While commenting on its 2022 financial results, its first-ever profitable year, Airbnb uncovers its three strategic priorities for 2023:
- Make Hosting Mainstream,
- Perfect the core service,
- Expand beyond the core.
In this article, we’ll see how the company has already started attracting more occasional hosts, developing tools to get hosts to lower their prices, and adding offerings beyond short-term rentals, such as apartments for long-term tenants. Some paused initiatives, such as Experiences and Airbnb Plus, will expand again in 2023.
Make Hosting Mainstream
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.
Getting more supply has been a consistent part of Airbnb’s strategy.
- 2021 strategy: “Educating the world about what makes Airbnb different—hosting”
- Which led to the launch of the Airbnb commercials series “Made Possible by Hosts”
- 2022 strategy: “Unlock the next generation of Hosts:
- Which led to the launch of Airbnb Setup program to help new hosts start fast
In 2023, there are already clear signs that Airbnb is looking to make hosting mainstream:
Airbnb it campaign
The current “Airbnb it” campaign and the effort to get more supply from occasional hosts, from private rooms to guest houses, can be linked to this effort. The goal is to make a lot more people aware that they are can he hosts. Airbnb says that, since the launch of “Airbnb It” campaign, the number of visitors to their landing page for hosts has doubled. By driving more traffic to a page with an optimized funnel (Airbnb Setup) attached to it, Airbnb says that it’s been able to convert more lurkers into hosts.
Going after private rooms
Private rooms had been left behind by Airbnb but the company now sees them as a great way to re-introduce affordable options on the platform, as well as grow its supply.
Airbnb has been focusing on the development and promotion of private room rentals, offering users a comfortable and unique home away from home experience. Brian Chesky even listed his own private room in his apartment. The number of listings for private rooms increased by 31% from Q3 2021 to Q3 2022, indicating an upward momentum in its popularity. In addition, Airbnb created a new Private Room category as part of their 2022 Winter Release, allowing for even greater visibility and access to this form of accommodation.
Turning guests into hosts
Airbnb is tapping into its extensive customer base to grow its supply. Currently, 36% of newly available hosts started as guests on the platform. This strategy shows that Airbnb can effectively use its customers to drive growth.
For vacation rental managers, competing with this global platform can be a challenge. Unlike traditional vacation rentals, which usually offer only limited housing types, Airbnb offers a wide variety of accommodations worldwide–from bedrooms to villas. As such, any guest has the opportunity to become a host and contribute to the growth of the company.
Furthermore, it looks like Airbnb is even getting better at tapping into its guest base to grow its supply:
- In Q4 2019, 23% of guests became hosts
- In Q4 2020, 28% of guests became hosts
- In Q4 2021, 33% of guests became hosts
- In Q4 2022, 36% of guests became hosts
Better tools for hosts
We do not know much about this part yet, but we can expect other hosting tools to launch especially in May, for the 2023 Summer Release.
Perfect the core service
Airbnb wants” people to love their service.” Airbnb’s core service provides a marketplace for short-term stays, i.e., stays under 28 days. Here’s what the company is promising for 2023:
- improve community support,
- make it easier to find the right home for you,
- deliver greater value
Improve community support
Airbnb has demonstrated a commitment to supporting its community by launching initiatives such as the Airbnb Setup program. This initiative incentivizes hosts to support one another and helps the company scale up its resources with additional account managers and support team members.
With more hosts and travelers joining, Airbnb must ensure it is well-equipped to handle the increasing demand for vacation rental services. We imagine the company will hire more account managers for vacation rental managers and more support team members to help the whole community.
Make it easier to find the right home for you
With over 6 million listings, Airbnb has developed a range of tools to help its guests find the perfect accommodations. Airbnb Categories open travelers to new possibilities they may not have considered before, while their “I’m Flexible” option allows them to discover different locations and travel periods.
To further personalize the experience, Airbnb could consider introducing listing search results that factor in past bookings and ratings for previous trips. This would make it easier for guests to find the best accommodation for their needs.
Delivering greater value with improved pricing and discounting tools
Airbnb wants to fight the perception that it has become an expensive way to travel. In the coming months, Airbnb will introduce a series of new pricing and discounting tools with the intention of helping hosts understand the final pricing for their properties, so that they can offer competitive prices. This is especially important in these times when consumers are more price-conscious, as it allows hosts to lower prices and attract more guests.
Expand beyond the core
Here’s what Airbnb CEO Brian Chesky said:
We have some big ideas for where to take Airbnb next, and this year we will build the foundation for future products and services that will provide incremental growth for years to come.
Airbnb has already started expanding beyond its core. During the pandemic, it took its long-stay initiative to a grander scale. In 2022, it launched its Airbnb-friendly building marketplace for tenants. In 2023, the company wants to start expanding its Experiences business again. We may also see other new initiatives, as well as projects previously paused or stopped, make a comeback.
Long Stays is a successful addition to the core Airbnb product
In 2019, before the pandemic, the share of long stays (over 28 days) at Airbnb was 14% on average. Since then, the share has increased to about 18 to 21%, depending on the quarter. During Q4 2022, long-term stays remained stable from a year ago at 21% of total gross nights booked on Airbnb.
In April 2020, Airbnb did all it could to promote long stays on its platform, as one of the ways to save the company at a time when travel slumped dramatically. Today, Airbnb is capturing market share from remote workers and digital nomads, working with local authorities in multiple countries to open Remote Work Hubs.
Airbnb-Friendly Buildings to expand internationally
In 2022, Airbnb launched a marketplace of Airbnb-friendly apartments in 175 buildings in 25+ markets across the US. This is not a marketplace for travelers but one for renters looking for a place to live. Once a renter picks a place, she or he can then list it on Airbnb to offset some of the rent cost.
For Airbnb, this is an additional source of supply from occasional hosts. For rental companies, it’s a way to increase their profitability and finally leverage the popularity of Airbnb. Owners can opt to earn a share of revenue on every booking, resulting in increased revenue per square foot without raising the rent. Additionally, this initiative is intended to attract renters by offering Airbnb as an amenity.
Airbnb is looking to expand this initiative to international markets in the future, opening up a supply of long-term rental opportunities which would otherwise remain untapped.
Airbnb Experiences Relaunched
Airbnb Experiences are unique activities and tours led by local hosts which provide travelers with an opportunity to explore, learn and gain a deeper understanding of the destination they are visiting. Airbnb Experiences vary widely, ranging from art classes, walking tours, bike rides, cooking lessons, and much more that allow travelers to have an immersive experience in the local culture. Airbnb Experiences also provide a unique opportunity to meet fellow travelers while exploring a new place.
Today, you would be hard-pressed to find Experiences on Airbnb’s website or app. Real-life experiences were eclipsed by Online Experiences during the nadir of the pandemic when Airbnb was trying to survive.
Experiences have been a pet peeve of Brian Chesky, even though it does not bring much revenue. Here’s what he said:
“Airbnb Experiences is something that we’re beginning to really ramp up. And I think you’re going to see a lot more traction in that product in the coming years. “
Airbnb Plus relaunched?
In March 2020, Airbnb paused Airbnb Luxe and Airbnb Plus. Meanwhile, Airbnb Luxe became one of Airbnb’s Categories. As for Airbnb Plus, Airbnb is taking steps to relaunch it.
Starting February 2023, Airbnb Plus listing pages will be updated with a few key changes:
- Guests who visit an Airbnb Plus listing page will see a one-sentence highlight right below the listing title that explains Airbnb Plus: “Every Plus home is reviewed for quality.” Guests can click on this link to pull up more information about the program in a pop-up window.
- These listings will also feature an Airbnb Plus badge at the top of the page, and guests are able to select it when filtering for search results. This new design fits better with the rest of Airbnb’s redesigned layout from last year.
- Airbnb Plus hosts have more control over their listing page as well; they’ll be able to add photos, write a longer description, and refine the list of features and amenities without contacting Airbnb directly.
- It’s important to note that the Airbnb Plus program is currently only available to existing hosts who have already earned their badge—no other invitations are accepted at this time.
How about initiatives that got killed by the pandemic?
In July 2020, Brian Chesky, Airbnb’s CEO, announced that the company would be limiting investments in projects not related to their host community. This means a scaling-back of development with hotels and luxury apartments. Initiatives such as Airbnb Studios and Airbnb Transportation were stopped.
Airbnb Transportation, which meant for instance adding flights to Airbnb’s core product to turn it into a full-fledged online travel agency (OTA) was the most talked about. In a 2019 presentation, Airbnb even showed a mockup of what it could look like within its app:
Airbnb competitor Booking.com has spent the last 3 years trying to add flights to its core accommodation business. So far, the results are mixed, but it is persevering. Will this example deter Airbnb further from typing to add this complicated and low-margin business to its product line?
Airbnb Studios was part of Airbnb’s effort to become a travel content producer. In March 2020, the company killed its Airbnb Magazine. Apparently, it had ambitions to start producing video content, much like the energy drink brand Red Bull does, to promote Airbnb as a lifestyle brand. Given Airbnb’s heavy presence on social media and its PR bend, something along those lines could make sense.
No loyalty program! Brian Chesky finally gives an update on its pre-pandemic promise
Booking.com, Hopper, and Vrbo are leading the way for alternative sites to Airbnb with loyalty programs such as Genius, Carrot Cash, and One Key. Hosts and property managers who want to maintain direct bookings must stay competitive with the big online travel agencies’ advantages such as loyalty programs>
However, Airbnb still does not offer a loyalty program despite Brian Chesky’s promise of one several years ago. Though loyalty programs help retain customers, they can take a toll on margins unless operators find creative options like Booking.com to fund them (i.e., make hosts pay for the program by getting them to offer perks to travelers).
This is the message that Brian Chesky reinforced during the Q4 2022 results call:
The best loyalty program is building a product people love so much they want to come back. You don’t have to pay them to come back.
Other key Airbnb developments to note for 2023
Airbnb now has 1 million Superhosts out of 4 million hosts
Airbnb’s Superhost program has exploded in popularity since its launch in 2014. Over 1 million of its 4 million hosts have earned the distinguished Superhost status, and 25 percent of hosts have achieved this benchmark globally. But some countries boast more Superhosts than others: Puerto Rico tops the list with 41 percent of hosts having attained Superhost status, followed by the USA (34%), Korea (30%), the United Kingdom (28%), and Canada (26%).
Airbnb wants to grow its supply of private rooms, but it needs to ensure that guests stay safe when booking one. Solo travelers, particularly female solo travelers, are more vulnerable and can face greater risks in these kinds of intense interactions between hosts and guests.
Airbnb deploys its Solo Traveler Safety feature to accompany the growth in private rooms supply
Solo travelers are an important factor in Airbnb’s business growth. In 2022, around 25% of nights booked worldwide were from people traveling alone. Solo travel bookings on the platform rose by 33%.
To address this issue, Airbnb has released the Solo Traveler Safety feature, which is available in over 50 languages, following successful pilots in English and Hindi. This feature provides more safety advice to solo travelers who book either a private or shared room.
Airbnb’s Solo Traveler Safety feature is designed to provide solo travelers with three key features when booking a private or shared reservation. These include:
- Expert tips to help stay safe when traveling solo
- An easy way to share their Airbnb itinerary with anyone they choose
- Prompts from Airbnb suggesting important questions to ask the Host about their listing and neighborhood.
In conclusion, Airbnb’s strategic priorities for 2023 are very ambitious. The company wants to make hosting mainstream by turning guests into hosts and providing better tools. They also plan to perfect their core service by improving community support, making it easier to find the right home with improved pricing and expanding beyond their current offering with longer stays, Airbnb-Friendly Buildings, Airbnb Experiences, and more. Additionally, initiatives that got killed by the pandemic will be re-evaluated while Brian Chesky has given an update on the loyalty program. Finally, Airbnb now has 1 million Superhosts out of 4 million hosts and is deploying Solo Traveler Safety feature to accommodate the growth in private room supply. All this paints a picture of a company aiming for success in a much different climate than what it was pre-pandemic.