Bezos, And It's Paying Off

Airbnb's (NASDAQ: ABNB) Brian Chesky has become one of the most admired CEOs in Silicon Valley.

Chesky earned plaudits when his company laid off 25% of its workforce at the start of the pandemic, but set an example for other companies by attempting to line up jobs for outgoing employees, offering generous severance benefits, and outlining his thoughts in a detailed memo.

He's long been seen as a visionary in the tech sector and has always been open with his thinking around the decisions he makes. For instance, he recently reclaimed more control over the organization, returning to "founder mode" after believing key decision-making had become too dispersed.

For investors, though, Airbnb stock has often been frustrating to own, as the company, despite its evident competitive advantages, has mostly traded sideways throughout its history and underperformed the S&P 500 during an epic tech boom.

However, that could change as the travel stock surged to a four-year high on Friday, following a strong second-quarter earnings report in which the company beat estimates on both the top and bottom lines and raised its guidance.

In addition to the strong numbers, Airbnb is starting to evolve as a platform, moving beyond home-sharing and following in the footsteps of Amazon, which built the first dominant e-commerce marketplace.

Image source: Airbnb.

Can Airbnb be the Amazon of travel?

Talking up the company's plans to expand beyond the core, Chesky said early last year, "We want the Airbnb app, kind of similar to Amazon, to be one place you go for all of your traveling and living needs." He also noted, "We're not a very frequently used app. People typically use this once or twice a year, and I would love for it to be one day for people to use this once or twice a week."

Chesky also commented on how Amazon, under founder Jeff Bezos, evolved from selling books to selling other media items to selling nearly everything to becoming a massive marketplace built on third-party sellers.

Now Airbnb is taking important steps in that direction after it first launched its services marketplace last year, allowing guests to book things like a hair appt. or a photographer when they're traveling.

This summer, it expanded its offerings to include car rentals, grocery delivery, airport pickups, and luggage storage. It's adding boutique and independent hotel bookings, as well, giving customers access to more than just homestays.

Like Bezos a generation ago, Chesky seems to be realizing that Airbnb's true potential is as a platform, rather than just a direct marketplace. Airbnb has become a massive funnel for travel, challenging other leading online travel agencies. Naturally, travelers are going to be interested in booking things like car rentals or luggage storage, and purveyors of those services are going to want to list on Airbnb.

For Airbnb, it's a win-win. Adding such services grows the platform's utility, makes customers more likely to visit the site, and attracts more vendors, growing the business.

What's next for Airbnb

There are a lot of ways that Airbnb can continue to monetize and grow its platform, and the company is working on expanding it.

For example, it's considering adding flights to its marketplace as part of its strategy to be a one-stop shop for trips, but it has not formally announced anything. Flights tend to be less profitable for online travel agencies than hotels since there are only so many airlines, giving them more negotiating power, and they have the ability to draw travelers directly to their websites.

Chesky's comment about making the site a platform for traveling and living also alludes to adding host-driven services, which could be particularly valuable. Those could include services like cleaning, handyman, landscaping, caretaking, installation, plumbing, electrical, pool maintenance, HVAC, and more.

The company is in a unique position to essentially build out a global property management services platform, as it has a built-in base of millions of hosts who would likely be eager to take advantage of it. That's a huge global market, and Airbnb should eventually be able to offer those kinds of services, though it hasn't made any specific comments about it.

After years of spinning its wheels, Airbnb finally seems to be clearly headed in the right direction. If it can continue finding new ways to expand its marketplace, the stock should be a winner over the long term.

Jeremy Bowman has positions in Airbnb and Amazon. The Motley Fool has positions in and recommends Airbnb and Amazon. The Motley Fool has a disclosure policy.