Cost of living crisis creates an unexpected boon for Airbnb’s hosts and the parent company
The travel giant’s co-founder says a wave of new Australians are becoming hosts on the platform to earn extra income.
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The cost of living crisis and broader economic downturn is providing fertile ground for Airbnb, according to its billionaire co-founder and chief strategy officer, Nathan Blecharczyk, who says that a new wave of Australians are considering becoming Airbnb hosts for the first time in order to earn extra income.
Airbnb, itself a “recession baby” having been started during the global financial crisis, is enjoying a spike in new registrations after a difficult pandemic period in which it axed 25 per cent of its workforce.
“We‘re living in times of increasing economic uncertainty, with inflation and the possibility of recession, and, you know, it reminds me a lot of when we founded the company,” Mr Blecharczyk told The Australian.
“Many of our early hosts in 2008 and 2009 were folks who had lost their jobs with the collapse of the financial industry and the great recession, and so we think that now more than ever folks are going to value the extra income.”
More than 60 million people have visited Airbnb’s hosting web page – demonstrating they’d be potentially interested in becoming an Airbnb host, Mr Blecharczyk said, compared with just 4 million total hosts on the platform.
The company has announced a raft of new features designed to help encourage users to take the leap and become hosts, including one-on-one guidance with a “Superhost”, expanded damage protections for art, valuables, and collectibles, and the option to host an experienced guest for the first three stays. It has also trebled damage protection from $US1m to $US3m.
“We recognise that earning trust is a complex process,” Mr Blecharczyk said. “All of these features are meant to target very specific concerns that we’ve heard from people, and we hope they can make a huge difference.”
Australian Airbnb hosts typically earn about $11,500 per year, and hosts earnings globally are up 30 per cent year on year, according to statistics provided by the company.
The top five international destinations for Australian guests this summer are Paris, Singapore, London, Whistler in Canada and Wellington in New Zealand.
Airbnb has faced sustained criticism from some of its users about hidden fees, with guests often stung by hidden cleaning fees or unreasonable checkout requests.
Mr Blecharczyk said that from December, users would be able to toggle between pricing modes, including “total price”, which will display the price inclusive of cleaning fees, but not taxes.
Airbnb is in a much different place now to where it was at the start of the pandemic, when it laid off 25 per cent of its workforce as travel – and Airbnb bookings – collapsed, as much of the world was forced to stay home amid widespread lockdowns.
Chief executive officer Brian Chesky told investors this month that Airbnb went from being “the navy to the navy SEALs” – a small lean elite group.
“The company’s shares are down 48 per cent in the last 12 months, a less precipitous drop than most other Silicon Valley tech companies,” Mr Chesky said.
Mr Blecharczyk said: “A lot of companies are going through some pain right now and having to make those people choices.
“Prior to the pandemic, we had basically a decade of growth and access to easy capital, and that meant we hadn’t had to make some of these kinds of hard choices.
“We were getting into things like flights and magazines, and then we had a bit of a reckoning where we had to ask ourselves, ‘what is our true competitive advantage?’ And that, of course, was our hosts and hosting.
“A side effect of the lay-offs was that we are now super focused in a way that we weren’t before; we can be really agile and responsive to what’s happening and a lot of the work we’re doing is very much directly informed by what we’re hearing from our users.”
Originally published as Cost of living crisis creates an unexpected boon for Airbnb’s hosts and the parent company
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