Many startups make the mistake of scaling too quickly without laying the foundation first—and Airbnb, despite its success, is no exception.
“Our system was designed for a much smaller but rapidly growing company,” CEO Brian Chesky, who co-founded the home-rental platform in 2008, admitted recently.
Indeed, from the outside, the rental giant looks like it’s thriving: It just rebounded from the pandemic lows of 2020, when it lost 80% of its business in eight weeks, to have one of the most successful IPOs in history.
But it has been plagued by a growing number of complaints from users, including landlords and holidaymakers, some of which were compiled into a report. A particularly damaging report from the Xiongdongzi stack earlier this year.
The core of the problem is that guests feel they can get a better (and cheaper) experience at a hotel than in someone else’s empty room, but of course the landlord wants to make more money.
What’s more, although the company was founded by designers, its platform wasn’t fully defined yet.
“We need to get our house in order,” Chesky said in a recent interview. Bloomberg. “We need to make sure the listings are great, we provide great customer service and are affordable. I tell our team that once we solidify that foundation, we can get back to work creating new and exciting things.”
That’s why, over the past few years, the head of real estate and his 6,800 employees have been retrospectively rolling out small fixes to address the team’s lack of foresight that preceded its meteoric rise.
“To use a precise metaphor, it’s like we never quite laid the foundation. Like, we have a house that has four pillars when we need 10,” Chesky said.
But retrofitting a home on the scale of an Airbnb is no easy task. “The bigger the scale, the more effort it takes to improve quality,” he added. “That’s what we’re really focusing on.”
a patch job
In May of this year, Airbnb carried out more than 50 small updates, and recently carried out 5 updates. Further upgrades are expected in November. Chesky described 2024 as “a year to improve our core services.”
By analyzing tens of millions of customer service complaints and approximately 15,000 social media posts, Airbnb was able to create a “hit list“Improvements that Airbnb needs to make include more transparent pricing.
For example, Airbnb historically added cleaning fees and taxes to the price when you reached the final checkout screen. This means landlords can list their properties at extremely competitive prices to attract guests and hide exorbitant cleaning fees at the last minute.
Prices for renting space on the map will now include all fees.
Additionally, Airbnb’s new listing verification system can identify and remove fake listings, and its search functionality has been improved with new filters for king size beds and pet-friendly homes.
Although Chesky acknowledged that many of these improvements were actually intended to close serious cracks in Airbnb’s foundation, He’s optimistic that the revamp should solve some of the company’s long-standing problems.
“Hopefully, by next travel season, service will be substantially improved,” he said, looking ahead to next summer. “Then you’re going to start seeing a lot of new stuff coming out of Airbnb.”
Chesky’s advice to landlords
While much of Airbnb’s overhaul has focused on the customer journey, Chesky did have some words of wisdom for hosts looking to make more money: Lower your prices.
“A lot of people know our services from a pricing perspective,” he said. “The cheaper Airbnb is, the more bookings we get.”
As one
Here’s the thing about hotels: they don’t
Let you do the chores, the prices are predictable, and there’s a good chance there’ll be a bar on site. https://t.co/NAf8vilmzc— b-boy bouiebaisse (@jbouie) April 5, 2023
Profit-hungry landlords may want to keep this in mind when charging tenants extra to make beds and take out trash.
“We want prices to move and be competitive with hotels, which is really important,” Chesky said, adding that he encouraged landlords to check the going rates for hotels in their area “so they can understand what’s going on.” “Travelers get information on other platforms. “
“When our landlords offer better deals, they tend to make more money,” he added.
Svlook
