Brian Chesky, the CEO of Airbnb.
Airbnb CEO Brian Chesky called out his own company in an interview with Bloomberg published Monday.
He said the company “never fully built the foundation” to match its current size.
Hosts on the platform are encouraged and want to see more support in their operations.
Airbnb CEO Brian Chesky says it’s time for the company to “get our house in order,” in an interview with Bloomberg, and short-term rental hosts are thrilled.
Airbnb host Ric Kenworthy, who manages over 90 properties in Arizona, says Chesky’s comments were a long time coming.
“I’m glad that they’re realizing that we need to focus on our core processes,” he told Insider.
The short-term rental giant has experienced a roller coaster ride over the past three years, first losing 80% of its business in the onset of COVID-19, followed by a post-lockdown windfall for hosts, then a mixed summer 2023.
To be sure, hosts are always at the whims of travelers. This past summer, many saw more last-minute bookings, shorter stays, and deal-seekers, Insider previously reported. Occupancy for hosts dropped 4% in August compared to last year, according to analytics site AirDNA. “It’s possible that the new normal is just more sporadic and not so reliable,” Jen Kelman, a short-term-rental host in Arizona, told Insider.
Chesky’s site is a marketplace that connects hosts and travelers, and the CEO is struggling to keep both sides happy. Travelers have complained of high prices, hosts who demand they do the laundry and take out the trash, and inaccurate listings, while hosts are facing a oversupply problem that’s been dubbed the Airbnbust.
Chesky told Bloomberg he wanted to make the business better by ensuring “the listings are great, we’re providing great customer service and we’re affordable.”
As travelers continue to book short-term rentals, Chesky acknowledged the company “never fully built the foundation” needed for the current size of the company.
“We had a house and it had four pillars when we needed to have 10,” he told Bloomberg.
Hosts want more support from Airbnb
Hosts occupy a unique position within Airbnb. They aren’t employed by the tech giant but rely extensively on the platform, which commands nearly 74% of market share, according to financial site Motley Fool.
Kenworthy’s wish is a “robust host support platform,” as past issues with fake listings and properties listed multiple times caused issues with his guests.
He emphasizes that these problems aren’t exclusive to Airbnb, but their position as the largest brand in short-term rentals means the company can affect large changes. This month, Airbnb announced a new verification system for listings.
“Because Airbnb is the industry leader, they are going to have to pioneer how this whole deal moves forward,” he told Insider.
In Tennessee, host Melinda Johnson also is glad to hear Chesky’s comments.
“There’s a lot of mistakes they made along the way, some of that was unavoidable with the pace of growth,” she said.
Johnson wants to see uniform requirements for hosts, as she believes the much-memed skyrocketing cleaning fees was one symptom of hosts left to their own devices.
“Owners were left to talk to each other about what policies to set,” she said.
Airbnb provides guidance on such things as cleaning fees and checkout tasks, and allows hosts — by invite-only — to provide feedback on host features before they’re widely available. An Airbnb spokesperson told Insider that hosts control pricing, but the company now offers tools “to help them understand their pricing, and when or how to make adjustments to remain competitive and attract more guests.”
Chesky says hosts will need to focus on affordability
Chesky credits part of Airbnb’s early success to being a cheap alternative to hotels. “A lot of people were introduced to our service from a pricing standpoint,” he told Bloomberg.
To stay competitive, Chesky predicts hosts should prioritize dealmaking with guests and wants rentals to directly compete with the nightly price of hotels in their area.
“When our hosts provide better deals, they tend to make more money,” he said.
That might not be well received by some already-exhausted hosts, who have put up with a summer of unpredictable bookings and price-slashing races among hosts to fill beds.
Kelman, who operates a 2-bedroom cabin in mountain getaway Pine, Arizona, remained vigilant day-to-day on her pricing compared to other stay in her area. Even with all the extra effort, she brought in $4,000 this July, a drop from the $5,400 she made last July.
But, others have charged forward nonetheless. In Lake Arrowhead, California, Katie Kay Mead manages seven properties and said this summer two types of rentals were doing well: the cheap and the high-end. For the rest of the rentals in the middle, she previously told Insider that hosts and managers were forced to dance back and forth with the market to find a “breakeven price” where it’s “worth it to rent, but people still see it as a good enough deal.”