One of the key aspects of the sharing economy is that companies don’t need to own assets to operate and thrive. Uber doesn’t own any cars, yet it’s one of the largest and most used means of transportation in the world. Airbnb (currently valued at $25 billion, which more than any hotel chain) is a super popular accommodations option for travelers who want to stay in popular areas, but not want to for over expensive hotel costs, but it doesn’t actually own any property, not until now.
AirBnB has partnered with real estate developer Newgard Development Group to launch its own 300-unit rental complex in Kissimmee, Florida. It’s expected to feature keyless entry and storage options to secure items when tenants go away and rent their space, which they will be allowed to sublet for up to 180 days each year. Those renting out their units will be able to manage bookings through an app, and the accommodation would essentially be like a serviced apartment, with a host on site and mandatory cleaning. Money is divided 25% for Newgard, 3% for Airbnb, with tenants recovering the rest. Newgard said the company plans to build 2,000 Airbnb branded units over the next two years.
It’s an interesting move for Airbnb, as the company is looking for more growth by diversifying its business, which has been under fire in some markets. By expanding into new revenue streams, it could protect itself from backlash towards its rental arm i.e. NYC cracking down on Airbnb listing. Not too long ago, Airbnb launched an “Experiences” feature where users can book unique experiences led by locals. Owning property is a logical move, as it could help Airbnb collect a bigger portion of the booking revenue.