Airbnb Relaunches Private Rooms and Lets Guests See the Total Price

On 3 May 2023, Airbnb went back to the product it started with. The company announced Airbnb Rooms, a relaunch of the private room in a host's own home, at the head of a 2023 Summer Release that it described as the largest set of improvements it had ever made to its service. The release carried over 50 new features and upgrades, 25 of them for hosts.

Three of the changes reached every host, with or without a spare room. Every guest could choose to see the price of a stay with fees included, before taxes, throughout the app. Checkout instructions moved onto the listing page, and Airbnb said listings with repeated low ratings from unreasonable chores would be removed. Hosts got a map that set their nightly price against similar listings nearby.

Airbnb said it expected over 300 million guest arrivals in 2023. The features would begin rolling out that week.

What Airbnb Rooms was

Airbnb said more than 80 percent of its private rooms cost under $100 a night, at an average rate of $67 a night. It said it had built a Rooms category with over 1 million listings and redesigned the search filter so that a guest could switch between Rooms, entire homes and all types of places.

“Airbnb Rooms are often more affordable than hotels, and they’re the most authentic way to experience a city. This is the soul of Airbnb,” Brian Chesky, Airbnb's co-founder and CEO, said in the announcement.

Every Room carried a Host Passport. A tap opened a larger photo of the host and the details the host had chosen to share, such as where they went to school and what they did for work. Airbnb told hosts the passport led with their name, their years as a host, their star rating and their count of guest reviews. The Verge reported that it also showed if the host's identity, email address and phone number had been confirmed with Airbnb.

Airbnb said each Room would also show if the bedroom door had a lock, if the bathroom was shared or private, and if anyone other than the host would be in the home. Airbnb told hosts that guests expected to be able to lock their door, and that a host whose room had no lock should consider adding one.

Who qualified and who did not

The category had an entry test. In an article for hosts dated 3 May 2023, Airbnb said a listing had to meet all of these criteria from that day:

• The guest had a private bedroom of their own, with a door.
• The guest could use a bathroom, private or shared.
• The guest could use at least one shared space, such as a kitchen, living room or backyard.
• The host used their own name on the listing, and not a business or other name.
• Private room was selected as the listing type.
• The space was not a shared room, hotel, resort, tent, camper, standalone unit such as a backyard bungalow, or another property type on Airbnb's list.

Listings that failed the test would not be shown to guests as Rooms. A host could change the listing type, update the listing, or ask Community Support to add it to the category or take it out.

The fourth rule drew the line for the trade: a room advertised under a business name stayed outside the category. TechCrunch reported from its own use of the site that Airbnb's search also appeared to push more private rooms by default on city searches.

Total price and the checkout list

Total price display let a guest see the price of a stay with fees included, before taxes, in search results, the price filter, maps and listing pages. Airbnb told shareholders on 9 May 2023 that the display, a beta since December, was available to everyone. It stayed a setting the guest chose: Dave Stephenson, the chief financial officer, said on the earnings call of 9 May that guests who cared most about the full price could make the selection.

Guests could read a host's checkout instructions on the listing page before they booked, and could report excessive requests in the review. A host could build the list from five common tasks, which were gathering used towels, throwing trash away, turning things off, locking up and returning keys, then add details or requests of their own. Airbnb said it would send the guest an automatic reminder the day before checkout.

Airbnb said that when a host cancelled inside 30 days of arrival, most guests would receive an instant credit toward another stay.

A map of the neighbors' prices

Airbnb said it was the first time a host could set their own price beside the average price of comparable listings booked in the area. The host picked any open date, or a range of up to six nights, and a map showed the average prices of similar listings, booked or unbooked. Airbnb said it judged which listings were similar by their location, size, features, amenities, ratings and reviews, and by what else guests browsed while they considered the host's listing.

The pricing tools moved into the host calendar, where Airbnb said it would show what the guest paid and what the host earned, and a slider set weekly and monthly discounts. The company told hosts that they always controlled their price.

Why Airbnb did it

TechCrunch reported that the average price of an Airbnb home had risen 36% since 2019. “We just also know that affordability is on people’s minds. And so we think that rooms are once again, highly relevant,” Nate Blecharczyk, Airbnb's co-founder and chief strategy officer, told the site.

Airbnb told shareholders on 9 May 2023 that hosts had found its pricing tools too hard to use, and that it expected the changes to make stays more affordable for guests and to support growth in bookings. In the same letter it anticipated a slightly lower average daily rate in the second quarter of 2023 than a year earlier, driven by mix shifts and the new host pricing tools.

On the earnings call that day, Chesky said total price was primarily a US issue, and that some hosts in the US had charged higher cleaning fees. “And when people turn on the price toggle, we see that people are booking listings with lower cleaning fees or no cleaning fees,” he said.

Trade writers were cooler. Rental Scale-Up, a vacation rental trade site, wrote on 4 May 2023 that the checkout feedback added a layer of control over hosts and that the personal details in the Host Passport might raise concerns about discrimination. Short Term Rentalz read the Rooms launch as an acknowledgement that hosts and guests wanted more reassurance about safety. The Associated Press reported on 9 May 2023 that nothing in Airbnb's disclosures showed if cleaning fees were coming down.

What it meant for hosts

For a host in May 2023 the first job was arithmetic. Any guest could switch on the total with fees before taxes, so the figure to check was the full price of a stay, cleaning fee included, against the similar listings on Airbnb's map.

The second job was the checkout list. Instructions were on view before booking, and Airbnb had said that repeated low ratings over unreasonable chores would cost a listing its place on the platform. A host had reason to start from Airbnb's five common tasks and to cut anything a guest might report as excessive.

Hosts of private rooms had a list to meet: a bedroom door, a bathroom, a common space, their own name on the listing and the right listing type. Airbnb advised adding a lock, and the Host Passport put the host's profile in front of guests before they booked.

Airbnb said hosts on API-connected software got eight further upgrades, where their software provider had built them in. Among them were a log of the issues reported on a listing and a notification when a listing had received a warning or was at risk of suspension or removal.

Sources

1. Airbnb Newsroom, Airbnb 2023 Summer Release: Introducing Airbnb Rooms, an all-new take on the original Airbnb (3 May 2023).
2. Airbnb Resource Center, Airbnb Rooms, an all-new take on private rooms (3 May 2023).
3. Airbnb Resource Center, New pricing tool compares similar listings nearby (3 May 2023).
4. Airbnb Resource Center, Redesigned pricing tools, now in your Airbnb calendar (3 May 2023).
5. Airbnb Resource Center, Upgrades for professional Hosts (3 May 2023).
6. TechCrunch, Airbnb’s average home prices have gone up, so now it’s refocusing on rooms to give users more affordable alternatives (3 May 2023).
7. The Verge, Airbnb launches new Rooms category with more details about hosts (3 May 2023).
8. Short Term Rentalz, Airbnb debuts Rooms category in 2023 Summer Release upgrades (4 May 2023).
9. Rental Scale-Up, Airbnb’s 2023 Summer Release: Addressing Market Concerns and Preparing for Future Expansion (4 May 2023).
10. Airbnb, Inc., furnished to the US Securities and Exchange Commission, Q1 2023 Shareholder Letter (Exhibit 99.1 to Form 8-K) (9 May 2023).
11. The Motley Fool, Airbnb (ABNB) Q1 2023 Earnings Call Transcript (9 May 2023).
12. Associated Press, as carried by News4JAX, Airbnb posts $117 million profit, but 2Q outlook disappoints (9 May 2023).