Airbnb started out with the idea of renting extra beds and rooms in private homes to people as an affordable alternative to hotels, but as it grew in size, it took years to get more expensive and develop into a broader platform for each kind of private accommodation, with a big emphasis on travelers taking entire houses, not just rooms. That’s helped the company land its first profitable year in 2022, but there’s a looming problem: Airbnb homes are becoming more expensive to rent, with average prices up 36% since 2019 — and with the current state of economy, travelers are looking for cheaper alternatives. So today, Airbnb is taking a different tack: it’s taking the wraps off a new single-room rental option, once again making it a more prominent part of the search flow for potential travelers.
“Everyone is talking about the economy. And you know, we know people want to travel,” co-founder and chief strategy officer Nate Blecharczyk said in an interview. “We also know that affordability is on people’s minds. And so we think that rooms are very relevant again.” He added that 300 million guests are expected to use Airbnb this year.
Airbnb said it currently has about 1 million rooms listed on the platform, in addition to inventory of the whole house. To help you find those single rooms, a special search category has now been added; and from our own experience, it seems that the company’s search algorithm is also pushing more private room options in city search results by default.
At a time when people are looking for more affordable options, Airbnb said more than 80% of private rooms cost less than $100 per night, with an average rate of $67 per night. And perhaps as a carrot for travelers who may not be totally into the idea of staying in a house with complete strangers (presumably one of the reasons Airbnb pushed the idea of whole houses instead of rooms during its scaling up), makes it makes some of the “private” features more prominent.
Now you get more details about the privacy status of these rooms: whether you would have a shared or separate bathroom; whether there is a lock on the door; info about shared public spaces; and who else is staying at the property.
The new private room experience is rolling out as part of the company’s regular semi-annual product release cycle. The room update is probably the most notable here: it speaks to a new experience on the site, and it also underscores how the travel industry is trying to size itself up at a time when people are determined to travel again, after the peak -Covid-19, but are also aware of their account balances and wider economic issues.
The larger release, meanwhile, has no fewer than 50 new features and upgrades to existing features.
Image Credits: Airbnb
Among them are more tweaks to improve transparency about a guest’s stay, both from a pricing and rules perspective. These are being introduced to better compete with hotel bookings where users are not charged a separate cleaning fee nor expected to complete it a long list of tasks before you check out.
To that end, total price display — first introduced last year — will be rolled out more widely across Airbnb’s footprint. This shows prices before taxes, but including other costs such as a cleaning fee. Conversely, hosts can see how much guests pay after taxes, so they can adjust their fees accordingly to fit their listing into certain price filters set when users search for places.
Image Credits: Airbnb
In addition, to address checkout complaints, Airbnb has updated its app for hosts with a set of basic instructions, such as returning the key, throwing out trash and turning off lights. Hosts can add other specific requirements, and guests in turn can provide feedback on the checkout experience.
In addition to the company’s refocusing on rooms, Airbnb is also turning its attention to improving the long-term stay experience — a growing segment for the company. Blecharczyk said about 20% of nights booked are part of longer stays (28 days or more).
The travel platform will charge lower service costs for stays longer than three months. It didn’t expand what “less” is. In addition, the company allows US-based consumers to pay via wire transfer for stays longer than 28 days.
In terms of financial services, Airbnb is partnering with Klarna to let users from the US and Canada request four interest-free payments over six weeks. In addition, US-based users can use this feature to pay monthly for bookings over $500.
Image Credits: Airbnb
In March, Bernstein sent a message to his customers with a positive view of Airbnb, saying that more than 90% of listings on the platform are offered by individual or small-scale owners. Analysts added that the majority of these small-scale property owners exclusively use Airbnb, making the service unique.