NEW YORK — Brian Chesky, the CEO of Airbnb, appeared on-screen, as if summoned to wring out every ounce of his company’s toil in front of an assemblage at the Skift Global Forum. It was a near facsimile to last year when the anything-but-diffident Chesky also piped in via video feed rather than in person; the only physical change his now hirsute countenance.
But a lot has changed for Airbnb other than its CEO’s facial hair—it’s not just about Homes, anymore.
In May, Airbnb launched Services and (relaunched) Experiences after a pandemic false start—all part of a redesigned app. Why limit yourself to just a place to lay your head when you can hire a professional chef to cook a meal or engage a hair stylist to create the perfect balayage? Chefs and hair stylists are part of Airbnb’s initial 10 categories of services with more promised to come, Chesky said. “A lot of people like massages: If you can get food delivered to your door, why can’t you get a massage delivered to your door?” he said.
If it sounds like the Airbnb app is trying to be a one-stop-for-all-things app, like Amazon, you aren’t far off. In fact, Airbnb took cues from the retail behemoth, which refashioned itself from a bookseller to a global, mammoth seller of everything. Now, for instance, someone not on vacation can hire a personal trainer to their home (another service category). “I think that a bit more of our business is going to be local use,” Chesky said. “There’s a lot of opportunity to capture local demand.”
Airing It Out
For a mature company like Airbnb, which has now surpassed two billion guest arrivals, the need to find new streams of revenue has never been more essential. It’s something Chesky is all too aware of, having admitted that Airbnb’s growth path has not been satisfactory. After years of meteoric growth, Airbnb came back down to Earth, with revenue growth slowing from 40% in 2022 to 18% in 2023, then to 12% last year. For the current quarter, growth is expected to be between 8% and 10%.
“I’m not happy about where the growth rate is,” Chesky said. When he launched Airbnb in 2008 with his two roommates it became, he said, a hyper-growth company. “We grew the company like a rocket ship.” It’s lost a little propulsion. “We should be growing significantly faster—at least in the teens. I aspire to run the kind of company that is growing at more than 20% one day. To be able to do that, we need to layer on many businesses. We need to essentially accelerate our business, then we need to be layering on other businesses, and that is essentially the growth algorithm that we must get to.”
The reconfigured and relaunched Experiences rises from the ashes of the pandemic, as Chesky explained. COVID cut Experiences short after its 2016 launch; thereafter, Airbnb stopped investing in it and instead pared the company down by roughly half. Chesky is matter of fact about it. “We basically said we’re not experiences. We stopped investing in it. We did a massive layoff. Then we went public [in 2020] and we have essentially spent the last five years rebuilding the company from the ground up.”
He thinks this time Experiences will be different. “We’re going to invest in it. We’re not expecting another global pandemic, and even if there was one, this time, we have the money to invest in experiences,” he said, adding that Airbnb is now putting money behind advertising Experiences, which it didn’t do prior. Airbnb recently launched its first ads for Services and Experiences.
“Airbnb is one app, one brand, one customer,” Chesky said. “We can actually take these small businesses, like Services and Experiences, and we can put marketing behind them while still marketing our core business.”
Beyond Homes
Homes, not hotels, has been Airbnb’s principal business up to now, but the company leaned into hotels when it acquired HotelTonight in 2019. HotelTonight is a hotel-booking service that originally was focused on last-minute or spontaneous stays, but has shifted to allow bookings father out. Even when Airbnb launched in 2008, onlookers posited that it would evolve into a traditional online travel agency, like Expedia, like Booking.com, in the sense that it offered services but didn’t own or manage the assets that delivered the services. Hotels, it followed, would be part of the platform—and some have for years, taking advantage of Airbnb’s global reach. Now, to hear it from Chesky, Airbnb is all-in on hotels.
“We are now serious about hotels,” Chesky said, adding that the groundwork it laid building Services will be applied to hotels. Chesky said the focus initially will be more on boutique and independent hotels rather than globally branded properties. “What we found is that the vast majority of people that come to Airbnb, if they don’t find a home they like, they go to another website and book a hotel. If we have hotels there, they’re going to get a significant amount of bookings.” (Airbnb, Chesky said, is accessed by 1.6 billion devices a year.)
Chesky said that hotels, especially independents, also like its 15.5% commission structure, which he called the lowest in the industry. “There’s an entire market segment of people that aren’t really being served or not being served properly, and we think we can serve them through collecting the very best boutiques, the very best independents and building a first-class Airbnb interface to be able to see these hotels and give them a very compelling commission rate.”
Hotels is not destined to become its own category, according to Chesky, rather it will be integrated into the core Homes tab.
Other shifts include a new commission structure that abandons the prior split-tier structure. Now, hosts bear the entire cost, which mimics other OTAs. Starting in late 2025, many hosts using property management systems (PMS) or those on existing single-fee plans will pay a flat 15.5% (16% in Brazil) commission deducted from their payout. In addition, Airbnb users now see the full price of a stay, inclusive of fees and taxes. “A lot of guests complain about the taxes, the cleaning fees, the service fees—there’s a lot of drip pricing. Let’s just have one price,” Chesky said.
Airbnb is making itself over as not just a purveyor of home-share accommodations but a superstore, a Walmart, an Amazon— open an app and everything travel related, and more, is at your fingertips. Will Chesky’s blueprint succeed? “Investors buy into results, not just ideas,” he said.