Airbnb bets big on rooms, new checkout, pricing displays

Airbnb is going back to its roots – renewing its focus on individual rooms within larger properties, a concept CEO Brian Chesky calls “the soul of Airbnb.”

The introduction of “Airbnb Rooms” – with 1 million listings in the category - is part of the company’s Summer 2023 release, which includes dozens of other updates for guests and hosts such as enhanced displays of prices and checkout instructions.

Airbnb’s global head of operations, Tara Bunch, said there are many reasons this is the “perfect time to reinvent the [rooms] category.”

In 2022, the company said bookings of private rooms on Airbnb increased 40% compared with 2021 when interest in whole homes was still high due to concerns about private, more COVID-safe environments. 

Further, Bunch said, the economic challenges many consumers are facing such as inflation and job insecurity makes the affordability of a private room even more attractive. According to Airbnb, more than 80% of private rooms cost less than $100 per night with a global average of $67 per night.

“It provides a very affordable way to travel, even less expensive than hotels,” Bunch said.

And for hosts, she called the opportunity to put a single room on Airbnb a “financial lifeline.”

The company also expects the new Rooms category to appeal to travelers who have felt isolated during the pandemic and are looking for ways to “connect with people and have authentic experiences.”

Airbnb said all of the updates announced today are based on feedback from guests and hosts. In the case of Rooms, the company said guests have indicated a desire to know more about who they are staying with, so the listings will now include a “host passport.” 

By clicking a small booklet icon on Rooms listings, consumers can learn not just the host’s name and number of years hosting but also what Airbnb calls “fun facts” hosts choose to share, such as where they went to school, where they work, languages they speak and their interests and hobbies.

All Rooms listings will include privacy details such as whether the bedroom door has a lock, whether bathrooms are shared or private, whether there is access to shared spaces such as a kitchen and whether people other than the host will be in the home.

And the company is confident it is uniquely positioned to capture interest from travelers, primarily individuals and couples, who may be interested in this type of listing.

When asked who Airbnb defines as its competitors for this type of booking, Bunch said, “If you look at a Vrbo they only do whole homes. So I think other than Craigslist or something, we really are uniquely positioned in this category and we are a trusted brand, unlike Craigslist. And I think we’ve done rooms in a really amazing way in terms of really spelling out for a guest what they can expect when they get there and what type of a setup they’re going to have.”

But Phocuswright senior analyst Madeline List said the new Airbnb Rooms offering will come up against headwinds of demand and some of the “common trust pitfalls” faced in other parts of the sharing economy.

“I think there are niches of bold and curious travelers who the product can speak to, but I would expect many potential guests to express concerns over security and even lack of privacy in a shared accommodation,” List said.

“We see in Phocuswright's research that security is a general concern for the short-term rental category even with full homes, given that standards can vary so much from property to property and host to host.”

More transparency for prices and checkout

In response to concerns from guests about excessive checkout instructions and lack of transparency in pricing, Airbnb is also changing the way both issues are handled in its platform.

In November the company announced it had begun advising hosts on which checkout tasks are appropriate to request and also asked that those chores be displayed before the booking is completed. Now all listings will show checkout instructions pre-booking, based on a checklist that hosts have to complete. And before leaving a property, the platform will send a reminder to guests about the expected tasks.

“We are really working hard to make sure we guide hosts to ensure they are not creating unnecessary checkout requirements on guests,” Bunch said. And guests will have the opportunity to notify Airbnb in the review process if the checkout requirements were different than what had been stated in the listing.

“Our hope is to create some guardrails but also encouragement and, in some cases, perhaps penalties if it goes off the rails.”

Also among the more than 50 updates launching today for guests and hosts, Airbnb has enabled the option to view the total price of a stay, inclusive of all fees but before taxes, for all listings on the platform. The “total price” toggle launched as a trial in November, and Bunch said they have found that by putting this control in the hands of customers it can spur hosts to be more fair in their pricing.

“In some cases we’ve heard that hosts were charging exorbitant cleaning fees … and based on that feedback we feel like by presenting it upfront it will really motivate hosts to be competitive in their cleaning fee pricing, because now it will be front and center and they’ll be compared to another listing that may have a different cleaning fee,” she said.

“It’s going to drive some good competitive and fair behavior.” 

Airbnb’s future plans for generative AI

And while not part of this round of updates, Bunch said Airbnb is actively developing solutions that use generative AI such as ChatGPT.

“If you are any company right now not thinking about and building it into your roadmap, it’s a little bit like missing internet," she said. "This is going to be big over the next few years, and I think it’s going to be big faster than we’ve seen probably any technology adoption curve in the history of mankind.”

While Airbnb already uses AI and machine learning for reservation screening and fraud detection, Bunch said generative AI will open new opportunities for “interacting in search and interacting in support and help in ways that are just completely unique and I think are going to unlock unbelievable capabilities … and anyone who takes five years to get there is going to be left in the dust.”

Additional Airbnb updates

Also among the updates announced today – discounts for stays of longer than a month in the United States when paid with a linked bank account, discounts for all stays over three months and installment payments for guests in the U.S. and Canada through a partnership with Klarna.

Airbnb is also updating its support services for guests just before, during and right after a stay. Bunch said the company is confident 90% of these calls will now be answered in under two minutes, to address the urgent issues that may arise while on a trip.