On May 11, Airbnb will release its 2022 Summer update. Here’s what we can expect from it, as hinted by Brian Chesky, the company’s CEO and guessed by our Rental Scale-Up by watching the company’s moves over the last months. We think that Airbnb will drastically alter its search box, probably merging its Flexible Search features introduced in 2021 with its traditional property search box. The company should also introduce more protections on the guest side, such as its Guest Travel Insurance. We also anticipate more things to make it easier for new hosts to get started with Airbnb.
Just like the traditional fashion houses, Airbnb is now in the habit of releasing 2 collections of new features:
- In May 2021, it released its Summer 2021 update, with 103 new features (among which the Flexible Dates, Flexible Matching, and Flexible Destinations search features and a streamlined host onboarding funnel)
- In November 2021, Airbnb released its Winter 2021 update, with 150 new features (among which AirCover, extended flexible search features, and the Ask a Superhost program).
So, what to expect for this 2022 Summer update?
What we expect to see on airbnb.com/2022-summer
Here’s what we read in Airbnb Q1 2022 shareholder letter:
Our culture of relentless innovation has allowed us to respond to this moment. In 2021, we introduced more than 150 upgrades across every aspect of the Airbnb service. On May 11, 2022, we will introduce a new Airbnb for a new world of travel.
Searching for travel online has worked the same way for the past 25 years: you enter a location and dates into a search box. But the world has changed. Millions of people are more flexible about where and when they can travel. With homes in over 100,000 towns and cities, Airbnb opens up a world of possibilities.
To help guests discover these possibilities, we’re introducing the biggest change to Airbnb in a decade.
With a completely new way to search, guests will be able to discover millions of unique homes they never thought to search for. And when they book, guests will have the confidence of knowing that Airbnb has their back each step of the way.
A completely new way to search
Our bet is that Airbnb will be merging its traditional search box (i.e. a user enters a location, a check-in date, a check-out date, and a number of guests) with its Flexible Search features. The goal would be to have one search box that serves both people who know what they want and people looking for inspiration about places or dates.
We can also draw on what Brian Chesky said during the Q1 2022 earnings call to guess what Airbnb is up to when it comes to its updated search box:
The challenge is this for 25 years, travel search has basically been the same. There’s a search box. And the search box ask you where you’re going and it presumes that you know where you’re going.
In fact, you have to come to these websites for intent. And then it ask you, when are you going? And so most the OTAs aren’t really in the business of inspiration. They’re in business of converting traffic into bookings. And this is good, but we always thought this — the Holy Grail of like online travel was to inspire people about where to go.
It’s been used 2 billion times and for a travel product to be used 2 billion times and people only use the trial product typically a couple of times a year is pretty unusual. So what are we seeing the results? I think the primary thing we’re seeing with I’m Flexible is we’re seeing a very strong amount of engagement. With I’m Flexible people see a lot more properties in a lot more markets. We’re seeing people book properties outside of a lot of the popular tourist destinations, and we’re seeing an ability to redistribute travel demand beyond the top popular hotspots like Rome, Paris, Las Vegas, New York, Los Angeles.
Here’s a quick recap of what Flexible Search is about:
Flexible Dates
In February 2021, Airbnb launched a flexible dates feature to support guests who have more flexibility about when they travel. Instead of having to narrow down exact dates for their trip, guests are able to search for a weekend getaway, a week-long vacation, or even a month-long stay “sometime in the next few months.”
We explained how interesting Airbnb’s Flexible Dates was to generate bookings from people who know WHERE they went to go, but not exactly WHEN. This is a compelling tool in times of uncertainty. It is also a nice feature for vacation rental owners listing their place on Airbnb, as it surfaces more properties in search results, even the ones that would have full and hidden on a specific search date. It also helps Airbnb create the illusion of more choices in regions where the supply may be low, by removing the date restrictions.
Airbnb says that:
Since the feature launched, there have been more than 90 million flexible date searches. Guests who used this feature converted at a higher rate than those that did not.
Flexible Matching
This search feature increases the number of search results by showing options that “almost match” the criteria entered by the user. For instance, a user may have indicated that they wanted a cabin with a pool, a hot tub, and an EV charger. Airbnb will show the options that match these filters, as well as some that are close enough to the results.
If one or several items ticked in the search filters is / are missing, then Airbnb will show it by naming and striking them through.
For this work, Airbnb needs to use data to know on what people are willing to compromise. We imagine that Airbnb can do it by building a machine-learning model that records what people initially looked for and what they ended up booking. It may indicate which trade-offers are the most frequent.
Flexible Destinations
Flexible Destinations seems to be available for only one specific category of accommodations: Unique stays.
Unique stays are a motley crew of property types that are usually the ones you see in travel articles: Treehouses, boats, yurts, castles, etc. In 2021, these one-of-a-kind places are in high demand, yet it can be tricky for Airbnb to show a satisfying number of options in search results:
- the supply for each of these property types (e.g. treehouses) is much smaller than for apartments and condos, for instance. So, you may end up with zero treehouses when looking for one in Paris, London, or Chicago.
- showing a relevant list of options that will get booked may sometimes mean that Airbnb needs to increase the geographical search area (e.g. all Nothern France when searching for a treehouse near Paris) or, on the opposite, to focus one specific area (e.g. the Pacific coastline when searching for beachfront properties nearby your home if you live in San Francisco).
- some markets may have specific property types that do not make sense to show in other countries, such as ryokans in Japan, trullios in Italy, and castles in Europe. Yet, to get more bookings, Airbnb needs to show ryokans to Japanese travelers. A one-size-fits-all approach to how property categories are organized is not optimal.
So, depending on the property type and where the user is, the range of geographical search will change. Thus, the number of destinations popping can vary.
More confidence for guests
In November 2021, the company launched for its hosts its free Airbnb AirCover program, which redesigned and extended features such as the $1,000,000 Host Guarantee.
In January 2022, the company announced that its Airbnb Guest Travel Insurance would be ready for Spring 2022 (” a new guest insurance product in partnership with a reputable insurance carrier.”)
Caught between host cancellation policies that Airbnb now swears it will enforce and an extenuating circumstances policy that excludes COVID-19-related travel restrictions, Airbnb guests may need a solution.
We think Airbnb’s travel insurance will not be free for guests (after all, Vrbo and Hopper make good money selling similar products), and why the Generali Group could be the “reputable insurance carrier” mentioned.
The Airbnb Guest Travel Insurance has been in the works for almost two years!
- On March 30, 2020, during an emergency live stream held with Airbnb hosts in the thick of the COVID crisis, Brian Chesky announced that the company was working on travel insurance ,
- In 2021, Airbnb discreetly launched its Travel Insurance page and started recommending guests purchased a travel insurance product at the end of its booking process. Airbnb here was merely redirecting travelers to third-party websites, such as the travel insurance aggregator InsureMyTrip in the US and insurance company Europ Assistance (part of the Generali Group) in Europe,
- In August 2021, during a quarterly earnings call, Airbnb mentioned working on opportunities such as “guest travel insurance”,
- On January 2, Brian Chesky confirmed in a tweet that the company was working on guest travel insurance.
Free guest travel insurance by Airbnb? Not likely.
Airbnb seems to see travel insurance as a money-maker. After all, Vrbo has been flogging insurance products to guests and owners for years, probably making a lot of money from its insurance provider Generali.
- In August 2021, during a quarterly earnings call, a financial analyst asked Airbnb leaders whether the take rate, currently at 15% on average, would increase in the future. The answers were quite interesting.
- First, Airbnb mentioned, “opportunities (such as) guest travel insurance”. So, the take rate could increase from commissions on travel insurance that Airbnb would sell to guests.
What could Airbnb’s Travel Insurance product look like?
Airbnb wrote that it was working on a “new guest insurance product in partnership with a reputable insurance carrier”. It could be the Generali Group and its Generali Global Assistance unit, because:
- Airbnb is already partnering with Generali to sell insurance through an affiliate program in Europe (under the Europ Assistance brand)
- Generali is one of the few global players who could help Airbnb roll out this insurance product, country after country (unlike a “guarantee”, an insurance product has to comply with strict regulations that differ from one country or even state to another.)
- Vrbo is already selling travel insurance products in the US created by Generali (formerly CSA Travel Protection)
Here’s what Vrbo’s insurance products look like, as created by Generali:
Host side: Unlock the next generation of Hosts
Airbnb needs to grow its supply. To do that, it needs to unlock the next generation of hosts, as per its 2022 strategy, which means finding new pockets of people who may not have thought of hosting a place on Airbnb before.
Airbnb can move upper funnel in 2022. This is about not only attracting more potential hosts but finding untapped pockets of people of could be good hosts. It can go from people who own properties but are not yet listed on Airbnb to people who need to make money but do not know that Airbnb could enable them to get more financial independence. This is what Airbnb’s strategy of unlocking the next generation of hosts is about.
Airbnb has the ability to identify pockets of homeowners who are looking for more money and can be good candidates for becoming new hosts. Such are the cases of teachers and healthcare workers. According to Airbnb, 20% of its hosts are already either educators or healthcare professionals. So, Airbnb wants more of them. To do that, it is creating specific programs, partnerships, and landing pages.
