US: Airbnb is focusing its attention on strengthening its long-term rental business, as the company eyes up new revenue streams and growth opportunities to expand beyond its core short-term rental offering.
Speaking at Skift Global Forum in New York City, Airbnb co-founder and CEO, Brian Chesky, said that the segment – referring to rental stays of 28 days or longer – represented a “huge growth opportunity” for the home-sharing firm, after seeing an incremental rise in bookings between 30 and 90 days in recent years. He added that long-term rental stays now accounted for between 17 and 18 per cent of Airbnb’s overall business, as opposed to pre-pandemic levels of 13 to 14 per cent.
The move is being seen as a response to the introduction of increasingly draconian restrictions on short-term rental activities in markets across the world where Airbnb is active. Cities such as New York City and Barcelona are taking steps to outlaw short-term rentals altogether, while other destinations such as Budapest, Athens, Lisbon, Madrid and more are banning Airbnb listings in certain districts or halting new licences to open up affordable housing supply for residents.
While the company’s diversification into new verticals will make its operations more resilient in the face of stringent regulations, Airbnb is also adapting to cater to evolving consumer behaviour, guest preferences and working and living habits which have shifted since Covid-enforced lockdowns in 2020. The firm has established a strong worldwide brand recognition for its footprint in the short-term rental industry and it has spotted an opportunity to do the same in the extended stay market, especially as travel, hospitality and real estate segments continue to blur.
Chesky added that sponsored home listings could also prove to be profitable “billion-dollar” revenue opportunities for Airbnb in the future, as he alluded to successful models for monetisation employed by sharing economy counterparts such as Booking.com and Uber.
At last month’s second quarter earnings call, it was revealed that Airbnb had surpassed eight million active listings, driven by “continued growth across all regions and market types”. However, at the same time, it removed more than 200,000 listings that had failed to meet its guests’ expectations as it bids to deliver more consistent, high-quality stays.
Chesky hinted that the company will need to do “multiple new things” to broaden its consumer base and grow its wider appeal, including introducing a co-hosting marketplace this autumn to unlock untapped inventory and connect homeowners with no time to manage their listings with those who do.
Beyond strengthening its presence in the long-term rental segment and debuting co-hosting, Airbnb is set to relaunch its Experiences program next year, fresh off the back of unveiling Icons, a new category of experiences hosted by stars from across music, sport, film and more.
Prior to that, Dave Stephenson, chief business officer of Airbnb, told Bloomberg that the company was considering diversifying into “services that will make it better for guests to stay in Airbnbs”. This includes potentially adding luxury-style services such as personal chefs, massages, mid-stay cleaning, easier check-ins, spa services and refrigerator stocking.
