As hotel rates continue to climb upward, Airbnb CEO Brian Chesky said he sees opportunity for Airbnb to better compete on price against traditional lodging.
During a call with analysts on Thursday, Chesky said that Airbnb prices in North America were down 1% in Q2. With hotel pricing on an extended upswing, rising an estimated 4% to 10% for the quarter, Chesky said he believes Airbnb offers a better value proposition.
“If we live in a world where Airbnb prices do not go up and they even remain flat or stable and hotels continue to rise, then Airbnb continues to become more affordable relative to hotels,” he explained. “Hosts have started lowering their prices, with more of them offering weekly and monthly discounts.”
Chesky acknowledged, however, that Airbnb has room to improve its consistency and that Airbnb is in the process exploring ways it could offer guest “services you could get in a hotel or at a resort” in markets where Airbnb has “critical scale.”
Looking beyond North America, Chesky said the company has found recent success in expanding its footprint in Brazil, where Airbnb has doubled in size over the past few years, as well as Germany, which “is on track now to be one of the largest countries in the world on Airbnb.”
“We’re going to take that playbook, and we’re going to bring it to Asia, and we’re starting with Japan and Korea,” said Chesky. “Asia Pacific is a frontier.”
Chesky added that Airbnb sees “huge opportunity” to grow its longer-term monthly stays, which has boomed with many employees working remotely. Before the pandemic, around 13% of Airbnb’s total business was monthly stays. Today, it’s 18%.
“You’ve got hundreds of millions of people, and one day perhaps more than 1 billion people, who have a job via laptop that has some incremental flexibility that did not exist 10 or 20 years ago,” said Chesky. “I think there’s going to be a category that is not travel and it’s not classic housing. It doesn’t even really have a name, but … is actually a major new category of business.”
Earlier this year, Airbnb adapted its booking model to make monthly stays more affordable, allowing longer-term guests to pay in monthly installments. Airbnb also reduced fees on stays of three months or more.
Airbnb Experiences are ramping up
Chesky provided an update on the company’s Experiences tours and activities arm, which were put on pause during the height of the pandemic but have since relaunched. Chesky said the Experiences business “is ready to scale.”
“People love experiences,” asserted Chesky, adding that 95% of all reviews left for experiences are five-star reviews, while within Airbnb’s core homes business, the share of five-star reviews is 84%.
For the second quarter, Airbnb reported that bookings (lodging and experiences) increased 11% from a year earlier.
The company reported second-quarter revenue growth of 18%, to $2.5 billion, while posting net income of $650 million, up from $379 million a year earlier.
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