Airbnb Inc. is revamping the home-rental platform in an effort to ease mounting tensions between guests and hosts ahead of what it expects to be a busy summer travel season.
(Bloomberg) — Airbnb Inc. is revamping the home-rental platform in an effort to ease mounting tensions between guests and hosts ahead of what it expects to be a busy summer travel season.
The San Francisco-based company is rolling out more than 50 new features and upgrades designed to improve price transparency, checkout procedures, affordability and more. The changes address feedback culled from millions of customer service tickets, tens of thousands of social media posts and listening sessions with hundreds of thousands of hosts and guests.
“We were definitely noticing we were losing people,” Chief Executive Officer Brian Chesky said in an interview. The co-founder spent six months living in Airbnbs and another six months hosting people, so he could see both sides of the issues. Last summer was “a bit of a wake up call,” Chesky said, as he started noticing more complaints on social media.
“Our brand is so big and mainstream that people now expect it to work every single time,” he said. As costs were increasing for both guests and hosts, “and hitting the wallet, people are really expecting better service.”
Airbnb now has more than 4 million hosts who have welcomed 1.4 billion guests in dwellings from tree houses to mansions around the globe. It has long struggled with how to balance these two sometimes opposing pillars of its business. After being gutted initially by pandemic lockdowns, Airbnb has boomed in the work-from-home era and has benefitted from pent-up demand for travel. It expects more than 300 million guest arrivals on Airbnb this year.
But Covid-19 also changed expectations on sanitation and cleanliness, and a surge in demand led to a rise in prices. By late last year there was groundswell of anger from longtime users who complained about lengthy lists of chores and exorbitant cleaning fees.
Part of the problem stemmed from the app’s design. “People were complaining about the host, but the host had bad tools,” Chesky said. “Hosts were charging excessively high cleaning fees because they didn’t realize what the guest was really paying.”
To fix pricing, Airbnb called on its design department and 20 different teams. The result is a system that allows guests to view the total cost, including all fees before taxes across the entire app. Hosts will also have new tools to set competitive prices, add discounts and compare their listing to similar ones in their area. Hosts can also view their total nightly price across the app to always know what guests will pay.
To make Airbnb more affordable for guests, the company is implementing a series of changes including lower fees, adding the ability to pay in installments through a new partnership with Klarna Bank AB, and a new discount tool for hosts to offer the best deals.
Keeping prices in check on Airbnb is a core mission of the company, as it speaks to one of the main reasons Chesky started it with two friends in 2007. “I wanted to save money,” he said. “And I wanted to meet people and have an authentic travel experience.”
To that end, Airbnb is going back to its “soul” with Airbnb Rooms, an effort to attract the young travelers that Chesky said the platform hasn’t invested enough in over recent years.
The Rooms category will have more than 1 million listings with an average rate of $67 per night, where guests will stay together with hosts, sharing common spaces such as the kitchen, living room, bathroom or backyard. A Host Passport will give guests details about the person they’re staying with, including their photo, social interaction preferences, and fun facts about themselves.
Getting pricing right is also important as the inflation rate is rising, squeezing consumers’ wallets, while airline prices are expensive. Chesky said those elements will have an impact on travel this summer. “When the cost of flights goes up, that impacts our business,” he said. “That’s why we really focus on affordability.” The record travelers he’s expecting this season “could have been even bigger, if not for the uncertainty.”
Chesky described the unique complications of managing a two-way platform as being ripe for disruption by artificial intelligence. He said Airbnb is exploring ways to use the technology to augment customer service and provide better matching between hosts and guests.
“I think every business will be transformed by AI but ours will be transformed more than most,” he said. “There’s so much pricing data and location data — so many things we can do. We want to be in the vanguard.”
But before launching new innovations with AI, the company needs to fix existing problems first, he said.
“I think AI will have profound impacts on Airbnb,” he said, but “I wanted to make sure before we do new things, that people love the core thing that we do.”
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