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Airbnb CEO Asks Hosts to Lower Their Listing Prices

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Airbnb CEO Brian Chesky is asking hosts on the short-term rental platform to lower their prices. In an interview with Bloomberg on Monday, Chesky said that he wanted the app to be able to compete with hotels.

“We want prices to move and to be more competitive vis-à-vis a hotels—that is really important. When our hosts provide better deals, they tend to make more money.”

Part of his solution includes giving hosts proper rate comparison tools for nearby hotels, which the app currently lacks.

“We’re [currently] giving tools to hosts to compare the prices of their listings to others in their neighborhood—and while we don’t yet have a hotel comparison, we do encourage them to look at rates for hotels in their area just so they have a sense of what travelers are getting on other platforms.”

According to Chesky, the company will also work to fix problems with pricing, transparency (by not showing customers the total price for each listing), and fake listings. Chesky’s remarks come as Airbnb has had a tumultuous year.

On the pricing front, the promise is to provide hosts with insights that ensure competitive nightly rates while also showing customers the total price per listing. These prices will include clear and lower cleaning fees, a frequent point of contention.

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Additionally, the app’s search feature was enhanced with new filters for king-size beds and pet-friendly homes. There is also a new listing verification system to decrease calls to customer service by identifying and removing fake listings.

“We need to get our house in order,” Chesky says.

“We need to make sure the listings are great, we’re providing great customer service, and we’re affordable. And I’ve told our team that we can get back to creating new and exciting things once we’ve fixed that foundation.”

The year 2022 marked the first year of profitability for the business. However, in March 2023, many hosts took to Twitter to express their frustration with declining bookings, increased competition, and shrinking profit margins. The perceived short-term rental bubble was dubbed “Airbnbust.”

Jamie Lane, an economist at vacation analytics firm AirDNA, told Insider in 2022 that there was an increase in supply, causing demand to spread out over more listings, leading to “occupancy decline.”

In September 2023, New York City also cracked down on short-term rentals, implementing a set of regulations that made it much harder for users to book an Airbnb rental.

The new rules mandate hosts register with the city to guarantee that their listings adhere to the city’s occupancy and building code regulations. According to Bloomberg, the company is expected to lose thousands of listings in one of its biggest markets.

Officials claim that illegal short-term rental listings, often with inhabitable conditions, contribute to New York City’s affordable housing crisis by taking homes off the market.

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Chesky claims that part of the app’s current struggles are due to the platform originally being “designed for a much smaller company,” before rapidly growing in popularity.

“To use a precise metaphor, it’s kind of like we never fully built the foundation. Like, we had a house, and it had four pillars when we needed to have 10.”

The company is using AI for quality control of its listings. According to Chesky, hosts are being asked to upload photos of the property’s interior and exterior as part of the listing process, with the intention of using computer vision technology to analyze the images and compare them to other databases, such as Google Earth, in order to generate a trustworthiness rating.

Any listing with a low score is sent to a human reviewer.

Chesky told the Financial Times that the company will also venture beyond short-term rentals, including offering long-term rentals.

“Travel is our sweet spot. Eventually, the big frontier for Airbnb is to go beyond travel. There’s an eventual opportunity for Airbnb to become a greater part of your daily life. Not just once or twice a year.”

 

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What Does Being An Airbnb Host Really Entail?

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Airbnb is one of the biggest unicorn companies taking over the world right now. Unicorn companies are any business that can be valued at over $1 billion, and it didn’t take long for Airbnb to reach that status. Now, there’s a whole slew of online property rental services that allow property owners to temporarily rent out their homes to individuals looking for a little getaway. However, Airbnb still remains the most lucrative out of all of them. 

Being an Airbnb host may not have ever seemed like a feasible idea to you before, but when you consider the benefits, it almost seems like too good of an opportunity to pass up on. Granted, you will need to ensure you have another place of residence to stay at while your property is being rented out, however, what you earn from Airbnb itself might be convincing enough to do so. 

Obviously every space is different, and will be valued according to specific qualities such as location, room numbers, amenities, and historical trends that local competition has priced itself at. Most first time Airbnb hosts use the startup Eliot & Me or any other rental pricing calculator to determine how much they should be charging per night to renters. 

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If you have access to any local real estate agents, don’t hesitate to ask them to appraise your property for rental pricing as well. Individuals in the real estate industry will know better than anyone what your home should be valued at, even for short-term renting. Airbnb customers can make anywhere between $2,000 – $10,000 after renting their properties out just once, depending on the duration of stay and cost per night.  

Airbnb prides itself on professionalism and keeping the renter/client relationship cordial. Individuals who rent out their homes are automatically paid exactly 24 hours after a guests check-in time. This is meant to ensure that neither party is scammed or has any major issues before a concrete money exchange is made. 

Many individuals who are privileged enough to rent out one of their properties multiple times in a given year can rely on Airbnb hosting as their primary source of income. However, it’s important to note that while this sounds like it may be an “easy” career path, as a host you need to understand that this is still a job, and you’re expected to run your “business” as a host efficiently, just like any other job. 

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So what are some of the responsibilities that come with being a host? First and foremost, you should respond rather promptly when an individual states their interest in renting out your property. Answer any questions clearly and concisely, remember, how you interact with each person who rents your property will be reflected in their online reviews afterwards, which future clients will see. 

When you actually lock in a rental for the future and it comes time for your new guests to arrive, make sure your property is clean and everything is set up as expected before their arrival. Any accommodations that you listed on your profile should be pre-prepared for use. Accuracy is the key when it comes to hosting, so make sure every room matches its picture and your personal belongings are out of sight. 

The pictures on your profile are arguably the most important part of your listing, as well as your ability to host. Obviously these photos will play a major role in your potential guests decision making process, so make sure they really showcase the essence of your property. You don’t have to live in a huge mansion to properly show off the pieces of your property that anyone would enjoy on a temporary stay. 

Honesty, professionalism, and promptness will get you far in any industry, and when it comes to renting out your own house, these factors couldn’t be more relevant. If you’re still unsure if being an Airbnb host is right for you, do some research, ask around and find people who have rented out properties for short-periods of time before. Even if it wasn’t through Airbnb, they’ll still have amazing insight into what it’s actually like to leave your home for a little while for financial gain. Talk to real estate agents and search up some chat forums on the topic, before you know it, you’ll be ready to host your first guests!