By DAVID KOENIG, AP Business Author
Convinced that the boom in leisure travel is everlasting, Airbnb goals to expand its listings by convincing more people to show their homes into short-term rentals.
The corporate said Wednesday that it can increase the quantity of liability coverage for hosts, as much as $3 million, in a play for owners of nicer houses in high-cost places akin to California. It can also pair newbies with a “superhost” to guide them through the technique of becoming a short-term landlord, from signing up through welcoming their first guest.
More listings wouldn’t appear to be Airbnb’s biggest challenge.
CEO Brian Chesky says the San Francisco company is taking steps to make price more transparent when consumers browse Airbnb listings, and he predicts that may reduce sky-high cleansing fees that many hosts tack on well into the booking process — a significant criticism of consumers.
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The corporate also continues to attempt to crack down on large parties at rentals, a couple of of which have turned violent. And it faces efforts to extend regulation of short-term rentals.
Through all of it, Airbnb has fared higher than most travel firms throughout the pandemic. This month, it reported a record $1.21 billion profit for the third quarter. Its stock fell, nonetheless, because earnings and bookings were lower than Wall Street expected and the corporate gave a cautious fourth-quarter outlook.
Investors worry that buyers paying more for food, gas and housing — and facing predictions of recession — will in the reduction of on discretionary spending like travel, hurting Airbnb.
Some current hosts are apprehensive which may already be happening. Last month, a post on a Facebook page for Airbnb “superhosts” asked, “Has anyone seen an enormous decrease in bookings during the last 3 to 4 months? We went from at the least 50% occupancy to literally 0% within the last two months.”
Other hosts on social media have suggested theories starting from a fragile economy to pent-up travel demand finally running out, and a few think the issue may be that Airbnb already has too many listings.
AirDNA, which tracks short-term-rental numbers, said Airbnb listed nearly 1.4 million rentals within the U.S. in September, a 23% jump from a yr earlier and 9% over 2019. Nearly two-thirds were added since 2020. The trends are similar for global listings.
Chesky said in an interview that Airbnb has enough hosts now — he didn’t say it has too many — but needs more because leisure travel will continue to grow. And, he said, a recession could push more people to show their homes into Airbnbs. In any case, he likes to indicate, Airbnb launched throughout the great recession in 2008.
“Persons are pulling back spending in tons of areas, but not travel,” he said. “And with a looming recession, we felt like more people than ever are going to need to make extra cash.”
Potential hosts sometimes hesitate, Chesky said, because they’re uncomfortable having strangers of their homes. The corporate’s response is to triple the quantity of coverage for hosts — from $1 million to $3 million — against damage, including to vehicles, boats and a wider range of art on the property.
Chesky is betting that may persuade more owners of nice homes to list them on Airbnb.
“Exactly, and residential values have increased since we wrote the $1 million plan,” he said. “We just noticed greater than 20% of the homes on Airbnb, and possibly even greater than that, were over the $1 million limit in value.”
The corporate said it is usually launching a system to confirm the identity of guests and flag potential parties, immediately within the U.S. and Canada and worldwide by next spring. Chesky said the system is “not a silver bullet,” and he didn’t provide many details but said within the U.S. it can include a check of criminal and sex-offender records.
Within the meantime, the corporate is working on a plan to display the all-in price of a not sleep front on its app and website — an amount that might include cleansing fees, which could be very high and only appear later within the booking process.
Chesky said he didn’t wish to bar or cap cleansing fees — that is a call for hosts, he said. But including fees within the upfront price — and within the order through which search results are displayed — “goes to correct the market,” he said.
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