Prestige Property: 24-28 George Street, East Melbourne, VIC

Offered as a residence for the first time in over 100 years is this luxuriously transformed post office in East Melbourne.

Set across an impressive 723sqm plot, the 4-bedroom, 3-bathroom, 2-car garage home presents 687sqm of contemporary living space – designed by Charles Salter – within its historic façade.

Retaining the post office’s 1920’s charm, the interiors blend old with new through soaring ceiling heights and tall windows meeting rich hardwood floors – now with hydronic heating.

The ground floor homes the formal dining, living and library – all leaning into the buildings historic charm – while the open plan living, dining and kitchen play a more contemporary role in the home.

Here, we are met with a large commercial-grade kitchen fitted with Viking industrial appliances and a handcrafted timber island. A fully appointed butler’s pantry and dumbwaiter round out the offering.

Flowing from the living and dining space is access to the vine-clad terrace, complete with a built-in barbecue area. An adjoining entertainment room makes clever use of the post office’s old bones.

The first floor is home to the parents’ retreat which includes a set of elongated ‘his’ and ‘hers’ walk-in robes and ensuite, which is fitted with limestone finishes and an opulent skylight. An impressive feature, the master suite’s northern wall of glazing retracts to bring the verdant gardens inside.

The basement sees three of the bedrooms, a bar, billiard room and 1200 bottle wine-cellar while a studio and conservatory (which sits atop a 10-metre pool in situ) is found at the back end of the property.

CCTV security, automatic irrigation, remote gates to basement garage are also here.

Arriving in a prized location, the residence is moments from the MCG, Fitzroy Gardens and the very best of Melbourne’s inner-city dining.

The listing is with RT Edgar’s Sarah Case (+61 439 431 020) and Warwick Anderson (+61 418 320 873). Price guide: $10 million; rtedgar.com

AI agents like Muse can already find you the cheapest hotel room in Paris. But they can’t locate a cheaper version of that Catskills cabin you’ve been eyeing, because it might only be available on Airbnb ABNB -1.43%decrease.

Investors should pay attention to that distinction. When Meta Platforms META 3.38%increase launched its Muse agent last month, travel stocks including Booking Holdings BKNG -1.19%decrease, Expedia and Airbnb all fell sharply.

Airbnb, though, has a real chance to emerge as a winner from the upheaval. The catch: Its stock already reflects above-industry growth. To justify its valuation, Airbnb will need to turn repeat customers into loyal ones.

Online travel companies make much of their money by simplifying search and collecting fees on bookings. AI agents threaten that model.

But not all travel marketplaces are equally exposed. Booking and Expedia largely sell hotel rooms that travelers can also book directly or through competing sites. If an agent can find the same room elsewhere, it has little reason to favor either Booking or Expedia.

Booking and Expedia also sell sponsored listings that steer travelers toward particular properties. Wells Fargo estimates those will account for about 8% of Expedia’s revenue and a much higher percentage of profit next year.

Airbnb has more ways to adapt. More than half its listings are available only on its platform, and more than 90% of its traffic comes directly to its app or website.

The customer relationship doesn’t end after booking, either. Bernstein analyst Richard Clarke notes that 90% of Airbnb guests go on to message their hosts about arrival times, keys or local taxes, giving Airbnb a connection to both sides of the transaction.

How the companies have responded to the possible agentic future is telling.

Expedia quickly signed on as a Muse partner. Airbnb hasn’t, and Chief Executive Brian Chesky says AI chatbots have so far been a boon, sending customers to Airbnb’s website.

Chatbots might work for buying paper towels, he quipped at a Skift conference last month, but people enjoy planning trips. He argued that browsing dozens of homes isn’t something a text-based chatbot is well suited for.

Still, the AI jitters arrived just as Airbnb was persuading investors it deserved its pricey multiple. For years after its 2020 initial public offering, the stock—which trades around 25 to 30 times forward earnings—went nowhere. Investors saw a mature operator trading at a growth premium.

This year, Airbnb growth seems to be accelerating. The stock jumped in August after the company raised its full-year revenue-growth guidance with its second-quarter results. Wells Fargo analyst Ken Gawrelski credits a run of product improvements under a revamped leadership team.

Among the changes: letting guests reserve now and pay later, adding hotels, and a redesigned home page and app. Investors were also betting on what comes next, including thousands more hotels, car rentals and, eventually, advertising.

The irony is that some of those growth drivers push Airbnb closer to the kind of business Booking and Expedia run—the kind of business AI agents could threaten. Even if AI agents capture a large share of travel planning and booking, Airbnb would capture the demand. But it and others would slowly lose control over how customers find and choose properties.

That would undermine the advertising opportunity investors are counting on. The bigger point for Airbnb and other marketplaces is that losing control of customer acquisition could mean surrendering some of their pricing power and margins.

To bulletproof itself, Airbnb might look to another e-commerce giant that has so far kept AI agents at arm’s length: Amazon.

Like Amazon, Airbnb has a loyal customer base and hard-to-match supply. But it has nothing like Prime membership to make customers think twice before taking their business elsewhere.

That is where loyalty comes in. Business travelers stick with Hilton or Marriott because enough nights earn them perks. Leisure travelers rarely accumulate stays with one chain. Airbnb has millions of listings and plenty of repeat customers, but no broad rewards program. It has begun experimenting with credits on hotel stays, but it should make loyalty a priority, not just a promotion.

Airbnb also plans to launch its own AI agent next year. But travelers using an agent might still want it to search Airbnb, Vrbo, Booking and hotel websites alike, rather than limit itself to one company’s inventory.

Eventually, Airbnb might have to strike deals with agent makers, using its unique homes as leverage to negotiate favorable terms, says Gawrelski. Such deals, along with rewards for loyal guests, could over the long term eat into the company’s roughly 13% take rate, he adds. But if they bring in enough additional bookings, the trade-off could be worthwhile.

History offers a reason not to panic. The shift from desktop to mobile unsettled investors in Alphabet and Amazon, but both emerged as major beneficiaries. Companies with valuable assets can come out of a platform shift stronger, if they adapt quickly enough.

Airbnb has homes the bots can’t easily replace. Now it needs to give guests a reason to insist on booking them there.

Prestige Property: 24-28 George Street, East Melbourne, VIC

Historic charm meets modern opulence.

AI-powered travel agents are challenging online booking platforms, but Airbnb’s exclusive listings and direct customer relationships could give it an edge. Its next challenge: turning repeat guests into loyal customers through stronger rewards and innovation.