- Tours & Activities Overview
- Airbnb Experiences - an exclusive interview with a top host
- Additional Airbnb Experiences FAQ's
Tours & Activities Industry Overview
It’s almost cliche to say that the tours and experiences sector is undergoing rapid change. The migration from offline to online, while not near complete, has accelerated in the past years with large OTA’s like Klook and Get Your Guide receiving collectively over $1 billion in investment. Meanwhile, Airbnb is rapidly expanding their Experiences division with a view of going public.
Despite this new found interest in the tours and activity category, according to Phocuswire, nearly 80% of gross bookings are still made offline and the market remains highly fragmented. Considering that the sector is expected to grow to $183 billion this year, that leaves significant opportunity to digitize global supply.
Other than well-funded startups such as Klook, Get Your Guide, and yes, Airbnb, legacy players like TripAdvisor, Expedia, and Booking also have tremendous skin in the game. Recently, TripAdvisor announced a leadership shuffle affecting Viator, their T&A division. They also unveiled a renewed energy in promoting the Viator brand, versus housing it under the TripAdvisor umbrella.
Airbnb is also doubling down on their Experiences division, recently hiring a former Disney exec to head up the fledgling, but still unprofitable, product.
Airbnb Experiences: An exclusive interview with a top Experience host
Greg McQuaid launched his Airbnb Experience just two short years ago. Today, he has the #1 rated Experience in San Francisco - Airbnb’s backyard.
Read on for a behind-the-scenes look at how Greg became so successful and how Airbnb works with their top hosts.
I worked in radio for many years here in San Francisco as an on-air personality and audio engineer. After my former station KFOG shut down, I figured I was done with radio. So I went to work, naturally, at a startup in the audio industry and hated it!
Living in San Francisco, I was aware of Airbnb on the homes side, but not Experiences. I really just stumbled upon it.
My first idea was a live concert concept, but the economies of scale weren’t there. One day, I was walking my friend’s dog and came across a beautiful mosaic tiled staircase. As it turns out, there’s many of these staircases hidden in different neighborhoods around San Francisco, and the experience was born!
Originally I thought it would be something nice to do for a little while until I found a full-time job.
It’s been almost exactly two years - it launched in February of 2018. I was fortunate in that I started getting bookings instantly.
Oddly, it’s about 90% women! You can tell when one of them has dragged their partner along and he’d rather be at the pub watching the game. I also get a high amount of older folks - baby boomers, even though the Experience is fairly active.
Sure, it’s called Hidden Stairways of SF Urban Hike and it’s a two mile walking tour of San Francisco's hidden stairways. Currently, it is the #1 rated Airbnb Experience in the Bay Area. I bring guests to see gorgeous mosaic tiled steps and share the stories behind them.
There are some amazing views of the Golden Gate Bridge, Golden Gate Park and downtown San Francisco. We walk through beautiful neighborhoods and gardens that tourists rarely see and I provide some history along the way.
The tour started as more of an active experience with a fitness angle. It was also a bit longer at 3.5 hours. It’s since evolved into more of a “chill stroll.” I cut the duration to two hours, which is physically more accessible and allows me to schedule two departures per day. After those tweaks, it really took off.
Airbnb makes it a simple and very seamless process. They did a background check and asked me to upload my passport and driver’s license. It took 10 days to be approved, and no one ever came out to vet me or the experience itself. Their platform was very user friendly. Not like Viator, which is a little clunkier.
I’ve had the chance to meet Joe Zadeh, former Head of Airbnb Experiences, and Hyun Lee, who is their Market Manager in San Francisco. Both of them are great and very receptive to feedback.
Airbnb provides me with insurance that covers each guest up to $1 million. Last May, Airbnb contacted me to join a pilot program - they said they would still insure me regardless, but asked if I would look into getting my own individual insurance policy.
Airbnb offered a $500 cash-back stipend to pay for the premium, which ended up costing me only $990 annually (I might have gotten a great deal!). My personal policy also provides another $1 million in coverage, per guest. In the case I was faced with a claim beyond $1 million, Airbnb’s policy would then kick in.
I use social media - mostly Instagram and Facebook. But honestly, I get plenty of biz from Airbnb and find I don’t need to supplement elsewhere. I briefly tried Travelocity and Viator, but got literally zero bookings. At that point, I wasn’t even aware that Expedia offered a Tours & Activities platform as well.
Airbnb auto-caps each departure at 10 guests. You can lobby for them to increase it, but 10 is ideal for personal engagement. It also gives me the best chance to get positive reviews.
Ok, so this might sound crazy, but I deliberately keep my pricing on the lower end vs. other Experiences of similar length in the Bay area. People traveling in from overseas or other cities in the US aren’t used to premium Bay area pricing. At $25 per person, it’s affordable to the masses. Summer is the peak season, but that’s also when the weather is not so nice in SF! I don’t currently use any 3rd party software.
Another time, Airbnb offered me an early bird booking pilot program and I tried it. Concept was that prices were most aggressive for guests booking early. But people on the tours started talking and realized they all paid different amounts. Even though this is commonplace on airlines and even multi-day tours, I ended up getting sub 5-star reviews so stopped immediately. Now my pricing is consistent throughout the year.
Well, my situation is a bit specific. My home is paid off, taxes are low, and I don’t have kids. My partner has a good full-time job as well. That said, the money I make from Airbnb would be considered below the poverty line here in San Francisco.
Unless you’re in a similar situation as mine, I would say it’s very hard to make ends meet surviving on Airbnb alone. But if your living expenses aren’t exorbitant and you’re a dual income household, running an Experience can be a very fun, flexible way to bring in considerable income.
Seeing as I keep pricing low, yes. If commissions went up to 25%, I would likely need to raise prices but I don’t think it would hurt sales too much. I actually think they [Airbnb] will probably raise commissions soon - it seems too good to be true. Experiences only made $15m last year, right?
I think my hidden staircase concept comes across as real and organic - it’s genuine - which is what travelers seek these days. Guests don’t want a city tour or ‘big red bus tour.’ I’m professional but not A professional and that’s what people want. I don’t sound or act like a traditional tour guide.
The photos I use on Airbnb’s site are very colorful - they're Instagrammable!! Airbnb wanted people in all the photos so I had to fight them on that. ‘Hidden Stairways’ implies it’s something exclusive that not everyone sees. Sort of off the beaten track, but still very accessible if you’re wondering around San Francisco.
Some Experiences hosts feel Airbnb is over-saturating the market - there’s something like 350 products in the Bay area alone. But mine is the only ‘Hidden Staircases’ offering.
Thank you, I’m very proud of my rating. Airbnb had an awards night recently, and I won for ‘most 5-star reviews in San Francisco.’ So after each outing, the guest is sent an email from Airbnb asking for feedback. But I take matters into my own hands before that even happens.
I go above and beyond, like giving every guest a succulent plant at the end (my partner works for a landscape design firm).
I also leverage technology. I use Relive - an app that creates a video and inserts photos along your route. I also ‘airdrop’ photos to guests with iPhones at the end of the walk. I think the Airbnb app isn’t great for photos.
My secret, which maybe I shouldn’t reveal, is I personally email every guest thanking them and link to other cool stuff to do in SF. I also reiterate that they will get an email from Airbnb asking for feedback and remind them how important it is to my business.
I’m not sure what percent of my guests leave a review but over 50%.
Funny story - the only 1-star review I ever received was from a guy who thought I should have demonstrated how to safely walk down stairs. He even tipped me, but still gave me 1-star!
If you’re below a 4.7 average rating, you risk getting kicked off the platform. According to my contact at Airbnb, the average customer reads the 5 top (sequentially) reviews on any given Experience. So even if you’ve had some negative feedback, you should be able to push it off the first page as long as you continue to get more positive ones.
What advice do you have for fellow Airbnb Experience hosts looking to start their business?
There are four things really:
If you’re in San Francisco (or another expensive market), keep your prices low! Not a loss leader, but don’t pad much margin until you’re established. Then test slowly raising your pricing, if you’d like.
Be unique and specialize in something niche. Do your research.
Look at who your guests are (yes, snoop on social). Lots of times, you will get journalists and Airbnb employees, especially in San Francisco.
Keep it exclusive to Airbnb - don’t put it on other platforms to boost your capacity because Airbnb guests are expecting a small group. They want that intimate experience and you risk negative reviews.
Just recently, Airbnb announced that they hired a former Disney executive to head up their Experiences division. What does this tell you as a host about Airbnb’s plans for this product line?
I think it is good that they are really focusing on Experiences. Honestly, at times it felt like this was one big experiment and that they would just shut it down. Sometimes tech companies need someone more mature in the room. Hopefully she gives them more direction.
Where do you see your Experience and the entire product line overall in 3 years time?
[laughs] I’m really not sure. I thought this would just be temporary and if I got my dream job, I would shut it down. But I'm really happy and like my life right now. I imagine there might be a burnout, but two years in, I’m still enjoying it.
Airbnb Experiences: More FAQ’s and tips for hosts
How do Airbnb Experiences differ from a regular tour or activity?
Airbnb Experiences are more nuanced versus everyday tours and activities. Airbnb describes them as ‘an activity that goes beyond a typical tour or class…’ This means each Experience should be unique and open up a part of a city's culture or landscape. It can be as broad as a food tour by bike to hiking with rescue dogs from a local animal shelter.
How do I come up with a concept for my Experience?
As Greg said above, be organic and genuine from the start. Think about your hobbies, interests, and areas of expertise and craft an experience around one of them. Greg was a marathon runner, so his experience is on the active side of the spectrum.
Which cities currently offer the chance to host Airbnb Experiences?
As of February 2019, Airbnb Experiences are live in over 1,000 cities worldwide. Some of the most popular destinations include:
- New York
- San Francisco
- Los Angeles
- Mexico City
What pitfalls should I avoid as an Airbnb Experiences host?
Make sure you devote plenty of time and are realistic about your schedule. If you cancel often on your guests, you risk getting delisted by Airbnb. Ensure you have insurance - either individually or via Airbnb. Also, it is recommended to read the Airbnb Experiences Guidelines.
How do I promote my Experience?
Leverage social media and create ‘Instagrammable moments’ during your experience. Think art, food, amazing views, cute animals! Post often and encourage your guests to tag you on their posts.
Can you make money as an Airbnb Experience host? How does payment work?
This is a complex question as it really depends on your current personal financial situation and how well your Experience sells. For Greg, it seems to be working out nicely, but then again, he doesn’t have many large household expenses.
Remember, Airbnb takes 20% of whatever you make (other platforms like Viator, and Booking.com tend to be in the 25-30% range). You get paid 24 hours after hosting an Experience and can track everything from your Airbnb dashboard.
Check out Greg’s Experience on Instagram: @hiddenstairssf | #hiddenstairssf