Airbnb Inc will allow guests to break their payments into installments and see the nightly price inclusive of fees while browsing as the company expects a record 300 million guest arrivals in 2023.
The San Francisco-based company has been a big beneficiary of remote and hybrid work that prompted people to travel for longer durations. Now as the economic outlook worsens, Airbnb is looking to capture and keep the attention of the budget traveler.
Airbnb is also making a renewed push into renting single rooms in a nod to its beginnings and a realization that renting an entire house is too expensive for many travelers, especially younger ones.
The short-term rental company rolled out a new offering Wednesday that it calls Airbnb Rooms. Guests can rent a room in the same house or apartment as their host at prices that Airbnb says will average $67 a night.
“We know that inflation and the economy are on everyone’s mind and we want to make sure that people realize that Airbnb is an affordable way to travel,” Airbnb co-founder and Chief Strategy Officer Nathan Blecharczyk told Reuters.
Lower-priced short-term rental properties in March have had the highest growth in demand, with 21% more nights stayed in a budget rental year-over-year, according to analytics firm AirDNA. Economy rental stays have increased 16%.
The company said it is introducing the Airbnb Rooms category to help travelers re-discover rooms as a cost effective option. About 80% of the rooms in the category are less than $100 a night with the average rate of $67, according to the company.
Airbnb has always listed single rooms in houses and apartments. The company said the new offering will give more biographical information about hosts, and consumers can sort listings to learn details including whether their bedroom door locks and the bathroom is private or shared.
“During the pandemic because of social distancing, fewer people were doing this kind of arrangement, but we think now going forward it is a great option,” Blecharczyk added.
Airbnb guests in the United States and Canada can now pay in four interest-free installments over six weeks due to the company’s partnership with Swedish firm Klarna Bank AB. For bookings over $500, U.S. guests can apply to pay monthly.
More countries will be added throughout the year, according to Airbnb.
The company is also addressing ongoing concerns from guests in the update. Customer service is slated to improve for guests on trips with a round-the-clock support team expected to answer 90% of calls in two minutes or less.
Guests will also have the option to see the nightly price inclusive of fees but before taxes while browsing while hosts will have the ability to compare their listing with their neighboring competition. An update the company says will normalize how hosts set their rates and ultimately bring the price down for guests.
Airbnb said it will let consumers see checkout lists before they book. It is also tweaking the hosting side of the application to nudge owners against adding chores that could lead to poor reviews and get them booted off the platform.
“In six months to a year, there should be a material reduction in onerous checkout tasks,” Chesky said. “This should hopefully not be a meme anymore.”
It’s an interesting gambit. During the pandemic, Airbnb took business from hotels because travelers wanted rentals where they could avoid contact with strangers. Rival Vrbo, owned by Expedia, is still running advertisements bragging that it only rents whole houses.
Separately on Wednesday, Uber also announced a move to cater to cost-conscious consumers. The ride-hailing company said it is expanding discounts for sharing a ride to make its service more affordable and reduce the number of cars on the road. The discounts are available in a dozen cities, and Uber said it will add five more in the U.S., including Washington and Miami.
Uber’s move comes two weeks after rival Lyft informed employees that it will lay off about a quarter of its work force to cut costs and reduce fares.
Airbnb made $1.9 billion last year — the first full-year profit in its history — on higher bookings and revenue. Analysts expect the San Francisco company to be even more profitable this year. (Reuters/AP)