For those managing vacation rentals on Airbnb, understanding the platform’s strategic direction for 2024 is essential to align your business strategies effectively. Drawing insights from Airbnb’s first-quarter earnings call, which outlines the platform’s commitment to its 2023 goals—Making Hosting Mainstream, Perfecting the Core Service, and Expanding Beyond the Core—we at Rental Scale-Up provide a comprehensive look at Airbnb’s achievements in 2023.
We also venture predictions for 2024, including the introduction of a host services marketplace, the expansion of the “Experienced Co-Host Program,” and the initial development stages of Airbnb Concierge, an AI-driven super-app designed to surpass competitors like Vrbo, Zillow, Meetup, and BlaBlaCar.
1. Making Hosting Mainstream
“In 2024, we’ll continue raising awareness around hosting and improving the overall host experience”, said Brian Chesky while commenting on Airbnb’s Q4 2023 results.
Airbnb is committed to making hosting on their platform commonplace and accepted in mainstream culture as traveling with them. To reach this goal, they focus on increasing awareness about what it means to be a host, simplifying the process of getting started, and offering even more support tools for hosts.
Accomplishments in 2023
More Hosts: Airbnb embarked on a strategic campaign to elevate hosting to the same level of popularity as traveling among its user base. This initiative aimed at not just growing the number of hosts but also enhancing the quality and diversity of the listings available on the platform. By the end of 2023, Airbnb successfully grew its host community to 5 million hosts globally, underscoring the effectiveness of its outreach, education, and support efforts aimed at attracting new hosts and retaining existing ones.
More Listings: The active listings on Airbnb saw a remarkable increase, exceeding 7.7 million by the end of 2023. This represents an 18% year-over-year growth, signaling a robust expansion in Airbnb’s inventory. This growth can be attributed to several factors, including the platform’s efforts to simplify the hosting process, provide better tools and resources for hosts, and enhance the overall hosting experience. The increase in listings is a crucial factor in Airbnb’s strategy to offer more diverse and unique stays to travelers, catering to a wide range of preferences and budgets.
Regional Supply Growth: Airbnb witnessed double-digit growth in supply across all regions, highlighting the platform’s global appeal and the universal interest in hosting among people from different parts of the world. This growth is indicative of Airbnb’s successful marketing and support strategies tailored to various regional markets, addressing local challenges and opportunities to encourage more people to become hosts.
Financial Impact on Hosts: Hosts on Airbnb earned more than $57 billion in 2023, showcasing the financial benefits of partnering with the platform. This significant earnings figure reflects the lucrative opportunities available to Airbnb hosts and underscores the platform’s role in contributing to the financial well-being of individuals and communities around the world. The earnings also highlight the trust and preference travelers have for Airbnb, choosing it for their accommodation needs, which in turn drives revenue for hosts.
Our main bet for 2024: The Host Service Marketplace
Ar Rental Scale-Up, our biggest bet for 2024 for the “Making Hosting Mainstream” strategic pillar is the launch of a marketplace of free and paid services for hosts.
In 2024, Airbnb plans to elevate the hosting and guest experience by introducing a host services marketplace, a strategic initiative aimed at consolidating a variety of free and paid services under one roof. This move is part of Airbnb’s broader effort to streamline property management processes for hosts and enhance the quality and affordability of stays for guests.
Purpose of the Launch
The marketplace aims to solve common challenges hosts face, such as the complexities of property management and the need for consistent, high-quality guest experiences. Through partnerships established in 2023 with companies like Breezeway, Beyond, PriceLabs, and Wheelhouse, Airbnb is set to offer a curated selection of services directly within its platform. This initiative seeks to leverage Airbnb’s extensive network, integrating a multitude of service providers to deepen its competitive edge in the accommodation sector.
Enhancing Reliability and Reducing Costs
- Improved Reliability: The inclusion of professional services ranging from cleaning and maintenance to pricing optimization ensures that Airbnb listings maintain a high standard. This consistency is key to providing reliable experiences for guests, who can expect well-maintained properties and attentive hosting.
- Greater Cost Efficiency: The marketplace offers hosts the ability to compare and select services that fit their budgets, promoting cost efficiency. The strategic addition of dynamic pricing partners like Beyond and PriceLabs allows hosts to adjust their rates based on real-time market demand, potentially making listings more attractive to guests without sacrificing profitability.
2. Perfecting the Core Service
The goal is to make Airbnb a more affordable and reliable option. It wants” people to love their service.” Airbnb’s core service provides a marketplace for short-term stays, i.e., stays under 28 days.
Innovation and Feature Releases: Airbnb’s commitment to enhancing user experience led to the introduction of over 430 new features and upgrades, aimed at increasing affordability and reliability for both guests and hosts. This extensive development effort over the past three years included significant improvements in the booking process, search functionality, user interface, and new tools to simplify the hosting experience. These initiatives underscore Airbnb’s dedication to continuous innovation and responsiveness to user feedback, reinforcing its leading position in the sharing economy.
Reduction in Host Cancellations: A notable achievement for Airbnb in 2023 was the significant 36% reduction in host cancellations in Q4, compared to the same period in the previous year. This decrease is a testament to the effectiveness of Airbnb’s policies and initiatives designed to encourage host commitment and minimize disruptions for guests. Enhancing reliability is essential for maintaining trust within the Airbnb ecosystem and improving the overall guest experience.
Encouraging Longer Stays with Discounts: Recognizing the trend towards longer-term stays, Airbnb motivated hosts to offer discounts for weekly or monthly bookings. This strategy led to two-thirds of Airbnb hosts now offering such discounts, making extended stays more accessible and affordable for guests. This approach not only benefits guests seeking longer accommodations but also aids hosts in securing longer booking periods, enhancing their rental income stability. This initiative aligns with Airbnb’s broader objectives of flexibility and affordability, catering to diverse travel needs and preferences.
Our bet for 2024: The larger deployment of the Co-Hosting Marketplace
Brian Chesky said :”We’ll continue responding to feedback from the community, and in 2024, we’ll continue to improve the quality and reliability of stays”.
At Rental Scale-Up, we think that one way do that is through the “Experienced Co-Host Program“. It expanded to the US, Canada, and Australia in 2023, aiming to enhance stay quality and reliability. It could go bigger in 2024. This program is designed to connect property managers with Airbnb hosts to elevate the guest experience through professional management. Here’s how it aligns with Airbnb’s 2024 goals:
- Bringing Professional Standards: By involving professional property managers, the program ensures that listings are well-maintained, clean, and offer consistent, high-quality experiences to guests.
- Improving Guest Satisfaction: Experienced co-hosts, who have shown success with an average guest rating of 4.8, focus on making guests’ stays memorable by providing personalized service and efficient communication.
- Guaranteeing Listing Availability: The initiative makes it easier for hosts to keep their listings active, even when they’re not available, ensuring guests always have great places to stay.
- Simplifying Property Management: The program connects hosts with professional co-hosts to handle everything from guest interactions to maintenance, making the management process smoother and more efficient.
Expanding Beyond the Core
The core of Airbnb are stays under 28 days in key markets such US, Canada, Australia, France, and the UK. Any other length of stay, business line, or destination is beyond the core.
Chesky said: “Airbnb is at an inflection point. We spent the past three years perfecting our core service, and now we’re ready to embark on our next chapter“
“But this is only one piece of a much bigger strategy because we’ve always believed that Airbnb was destined to offer more than just a place to stay. And now is the time for us to expand beyond our core business and reinvent Airbnb.”
Let’s have a look at what Airbnb has been up to.
Market expansion
In 2023, Airbnb identified Germany, Brazil, and Korea as areas where it needed to progress. After successfully doing so, the company will use this experience as a blueprint for its expansion into other countries, including Switzerland, Belgium, and the Netherlands.
New business lines
Airbnb already has several business lines beyond its core:
- Mid-term to long-term stays: During Q4 2023, long-term stays of 28 days accounted for 19% of gross nights booked
- Marketplace for tenants: Airbnb-friendly apartments is a program that helps long-term renters find apartments that they can host on Airbnb part-time. Airbnb has more than 400 buildings and 125,000 units on the platform across over 40 markets including 127 cities across 17 U.S. states.
- Experiences: Airbnb offers online and off-line experiences. While sometimes much maligned in travel press, it is interesting foray for Airbnb as a lifestyle brand.
Other new business lines have been hinted, among which a peer-to-peer car rental marketplace.
In a recent Financial Times article, Brian Chesky seems to have been musing about car rentals. According to the newspaper, he “highlighted a “long list of ideas” under consideration, including rental cars and dining pop-ups”. “The second biggest asset usually in someone’s life after their home is their car,” he said, and Airbnb has long considered a pivot to car rental. “That’ll be the next thing,” he said.
Airbnb’s potential venture into the car rental space aligns with its sharing economy model. However, developing and launching such a platform could take time, with a possible launch not expected before 2024.
It’s important to note that platforms like Turo and Getaround already operate in this space, offering peer-to-peer car-sharing services. They have demonstrated the viability of this business model but also represent competition for Airbnb.
Our bet for 2024: The first steps in building a new lifestyle app, the Airbnb Concierge
At Rental Scale-Up, we’re imagining a future in 2025 where Airbnb introduces “Airbnb Concierge,” a game-changing app that could turn Airbnb into much more than just a place to book travel stays. Think of it as a super-app that knows exactly what you need, whether you’re traveling, looking for a place to live, or trying to find a car to rent. With the help of advanced AI technology—like the smart tech used by big companies to understand what you like—Airbnb Concierge aims to offer personalized suggestions for just about anything you can think of.
This future app isn’t just about finding a place to stay. It could help you find long-term housing, connect you with car rentals or shared rides, and even suggest unique activities to make your travels unforgettable. Plus, it plans to make paying for all these services super easy and secure, right from your phone.
Airbnb is thinking big, looking to include all sorts of services that could make a bunch of other apps unnecessary. Imagine not needing separate apps for travel booking, apartment hunting, car sharing, or even organizing local meetups—Airbnb Concierge could do it all.
Click here to read our article about Airbnb Concierge where we imagine this lifestyle super-app where AI can help you find roommates, plan a trip, or make money by sharing your car.
But to make this dream a reality, Airbnb has some work to do. They need to get better at offering transportation options, expand how their payment system works to cover more types of services, and use AI to make their suggestions even more spot-on for each user. They also want to create a marketplace for hosts to find services that help them manage their listings, like cleaning or maintenance.
