AP – Convinced that the boom in leisure travel is permanent, Airbnb aims to expand its listings by convincing more people to turn their homes into short-term rentals.
The company said on Wednesday that it will increase the amount of liability coverage for hosts, up to USD3 million, in a play for owners of nicer houses in high-cost places such as California. It will also pair newbies with a “superhost” to guide them through the process of becoming a short-term landlord, from signing up to welcoming their first guest.
More listings would not seem to be Airbnb’s biggest challenge.
Chief Executive Officer Brian Chesky said the San Francisco company is taking steps to make the price more transparent when consumers browse Airbnb listings, and he predicts that will reduce sky-high cleaning fees that many hosts tack on well into the booking process – a major complaint of consumers.
The company also continues to try to crack down on large parties at rentals, a few of which have turned violent. And it faces efforts to increase regulation of short-term rentals.
Through it all, Airbnb has fared better than most travel companies during the pandemic. This month, it reported a record USD1.21 billion profit for the third quarter. Its stock fell, however, because earnings and bookings were less than Wall Street expected and the company gave a cautious fourth-quarter outlook.
Investors worry that consumers paying more for food, gas and housing – and facing predictions of recession – will cut back on discretionary spending like travel, hurting Airbnb.
Some current hosts are worried that might already be happening. Last month, a post on a Facebook page for Airbnb “superhosts” asked, “Has anyone seen a huge decrease in bookings over the last three to four months? We went from at least 50 per cent occupancy to zero in the last two months.”
Other hosts on social media have suggested theories ranging from a fragile economy to pent-up travel demand finally running out, and some think the problem might be that Airbnb already has too many listings.
AirDNA, which tracks short-term rental numbers, said Airbnb listed nearly 1.4 million rentals in the United States (US) in September, a 23-per-cent jump from a year earlier and nine per cent over 2019. Nearly two-thirds were added since 2020. The trends are similar for global listings.
Chesky said in an interview that Airbnb has enough hosts now – he didn’t say it has too many – but needs more because leisure travel will keep growing. And, he said, a recession could push more people to turn their homes into Airbnbs. After all, he likes to point out, Airbnb launched during the great recession in 2008.
“People are pulling back spending in tonnes of areas, but not travel,” he said. “And with a looming recession, we felt like more people than ever are going to want to make extra money.”
Potential hosts sometimes hesitate, Chesky said, because they are uncomfortable having strangers in their homes. The company’s response is to triple the amount of coverage for hosts – from USD1 million to USD3 million – against damage, including to vehicles, boats and a wider range of art on the property.
Chesky is betting that will persuade more owners of nice homes to list them on Airbnb.