Airbnb Q3 Impressive Financial Results; New 11/16 Initiative to Increase Host Supply

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TL, DR: Some Hosts here have complained about a much greater supply if not in some places a glut of new Host competition. Airbnb is about to announce a new initiative on 11/16 to further increase Host supply. While some of us now and then scratch our heads at Airbnb’s business sense, their latest financial results are impressive, earning a record $1.2 billion in Q3, 100 million nights and experiences in Q3, with Hosts earning $180 billion since 2008.

Airbnb financial results reported on 11/1/22 include these excerpts:

“In Q3 2022, we had nearly 100 million Nights and Experiences Booked, up 25 percent year-over-year, and $15.6 billion in Gross Booking Value, up 31 percent year-over-year.”

“We also had our most profitable quarter with net income of $1.2 billion, up 46 percent year-over-year, representing a 42 percent net income margin.”

“First, guest demand remains strong. We believe new use cases, including long-term stays and non-urban travel, are here to stay as millions of people have newfound flexibility in where they live and work. At the same time, we’ve also seen recovery of urban and cross-border travel, which comprised the vast majority of our business before the pandemic.”

“Second, we’re seeing strong growth in the number of new Hosts on Airbnb. Just like during the Great Recession in 2008 when Airbnb started, people are especially interested in earning extra income through hosting. That’s why on November 16, we’re introducing an all-new, super easy way for millions of people to Airbnb their homes as part of our 2022 Winter Release.”

“We continued to see longer lead times for bookings in Q3 2022.”

“Cross border gross nights booked increased 58%, while high-density urban nights booked grew 27% compared to Q3 2021.”

“ . . . nights booked from long-term stays remained stable from a year ago at 20% of total gross nights booked.”

“. . . since our founding in 2008, Hosts have turned to Airbnb as a form of supplemental income, and to date, have earned more than $180 billion.”

“But we’ve just scratched the surface in growing our Host community. We’re focused on addressing the obstacles there are to becoming a Host and on November 16, we’re excited to introduce an easier way to host on Airbnb.”

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There are already far more listings than guests to fill them. “Easier to become a host”- what hogwash. It’s already dead easy- anyone can list a place, as evidenced by all the listings out there that make it evident the hosts don’t have a clue.

Seems to me that Airbnb wants more starry-eyed newbie hosts who will follow Airbnb’s urgings to lower prices, offer discounts, accept any and all guests, be terrified to call out bad behavior or leave honest reviews, and be under the impression that Airbnb is their “partner”, who will have their back the instant anything goes wrong.

Too many listings makes financial sense to the company- so many places for guests to choose from- but makes no financial sense for hosts. How can more and more competition be sustained unless everyone plays the race to the bottom pricing game?

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Well, this is the game that experienced Hosts should not play. Instead we need to play the ‘long game’ of providing safe, well maintained, clean homes with attentive and hospitable hosts. In the short run we might lose business, but in the long run I believe – or is it just hope – that guests will see the value of what we are providing. Many do already now.

Our major risk is that rookie Hosts provide such a poor service that it gives Airbnb a bad name, which hurts us. But if that happens it hurts Airbnb too and I would expect/hope that they would then reform the process.

But hope is not a plan of course. Getting a channel manager like OwnerRes, getting repeat business directly should be a parallel path for us.

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I think most travelers understand that there is no consistency in Airbnb accommodations. It’s like expecting every hotel on hotels.com to provide the same level of service. Most savvy travelers know that when booking hotels you need to check reviews online. Rookie guests eventually learn that as well.

Airbnb is unstoppable due to the network effects. I feel like hosts here have figured out how to benefit from it rather than lose due to the stupidity of Airbnb policies.

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AirBnb already has a “bad name”. They dont care about " having a bad name". What they care about is getting service fees. As they force lower rates due to increased competition, then travelers will book properties …no matter what … there will always be some travelers seeking affordable pricing and willing to take a risk on a well priced “AirBnb”. This is already proven…there are more travelers on Airbnb than ever before…despite the lack of consistency, misrepresentaions, dealing with bad mgrs, and the occassional scam and fake property.
AirBnb is stating clearly what we already knew…the guest is the customer, and they intend to give the customer as many choices as possible while they always continue to entice new listings to join. They intend to force prices lower because some new owners will be unable to pay the mortgage without dropping rates. Those overextended owners will price rates down to avoid foreclosures and bankruptcies…the goal will no longer be profit for some…it will be to tread water. All the while AirBnb will take a bigger piece of the pie in anyway they can.
Also, properties that are now even just a few years old can be looking “tired”…new and fresh is cleaner, more trendy, more desireable. Unless an owner is paying attention to keeping their place current all the time, then it will be harder to attract bookings against new listings.
The golden days are over ( once again ).

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My neighbor & friendly competition recently talked about this same thing.

We both update our units a little at a time to try & keep up. Plus we routinely do small item maintenance instead of letting things get worse (think touch up painting vs letting it go until all needs painting). I had hoped to replace one of my tub/showers with a walk in shower but looks like that will be next year. I had to replace my washer/dryer combo so there went a chunk of the bathroom renovation $$$.

we were discussing investors purchased several condos in our neighborhood - lots of gray walls & LVF & put too many beds in a small space.

I have no shame, a few weeks ago the cleaners were in the neighboring condo. I popped in to ask them a few questions about their cleaning services. Of course I snooped. 2b/2b condo sleeps 8! It looked rough after 1season. I’m (not so secretly) hoping they don’t invest in the repairs & it leads to less competition.

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I agree with all you’ve said here, but there will always be guests who are looking for something eclectic, with character and history, and hate modern, trendy places. The problem is and will be Airbnb burying those listings under pages of generic modernity.

Between their “update” trying to get guests to book castles in outer Mongolia and the split stay feature, which guests are loudly complaining about, as there is no way to turn it off, and their pushing of long term stays for digital nomads, it is clear that their direction is no longer simply to provide a service to connect guests with available accommodation, but to arrogantly try to direct where and how guests travel and what they book. And to do as much as they can to make sure guests get a great deal while hosts struggle to make ends meet.

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You can’t really blame the poor decisions of hosts on Airbnb. People bought places purely to Airbnb a property. These people took a risk, sometimes risk doesn’t pay off. I feel sorry for the people who will be under difficulty but they are mostly responsible for their own pain. Airbnb never guaranteed any bookings or ROI. Just as they didn’t stop anyone last year from hiking up rates when things were getting sold out.

Many will realize that it’s not a feasible business to rent out on Airbnb, and convert their properties into long term rentals or sell.

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Some did. Plenty of hosts just rent out a room or suite or guest house where they live, or are trying to offset costs of their own vacation or future retirement home, or a place they inherited from grandma.

Small time hosts will also struggle to make ends meet if Airbnb floods the market with corporate run listings owned by investors, as operating costs go up and Airbnb forces a race to the bottom.

I have no sympathy for investors who buy up properties solely to str if they can’t pay the mortgage and have to sell. I have sympathy for the single mom who rents out a bedroom or two, which means her children have to all share a room, who will lose the only home she and her children have if she can’t pay the mortgage.

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They want to create the race to the bottom and will give the lower priced properties more exposure.

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ugh, only ABB wins with more bookings at lower prices. If we drop our prices how do we pay skyrocketing energy bills, hey Chesky? We can’t work more you twit, “lower prices equals more conversions” works in theory, when you are selling things so you might possibly earn more.

We can’t sell “more”, we are limited to 365 days per year (at best, many regions restrict this too)

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He cares about conversions because that equals more service fees. Nothing else matters . He is being 100% totally clear. Low prices and service fees. Refund to guest if guest is not happy. Air cover if guest is less than desirable. Rate guests up and properties down via separate systems. Put bodies in houses any way possible. Eliminate logical parameters and restrictions to booking . Control every aspect of the transaction to ensure guests book .

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Chesky should go into politics, where millionnaires who haven’t been in a grocery store for 30 years and couldn’t tell you the price of a gallon of milk have the gall to talk about how much they care about inflation and act as if they can so relate to the average person’s struggles. Chesky probably doesn’t even know how much his own electric bill is, some assistant takes care of paying his bills and money is no object.

But hosts are encouraged to go buy an expensive computer chair and upgrade their Wifi so digital nomads can sit in your rental all day with the heat cranked up, going through 10 Keurig pods a day.

Also he seems endlessly confused about what he wants his platform to be. On the one hand he wants to be the Architectural Digest of str sites, showcasing castles and fancy resorts, and upscale homes with all the bells and whistles, yet wants us to have the cheapest prices out there?

The guy becomes more and more despicable with every new million he earns. This is what he came up with on his year-long trip around the world? Most people’s consciousness and understanding of the world and its people is expanded through travel, his narrows to $$$$$.

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Although slightly glum, much truth to this nonetheless. If I choose a nightly booking.price and it’s 30% higher than Airbnbs recommend price, I know I’m at the right number. Although, sometimes they do recommend a higher price so I’m not sure what there bots and algorithms are thinking some of the time.

Anyhow, thanks for the post.

Shel - PA Host

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on fire S.! I don’t get how Chesky can be so myopic. But somehow all those billionaires think they can “fix” the world.

so long as the refund comes out of the Hosts’ pocket! you’ll notice we’ve never once seen a situation where abb waived/refunded their fees.

you make this sound awesome, haha. if Chesky gets his way, it might be cheaper to live in those “5* Value” castles this winter, instead of paying rent like a normal person. if you can find somewhere that’s $100/night with everything included, in any normal big city, then you’re ahead. throw in a complaint or two and you could probably find yourself a place for $150/night that’s viable to live in for a while.

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There are retired seniors who live on cruise ships. They figured out that it’s cheaper to do that than to own or rent a house, pay utilities, require transportation to go shopping, buy food, etc.
They have their group of friends who all do this together, have their accommodation, food, entertainment, a pool, even a doctor on board for non-critical issues, and get to see new places in usually warm climes.

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