Airbnb announced over 50 new features coming to the platform this morning. The big ones include a new, smarter Translation Engine, a way to know if a rental has solid WiFi, an expanded Ask A Superhost program, more flexibility in search and tools to verify any accessibility features a listing might promise.
The biggest announcement of all, however, comes in the form of AirCover. It’s a new coverage policy that protects a listing from top to bottom (including most items in the home) from damage and theft. It includes protection for pet damage, deep cleaning and income loss.
This is particularly critical because right now, Airbnb suffers from a high-class problem, according to CEO Brian Chesky. Suddenly, as pandemic restrictions loosen and more people venture out of their homes to travel, supply is not meeting demand.
I sat down with Chesky to discuss growing the supply side of the business, how he’s felt as a leader of a massive travel company over the past year and the future of Airbnb as a whole.
This interview has been lightly edited for length and clarity.
TechCrunch: The last time that we talked, we discussed what it was like to be CEO during a pandemic. Obviously, you’re the CEO of a travel company, so that makes it 20 times more difficult. As we’re moving through this pandemic, it’s starting to feel like things are kind of swinging in your direction. You had a great Q3 earnings report recently. Interest in travel is up, bookings are up, borders are opening. How safe or secure do you feel Airbnb is right now compared to a year ago?
Brian Chesky: Much more secure. I feel like we’re on solid ground now. I felt like we spent 10 years building this company that was really a pretty hot company. If you think about it, in the 2000s, Airbnb and Uber were the two companies that were riding a lot of trends and we were very high. I felt like before the pandemic, I thought we were kind of on top of the world. But then the gods struck down on us and we lost 80% of our business in eight weeks. And we had to raise that. Let me just give you a point of reference. We had to raise an emergency round of financing of $2 billion, including a $1 billion loan from Silver Lake and Sixth Street Partners. We just did a billion dollars in profit in Q3. So it’s almost like doing a billion-dollar round without having to give away any equity. I remember Paul Graham used to say the best fundraising round you can do is to be profitable because you never get diluted.
Just to summarize, the brand is as relevant as it ever was. It’s a noun and a verb all over the world. Travel is coming back. So, I think 80% of our business before the pandemic involved someone either crossing a border or going to a city, which is basically the two types of travel that weren’t really happening. That’s coming back. But the reason we’re doing so well is partly because all these new ways of traveling and living have emerged, which I think are here to stay. People are living on Airbnb on a monthly basis. I don’t think that’s going away, because I don’t think people are going back to the office five days a week. Those things are here to stay. And, we actually have a much better cost structure.
So, for all those reasons, I feel more secure. Maybe the most important final thing I’ll say is this: Having gone through managing a company in a pandemic where people were predicting our imminent demise, having to rebuild the company from the ground up and take it public on Zoom as a travel company … if I can get through that and we can get through, then I can get through anything. So I think we’re a lot tougher, a lot sharper. And once you’re in a foxhole with 1,000 people, you feel like you can do anything. That’s kind of how we feel now.
The brand is as relevant as it ever was. It’s a noun and a verb all over the world. Brian Chesky
You said that you believe that work from home or “work anywhere” is here to stay. So what does that mean for Airbnb HQ? Are you going to renew the lease, or what exactly does the future of Airbnb as a workforce look like?
It’s a great question. We’ll still have our offices. Not as many. Not as much space. But we’ll still have our offices. We’ll still have our main headquarters in San Francisco. We’re definitely going to adopt a flexible work policy. I don’t know exactly what it’s going to be. I think every CEO is trying to imagine how everyone’s going to work in the future.
I think “hybrid” is kind of what you say when you’re not sure what world we’re in. Hybrid is not the right way to think about how we’re going to work. I actually don’t think that’s how many companies will work.
I think you’ll have to either be completely office-centric or a little more flexible-centric. We’ll be more flexible-centric. So we’ll still have people gather and come together in offices, but I don’t think we’re going to prescribe something like three days a week. I think we’re gonna probably do something a little different than that. I think that if people can come to an office it’s because they’re being asked to do things they can’t do from home. Doing heads-down work is better done from home or wherever you’re most comfortable. Rather than saying you have to come to work every Tuesday, I think there should be periods of time, maybe every quarter or every year, where we do. Really intentional gatherings and immersive deep dives. That’s probably what I’ll end up doing.
But we’re still designing and I want to walk the walk. I want to design for this flexible world. I don’t want to say “Hey, Airbnb is benefiting because people don’t have to go back to the office, but I’m going to make our employees go back to an office.” That would be kind of weird and kind of inconsistent with what we’re benefiting from.
That being said, Jordan, I also don’t think we should all live in the movie “WALL-E,” that Pixar movie where everyone’s like passively sitting at a screen. We’re getting dangerously close to that, as well. This revolution is just mass digitization. The pandemic mostly just accelerated what was already happening. We were already living this massive acceleration of digitization. This pandemic accelerated that further and I think it’s mostly a good thing.
But I don’t think it’s purely a good thing because people are also more isolated, divided, disconnected. People are going to get left behind. That’s what I’m focused on. This inevitable digitization of the world where people are going to be more remote, more distributed, is going to lead to so many new trends. It’s mostly a good thing, but we have to design for it because there’s going to be some pernicious effects if we’re not careful. So that’s kind of how I’m thinking about it.
What for you has been the most difficult thing about running a remote workforce, and how have you managed it?
It’s hard to say, because I’ve also been in a crisis. It’s hard to disambiguate which hard parts were being remote versus being in a crisis. There’s also managing a crisis remotely versus just managing a company remotely. Working remotely is not so difficult. Managing a crisis remotely is difficult. And the reason why is because, in a crisis, people are often afraid, right? Not everyone, but people have fear. They’re afraid. They want connection in a crisis. We really seek assurances from our leaders. If you can’t even see your leader or can only see him through a screen, what it really means is that you’re alone. During a crisis, making sure people don’t feel alone has been really hard. It’s really challenging. So that’s probably been the hard part.
Relatedly, for myself, also feeling alone. I used to walk in the hallway and see hundreds of employees. Maybe, what I had back then was just a better feel for everything. You bump into people in the hallway and you see how everyone’s doing. Now, every social interaction has to be prescriptive. I have to ping someone. I have to schedule something. There’s not as much serendipitous kind of communication. So that’s probably the hardest thing. One is just allowing everyone to feel not alone, not connected. Two is me not feeling alone and three is just having a feel for what people are saying.
I do think a lot of things are easier, though. You know, a whole lot is easier when we’re remote. It’s just more efficient. There’s not as many logistics. Everything happens faster. Ultimately, we’ve benefited from this very remote policy. We made 150 upgrades this year. It should be noted, we did not make 150 upgrades any year that we were in the office. I think being remote had maybe a little bit to do with it. It’s just really efficient.
One of the other things that we talked about the last time that we spoke was the importance of growing the supply side, and we actually spent a lot of time talking about individual hosts. It feels like AirCover is a really big push in that direction. Is that a fair characterization?
Yeah, I think AirCover benefits every host, but I think in particular it benefits individual hosts. If you’re really professional, you might buy your own coverage and you’ll have business insurance and things like that. Most regular people don’t. They rely on Airbnb. AirCover was really meant to clear one of the biggest obstacles people have in hosting. One of the biggest obstacles people have hosting is fear of the very unlikely event that something happens to their house. What if we could just really protect people and take those concerns off the table? AirCover is a whole new program built from the ground up. We took 10 years of learning. We already had a $1 million guarantee and $1 million liability insurance, so we had the anchor of a great program. But there were a lot of issues with it. We worked with our hosts to really try to plug everything, to allow faster reimbursements, for enough time to make a claim, pet damage protection, deep cleaning protection and a bunch of other process improvements. The reception from our existing hosts has been amazing. I think the biggest impact AirCover is going to have is that this is going to bring a whole new generation of people into the Airbnb fold to become hosts. That’s what I hope for. Mainly, regular people.
Yeah, I wanted to talk about pet protection. You banned party houses and so, like you said, it is pretty rare for something catastrophic to happen in the home and you’ve got coverage from your liability and damage protection. But then pets adds this new layer of complexity. Now, you’re talking about more frequent, low-level damage to homes. Talk to me about negotiating that and working that out in your head. I’m assuming more claims will be filed.
Yeah, probably. Well, to be clear, there already were a lot of claims filed. The problem before was we weren’t covering those claims because it fell out of the policy. A lot of hosts were saying, “Hey, this is great. I’m hosting pets, but I have to do a deep cleaning. I’m happy to do it, but it’s coming out of pocket.” So then, they would have these big cleaning fees, and then people go on Twitter and complain about cleaning fees. But a lot of cleaning fees were actually people trying to protect against a pet coming. We realized that if we really tried to just unpack all this, there are some better solutions.
Basically, here’s our theory, Jordan: The world is getting more remote. People are less tethered to one location. They’re traveling to more locations or staying longer and they’re bringing their family with them. In this case, their whole family. In the old world, you go somewhere for three days and leave your pet behind. Now, people don’t want to leave their pet behind. They want to bring their pet with them. Our hosts want to host pets because if they do, they can charge more per night and they can have more bookings. But they needed two things: They needed a way to charge for pets, so we added a way to charge for pets. And they needed protection against deep cleaning and pet damage, and we provided that. What this will do is it will lower the cleaning fees. It will increase the number of people that accept pets and it will decrease the amount of people disappointed because they were making claims about pet damage. Hopefully, this provides a lot more peace of mind.
This goes back to our design-driven approach. I’m going to slightly divert on this tangent, but I think it’s important. I’m an industrial designer. I went to Rhode Island School of Design. I thought when I was a kid, I would be an architect. I had an image of what design was. I came to Silicon Valley and the way software is designed was totally different than the way a building is designed. Everything was very bottoms up, data informed and that was somewhat a good thing, but somewhat a bad thing. I think that what I ended up noticing in Silicon Valley is there wasn’t as much design by empathy. We have so much data that people become numbers and they become cohorts. You just end up missing the subtle experiences. Really great design means you walk through someone’s shoes. So, we started trying to walk through the shoes of somebody that brings a pet with them and walking through the shoes of a host who has fear about somebody bringing pets with them. We spent a lot of time talking to thousands of hosts and guests, and doing very ample research. Hopefully, these solutions will make it easier for people.
It seems like AirCover is not only meant to just protect existing hosts but bring on new hosts. I understand that fully because my family and I browse Airbnb once a week and we struggle to find anything, even through flexible search, because everything’s booked out so far in advance. How worried are you about what’s being left on the table?
Make no mistake. If you are a guest that comes to Airbnb looking for something and don’t find it because we were sold out, it’s a problem. It’s a high-class problem. It means people like the product. That’s better than a product that no one wants, but it’s still a high-class problem nonetheless. That being said, I do think that we’re making a lot of progress. Just to give you a point of reference: We have nearly 6 million listings. We have more listings than we ever had before. This may not sound like an impressive stat when you put it in context. But, I believe our large competitors don’t have more listings than before the pandemic. In other words, a lot of hotel companies and OTAs shed listings. A lot of hotels shut down. A lot of hosts stopped hosting during the pandemic. While most other platforms were shrinking, we actually added hundreds of thousands of hosts. We have nearly 6 million listings and we’re starting to see some pretty good uptake. Ask A Superhost, for example. A lot of people don’t know how to host, so we connect them with Superhosts. More than 50,000 hosts have used it.
But I think things like AirCover are going to help because one of the biggest reasons people don’t host is they have a fear of, “What if something goes wrong?” And we said, “What if we could take that fear away?” What if we could provide the ultimate protection in the event that something went wrong? AirCover was our answer to that. I think that’s going to unlock a significant number of new hosts to the platform. Anytime someone comes on and they can’t get a place, it’s a problem. It’s a high-class problem, but a problem nonetheless. But, between Ask a Superhost and AirCover and some of the other innovations, I think this is going to bring on many more hosts to the platform.
I don’t want to say “Hey, Airbnb is benefiting because people don’t have to go back to the office, but I’m going to make our employees go back to an office.” That would be kind of weird and kind of inconsistent with what we’re benefiting from. Brian Chesky
So what does success look like following this release?
What does success look like? A few things. Number one, success looks like we get a lot more hosts because we make hosting easier to do. Removing the number of steps, adding Ask a Host, adding AirCover, adding more reassurances. By doing that, more regular people become hosts. Existing hosts feel like we’re really good partners, and we’ve gotten an amazing response from our hosts. We’ve had a mostly great relationship with them, but we had a real rough spot last year as you remember. I think our relationship is much stronger now.
Success is that they feel Airbnb works really hard and listened to them. Hosts have been talking about pet damage, they’ve been talking about the issues of the host guarantee. So I hope they feel like we respond to them.
Success is that guests feel like we’re giving them what they asked for. That we listen. Verified WiFi speeds was something I’ve been hearing repeatedly all year on Twitter. We delivered it. It took us a little while, but we delivered. People have been saying, “Hey I want to use Airbnb but I have a disability or a wheelchair and I don’t want to get to a listing that says it’s wheelchair accessible and it’s not.” So we listened. I’m hoping that guests feel like we listen and we innovate.
The final thing I’ll say, and maybe the most important, is that we are still innovating. You know I think that the travel industry is very much a marketing-led industry. These are industries where people spend huge amounts of money on direct marketing and loyalty programs. But the core products don’t change, they don’t evolve. Actually, this is true of a lot of software companies. They launch and then they do these endless iterations but you open the app and it doesn’t really look that different than it did two, three years ago. How many apps can you say this about? They look kind of similar to two or three years ago. I think if this launch is successful, the most important thing is that people say we’re still innovating; we’re still growing; we’re still changing. As the world changes, we change with it. We’re a very design-driven company. We’re constantly designing. Ultimate success is that people look forward to our new releases. They’re like, I can’t wait to see what you do in 2022. That would be my ultimate hope.
Speaking of looking forward to 2022 … The last time we talked it was all about flexibility, and this time it’s all about being able to live and work on Airbnb. So what should we be expecting from the spring release in terms of where you’re headed?
Well, I’m in it right now. A lot of my time is focused on what we’re going to do for next year. I think we’ve got some incredibly exciting innovations. Without giving too much away. I think this “live anywhere” trend is gonna be here to stay. We’ve only scratched the surface. People aren’t just traveling on Airbnb, they’re now living on Airbnb. Zoom allows you to work from home. Airbnb allows you to work from any home and live in any home. As borders reopen, suddenly people in New York City aren’t just gonna go to the Catskills or the Hamptons, just as an example. They’re going to go to other countries and live in other countries.
There are a lot of opportunities there. Those are just some of the things I’m very excited about.
If you could have one do-over in the past two years, essentially since the beginning of the pandemic, what would it be and why?
There is one I would do and it’s probably not more than one because I think we got a lot right. But we got one big thing wrong. It was last March. It was the first decision I made during the pandemic. The very first thing. I felt like I made 1,000 decisions, but this was the first one I made.
The pandemic breaks out and the World Health Organization declares it a pandemic. This is around March 14, March 15. The NBA season is canceled. The world stops. We get more than a billion dollars of cancellations being requested by guests. But the cancellations are against the host cancellation policies. And so I overrode more than $1 billion worth of cancellations. I overrode the host cancellation policy and refunded more than a billion dollars of guest bookings. I think it was the right thing to do. But I did it unilaterally, without consulting the hosts. They got really pissed off and it broke some trust with some of our host community.
We spent the last year and a half listening to them and trying to rebuild trust. I think we’re now better off than we were before the pandemic. But that was a bit of a wake-up call to us. That wake-up call actually led to a lot of changes. It led to us really getting back to our roots of hosting and led to us creating the Host Advisory Board, really bringing them into the fold. The comments today are really positive. And that’s mostly because we did it with them. We didn’t do things to them. We did things for them. And I think that was a big turning point.