Airbnb needs to “get its house in order”, one of its CEO’s has told shareholders, in an earnings call that called into question the accommodation website’s core value proposition.
CEO Brian Chesky, who co-launched the market disrupter in 2008, says Airbnb was founded with the tagline ‘a cheap, affordable alternative to a hotel.’ But recent research has shown that hotels generally beat Airbnb rentals on pricing, something backed up by user reviews complaining that Airbnb is not always competitive and that its pricing structures, which can include service add-ons or cleaning fees, are not transparent enough.
We want prices to move and to be more competitive vis-a-vis hotels – that is really important.
Brian Chesky, CEO of Airbnb, told Bloomberg
Making matters more interesting, the rental website marketplace has seen other new entrants recently, with start-ups such as bnbfinder attempting to beat Airbnb at its own game. Bnbfinder’s mission is spookily familiar: to “reduce costs and bring hospitality back to the vacation rental industry”, by cutting out service charges and raising the quality bar by only allowing professional listings.
Initiatives to lower prices
Airbnb is responding with initiatives to bring its prices down. “The primary reason people came to us is because it was a better value than a hotel,” Chesky explained. “And we still think that’s a core value proposition that we have to offer.” Action undertaken to lower costs has been targeted both at hosts and at guests and, Chesky says, includes:
- The lowering or removal of cleaning fees by 300,000 hosts, after guest complaints.
- Clearer communication of “total costs” before any stay is booked, including a breakdown of all charges, before any discounts.
- The improvement of features allowing hosts to see how the price of their property compares to others locally, with hosts urged also to check against local hotel prices.
- Discounts for long-stay (weekly and monthly) guests to bring Airbnbs more in line with local long-term accommodation prices.
New filters and AI to verify listings
Accommodation quality and customer service, not just pricing, are also being looked into. “We need to make sure the listings are great, we’re providing great customer service and we’re affordable,” Chesky said.
Moves to better guarantee quality and customer satisfaction include 50 upgrades being made just this month, such as the introduction of artificial intelligence using Google Earth imagery to verify listings and eliminate fake offers.
To help guests find the right property for them, filters are also being improved, giving users the ability to look for “pet-friendly” homes only, or to search by details such as bed size.
