Airbnb’s Brian Chesky Is Done With Back to Basics

Airbnb CEO Brian Chesky says 2023 marks the end of the company’s focus on perfecting its core business. He’s spent the past two years gathering feedback from hosts and guests to get the basic product right. Now, he says he’s ready to move forward and launch new things. 

The company, founded on the idea that homeowners could make extra cash by renting out a spare room, surged in popularity during the pandemic. 

The aftermath, however, seemingly left everyone complaining. For guests it was the cleaning fees. For hosts, a blow to their profit margins as the world returned to the office. And municipalities – most notably travel and tourism behemoth New York City – started enforcing regulations. 

Skift spoke with Chesky as Airbnb was releasing a new round of product features. In our interview, Chesky addressed the biggest challenges Airbnb faces and what comes next. 

The top takeaways are below, edited for clarity:

Is New York City the Canary in the Coal Mine for STR Regulation?

The reason I thought [New York City] was a cautionary tale is because a lot of people ask me are other cities going to copy? I said, well, actually, it turns out most cities – at least most big cities, 80% of big cities –  talk to other cities. 

And so London and Paris and Los Angeles and Chicago and we can go down the list –  they’re all different, but they all have found a solution that New York has not found. Where they have, typically, a registration system where they say how many nights a year you can rent. And if it’s a city with limited housing that might be a little more restrictive. 

If it’s a vacation destination, they’ll probably have no restrictions because they live and die by that. Two-thirds of homes on Airbnb in the United States or according to census data are where there’s no hotel. So if the city were to restrict Airbnb, no one’s ever visiting that city. 

And I don’t think you ever want a town or city in the world, that I’m aware of, where you want it flooded only with tourists. But I think the inverse may also be true. 

I don’t think there’s a lot of communities where you never want an outsider. When’s the last time, like, ‘no outsiders allowed’ was that good and healthy for a community? So I think the right balance is to redistribute travel. 

I think overtourism isn’t too many people traveling.  It’s too many people going to the same place, at the same time. 

They should probably go to small towns. I remember I went to Paris and the Minister of Tourism told me, we want people to not go to Paris but to go to other small towns in France and spread out and not overwhelm them. I think the problem is if everyone goes to one town, and I think that certain towns get fashionable, and it’s not even really an Airbnb thing.

I mostly want people to know that we’re going to collaborate with cities. We’re going to try to make them stronger. If they need to put sensible regulation on the books, we’ll work with them and you know, it might work for hosts or it might not but you know, if it doesn’t work, then travelers can go elsewhere. 

More than 50% of our hosts are women, the top professions are school teachers, healthcare workers, students, like it’s a very diverse audience. 

It’s very much the people that politicians say they’re fighting for. 

And even in New York, I felt like, if only they could really spend time with the hosts. They realize, wow, you’re some of the same people that I meet in another context – not all the time – but people are surprised. 

And I think a year from now, by the way, hold me to this prediction. Next release will probably be next October. We’re going to sit, if not in this room, a different room. And I want you and I to revisit if hotel prices are higher or lower than this time. And then are housing prices higher or lower? You’d think the theory is that if we’re driving up prices, if restricted, the prices will come down. If it were meaningfully that, we should check in a year. And we’ll see.

My prediction is that hotel prices will be up. I will predict that. They’re up 8% year over year. I bet you will be up more than just a few percent year over year. I predict housing prices will be up, not down. Check-in in a year. Let’s see.

Brian Chesky at the 2023 Skift Global Forum: Cleaning Fees, NYC, and AI — Full Video

Will Airbnb Always Have Cleaning Fees?

Imagine we told you, you cannot have a cleaning fee. And you’re like, ‘well, the problem is this is a one time cost and I need to somehow amortize it.’ So if we ban cleaning fees what would happen is no one would accept one night, or two night, or three night reservations. Like that’s what would actually happen. And then everyone says, ‘well, how come I can’t use Airbnb for less than a certain amount of nights?’ So there’s all these like secondary effects. So we didn’t want to ban cleaning fees. 

We do want to make sure that people aren’t surprised, but what we don’t want to do is incentivize hosts to have a really low nightly rate and then have a high cleaning fee and then use that to appear cheap, and then progressively look more expensive. 

So there’s a number of things we’ve done. The first thing is the upfront pricing. Now 260,000 listings have removed or lowered their cleaning fee. Three million listings globally don’t have a cleaning fee. 

So that upfront pricing has, I think, incentivized behavior. We’re going to move more and more guests to turning the filter on and there’ll be a day where there will be no filter, it will be just upfront. 

No one knows that we show our prices different. We have the toggle as a transitional period to train people that we show prices different than our competitors. 

But over time, I do want to move to total price and then you charge whatever you want your fixed costs and if it’s like expensive for a one night because of the cleaning fee, the guest just knows and maybe maybe your house is not great for one night stays like maybe it’s better for two, three night stays. 

But guests have that choice and it’s a dynamic search. So that’s the main thing. We also just have really good educational tools for hosts. And you know, the other related question is like, I don’t want to tell hosts what to charge, but you want to give them more information. We have more data than any host does. So if we can give you the data to be better, I think that’s the solution.

Are Experiences the Next $100 billion Idea?

Can I give you an analogy? Do you remember the term ‘chatbot’? How it was like a phrase and just everything was gonna be a chatbot? 

And then it like never happened for six, five years. Never heard about chatbots. And then last November ChatGPT came out – that is a chatbot. And now, everybody knows this stuff. 

You’re not calling it a chatbot – you’re calling it AI. But it’s a chatbot. 

And so I feel like experiences is a little bit like that.

It is going to have this Cambrian explosion within travel. But we’re in the chatbot phase, not the chatGPT phase of experiences. 

So I’m not gonna say we’re gonna do it. 

I think there’s a $100 billion company that can be launched just doing experiences. I don’t think we’ve cracked it. I think we’ve created something special. But if we cracked it, it would be the size of Homes. 

I think we’re gonna keep trying. 

We’re working on some new takes on it. And we’ll have some updates. I think there’s a huge opportunity there. I just think I think all of us are early. And I don’t think anyone’s cracked it. We haven’t cracked it – not at scale.

Is Airbnb Ready to Move to What’s Next?

We’re there in the sense that we’re not perfect. The one thing I know, so long as I’m in travel, someone’s going to complain and say we should do better. That’s the business. It’s the hospitality business. 

Like you can be a five-star hotel and Michelin three-star restaurant and someone’s gonna complain that something came out a half second too late. So you’re in that industry. So the first thing is that we’re never going to be perfect. And we have the privilege that lots of people complain – as long as not too many – because it means we have the privilege of having a lot of customers. 

Every release going forward, we’re probably going to have elements of answer and feedback from the community. We’re going to keep listening. 

But starting next May, you’re going to start to see new things. I want to set expectations. It’s going to be a gradual shift. But each release, I think you’ll see more new things than the release before. 

So this is the turning the corner moment. I’ve been very clear to people, 2023 is the end of this chapter of really perfecting our core, but we’re gonna begin 2024 – especially 2025 –  unveiling lots of cool new things.