Airbnb (ABNB) is betting that a continued economic downturn will provide a tailwind for the travel company to expand its pool of hosts, looking to earn some extra income.
In fact, CEO Brian Chesky said he’s already seeing a shift in behavior on the platform, reminiscent of the Great Recession when the company was first founded.
“I think this is going to be in some ways similar to 2008,” said Chesky, speaking to Yahoo Finance Live (video above). “A lot of people that weren’t considering hosting are probably now considering it.”
That change prompted the San Francisco-based firm to launch Airbnb Setup this week, a service that matches new hosts with Superhosts, to offer one on one guidance on how to list a property on the platform. The company also expanded its AirCover program to offer hosts more protection, including guest identity verification, reservation screening, and $3 million in damage protection.
After spending the first half of the year working out of Airbnb properties himself, Chesky is listing a room from his own San Francisco home on the platform, to prove to users that hosting isn’t risky or challenging.
“I wanted to show people, if I can do it, they can do it as well, make it kind of accessible. And I thought it’d be really fun,” Chesky said. “It’s my real house. You’ll be staying in a private room. You’ll be staying with me and my golden retriever Sophie.”
That marks a return to the origins of Airbnb. Launched in the depths of the financial crisis, Chesky and his co-founder Joe Gebbia listed their own property as the first hosts on the platform.
Fourteen years later, Airbnb boasts more than four million hosts, who have booked more than one million guests around the world. Chesky said the interest in hosting has only accelerated with the economic downturn, as more people look to earn extra income to cushion the pain from the rising cost of living.
This year alone, more than 30 million people have visited the site, to learn about hosting opportunities.
“Had it not been for the Great Recession in 2008, I can’t say with certainty that Airbnb would have taken off,” he said. “But in a recession, people were willing to change their behavior. They’re willing to do things they weren’t willing to do before the recession, like list their home and allow other people in it.”
Keeping those listings affordable, are increasingly becoming challenging, even as Airbnb looks to remain cost competitive against rival players in the hospitality industry. The average price per night for an Airbnb stay has jumped 40% from pre-pandemic levels, with the average daily cost of a stay totaling $156 in the second quarter.
Chesky said supply constraints have contributed to the spike in prices, along with a big jump in the cost of cleaning fees. Average fees for cleaning on short-term rentals were up nearly 30 percent last month, according to data from AirDNA, compared to the same period in 2019.
To address those concerns, Airbnb has made changes to improve transparency, opting to prioritize the total price travelers pay before taxes, instead of the nightly price, in its search ranking algorithm. Chesky said that enables the platform to rank “the highest quality homes with the best total prices” higher in the search results.
“Airbnb started as an affordable alternative to a hotel. We must remain affordable, especially now, as affordability matters more than ever in this economic environment,” he said.
Akiko Fujita is an anchor and reporter for Yahoo Finance. Follow her on Twitter @AkikoFujita
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