Airbnb’s Problems: CEO’s Plan to Make It Better
In 2023, Airbnb’s CEO, Brian Chesky, has faced a series of challenges that have highlighted the platform’s underlying issues. The year began with the “Airbnbust” frenzy in March, as hosts voiced concerns about shrinking profit margins and a potential short-term rental bubble on social media. Additionally, Airbnb faced competition from Vrbo, which beat them to a long-awaited loyalty program feature. In September, New York City introduced strict regulations on short-term rentals, threatening Airbnb’s presence in a market that once accounted for 80% of its business. The return-to-office policies further hindered Airbnb’s flexibility, which had thrived during the pandemic.
By mid-September, Chesky unveiled several site improvements aimed at addressing the conflicting demands of guests and hosts. Guests wanted lower prices and better quality, while hosts worried about declining bookings and profits. These improvements focused on affordability, customer service, and transparency. They promised to display total prices per listing, including cleaning fees, enhance host insights for competitive pricing, and implement a listing verification system to eliminate fake listings. New search filters for king-size beds and pet-friendly homes were also introduced.
Chesky, who co-founded Airbnb in 2008, acknowledged that these improvements were necessary patches over deep flaws in Airbnb’s foundation. He emphasized the need to prioritize great listings, excellent customer service, and affordability before creating new features.
Here are six takeaways from a candid conversation with Brian Chesky about Airbnb’s future and its plans for improvement:
Airbnb’s Core Aspects Need Improvement
Airbnb has struggled with consistency and reliability in its service. Many users have encountered issues like subpar accommodations, malfunctioning amenities, or last-minute cancellations. Chesky admits that these challenges stem from the platform’s rapid growth without building a solid foundation. He emphasized the need for affordable prices, reliability, and effective customer support to create a great service.
Lowering Prices Benefits Hosts
While Airbnb seeks to lower prices to remain competitive, Chesky believes this isn’t a liability for hosts but a competitive advantage. Affordability attracts more bookings and allows hosts to earn more in the long run. Chesky aims to provide hosts with dynamic pricing insights to help them offer competitive rates compared to hotels.
AI for Quality Control
Airbnb is using AI for quality control, particularly to verify listings. Hosts are required to submit interior and exterior photos, which AI analyzes using computer vision technology to ensure accuracy. This approach helps eliminate fake listings, preventing issues when guests arrive at non-existent properties. AI is also employed to identify guests attempting to throw unauthorized parties.
Loyalty Program Innovation
Chesky believes in building a product that users love as the foundation of any loyalty program. While Airbnb may introduce a loyalty program in the future, it won’t follow the traditional points-based model. Instead, Chesky envisions a novel program that enhances the service’s quality when used.
Focus on Experiences in New York
New York has posed challenges for Airbnb due to strict regulations. Chesky acknowledges that the city’s share of Airbnb’s business has declined significantly. However, he sees opportunities in offering experiences rather than just homes. Airbnb’s platform can support services like guided tours, bar crawls, or photo shoots. Additionally, staying outside Manhattan may become a more affordable option if the supply of Airbnb rentals in the city diminishes.
Airbnb’s Solutions in Progress
Chesky believes Airbnb is close to turning the corner on addressing its core service issues. The company has introduced numerous upgrades and improvements throughout the year, with more planned for November. Chesky anticipates a significantly improved service by the next travel season, promising exciting developments from Airbnb in the near future.
In summary, Brian Chesky acknowledges the challenges Airbnb faces in terms of consistency, pricing, and quality control. The company is actively working to address these issues, with a focus on affordability and improved customer service. Additionally, Airbnb is exploring opportunities in experiences and remains committed to providing a service that users love. Chesky’s optimism suggests that Airbnb is on the path to recovery and innovation.