Airbnb is working to address users’ complaints about the platform’s listings becoming too expensive.
The rental site is introducing new pricing tools for hosts, where they can now see how other Airbnbs are priced in their area—including those that are in high demand and getting booked, and those that aren’t—in a bid to make pricing more competitive. The new tool also makes it simpler to add discounts and promotions.
These changes “will drive greater affordability and value for guests, and support overall bookings growth,” the company said in a shareholder letter yesterday (May 9). In the US, “the lowest price listings have the highest occupancy,” co-founder and CEO Brian Chesky told investors on a call. The company is also taking steps to make long-term stays more affordable, and go back to basics by promoting renting rooms over entire homes.
The peer-to-peer listings company is seeing the post-pandemic travel boost cooling and it’s concerned about increases in the cost of living prompting holidaymakers to seek out cheaper options.
Airbnb’s best-ever first quarter, by the digits
$1.8 billion: Revenue in the first quarter (Q1) of 2023, Airbnb’s best-ever quarterly result. It grew 20% year-over-year, “demonstrating continued strong travel demand,” the company said.
$117 million: Net income during Airbnb’s first profitable Q1. It posted a net loss of $19 million during the same period a year ago. The figure made it into the green on the back of “revenue growth, expense discipline and interest income.”
$1.6 billion: Airbnb reported its highest-ever free cash flow in Q1 2023, “driven by revenue and bookings growth as well as net margin expansion.”
121 million: Nights and experiences booked in Q1 2023—its highest quarter ever—increasing 19% compared to the prior year, courtesy “growth in all regions.”
Airbnb’s negative future outlook
Despite recording its best-ever quarterly result in the first quarter of 2023, Airbnb told investors to brace for a decline. The return to pre-pandemic travel trends, coupled with new pricing initiatives, are likely to drive revenues down for the company in the near term. In its guidance for the quarter ending June 30, 2023, Airbnb forecasts fewer bookings and lower average daily rates from a year ago.
To counter those trends, the company is encouraging lower prices for long-term rentals—despite the end of remote working policies making it harder for people to be away from home without taking time off—and encouraging travelers to book rooms instead of homes, an option that’s certainly easier on the wallet. However, visitors often hesitate to share a home with a host due to lack of familiarity and, therefore, anticipated awkwardness.
Over the years, the room listing has eclipsed the homeowner profile on the platform, reducing its peer-to-peer vibe. Airbnb is trying to remedy that by launching a more visible “host passports” feature, where previously unavailable facts about hosts such as their profession or the languages they speak are given more prominence.
Making long-term stays more affordable
To make longer stays on Airbnb less expensive, the company is
💸 reducing fees after three months
🏦 allowing US guests to pay with their bank account to save for stays of a month or more
✂️ letting hosts easily set monthly discounts and offer more flexible cancellation policies
Quotable: Reasons for renting rooms, as per Chesky
“The average price per night for a room on Airbnb is just $67 a night. And you know, we’ve been getting a lot of feedback from people and complaints that Airbnbs are expensive, and well, they’re not all expensive, especially these, if you’re willing to stay with people.” —CEO Brian Chesky in an interview with The Verge’s editor-in-chief Nilay Patel on May 9.
Fun fact: You can rent Airbnb chief’s guest room
On the day of the earnings, Brian Chesky opened up a weekend in June in his guest bedroom in San Francisco, California. It got booked within 30 seconds, but don’t be disheartened—Chesky says he’ll more dates open for booking soon.
A non-exhaustive list of other improvements Airbnb is working on
According to a May 6 tweet from Chesky, these are the grievance patrons have against Airbnb, that the company will post updates on the following this summer:
1. Lower cleaning fees
2. Better search & filters
3. Verified listings
4. Better customer service
5. Guest loyalty program
6. Total price with taxes
7. Better review system
8. Lower prices
💼 Airbnb is betting that the future of travel is work
🏘️ Airbnb is giving homeowners $100,000 to build wacky rentals
🇮🇳 Outside its home turf, India is the most important hiring destination for Airbnb