Skift Take

Don't miss Airbnb co-founder and CEO Brian Chesky in one of his most comprehensive sit-downs ever, on stage at Skift Global Forum with Skift founder and CEO Rafat Ali. Watch as he talks about why the future of travel may be potatoes (joke) and why performance marketing is like a drug (no joke).

An enthusiastic Airbnb co-founder and CEO Brian Chesky took to the stage at Skift Global Forum in New York City on September 21 and made his case for why we are entering a “golden age of travel” during a wide ranging conversation with Skift founder and CEO Rafat Ali.

The talk with Chesky was a fitting final session for this year’s forum, as he pulled together many of the themes discussed over the previous days, including new remote work trends, corporate travel and the value of experiential travel.

Watch the full video of the conversation, as well as read a transcript of it, below, to hear Chesky, including his thoughts on the blending between between travel and living, between work and leisure, and why travel is being redistributed outside the major cities.

Interview Transcript

Rafat Ali: All right, folks, you guys are ready for this? Everybody ready? Thank you, Brian, for being here.

Brian Chesky Thank you for having me here.

Ali: It’s become our annual tradition.

Chesky: I know. Now two is a tradition.

Ali: Two is a tradition. You opened last year’s conference, now you’re closing this year’s conference. I guess, next year, you’ll be in the middle somewhere. Well, thank you for being here. Obviously, anything you say is of high interest, so I’m so glad you’re here. So, you have been the biggest proponent of how the world has changed.

Chesky: Yes.

Ali: … and what that means for travel. You’ve said travel will never come back to what it was pre-pandemic.

Chesky: Right.

Ali: All the remarks you said last year at Skift Global Forum, in many ways they continue to play out. Is there any pullback you’re seeing in terms of things going back to normal in terms of length of stays, are they shortening back to what it was pre-pandemic, et cetera, et cetera?

Chesky: Not yet. I mean, so before the pandemic, Airbnb was a primarily cross-border business, where you’ll go to another country and stay in the city. And 80 percent of our business was either urban or cross-border. Then the pandemic happened, people couldn’t go to cities, they weren’t crossing borders. So, what they did is two big phenomenons happened. They would get in a car and they’d travel not by plane, but by car, like 200 miles away, which is basically the length of a tank of gas. And they would stay not necessarily in big cities, but in these small, non-urban destinations, in these really big homes with other friends and family, and the length of stay increased because people weren’t tethered to an office.

So, those two trends, people not just going to 100 cities, going everywhere, that’s here to stay. In fact, there’s a really interesting step. More people now travel to Austin on Airbnb than Barcelona. More people travel to the Alabama Gulf Coast than Madrid. The Catskills in Hudson Valley are bigger than New Orleans. We could go down the list and what’s happening, isn’t that everyone’s going to the Catskills. It’s that everyone’s going everywhere. They’re not all concentrating in the same place.
Length of stay. We’re not just a travel company. Half our business is still longer than a week or approximately, by nights. And a fifth of our business is remained longer than a month, but we are seeing some return of cross-border. We’re seeing a return of urban travel. Where we’re not seeing as much yet is Asia. Asia is laggard, because Asia is very much a cross-border business. Asia’s not really a domestic travel market, for the most part, at least for us. And so, there’s not a lot of movement across borders, but what we’re seeing, basically the summary is, all of our old business is now returning, except Asia’s a little laggard, but the new trends are here to stay.

Ali: And so, cities. New York City, obviously, famously people said, “Cities are dead.” Et cetera, et cetera. Are you seeing urban stays back to the pre-pandemic level yet?

Chesky: Not to the pre-pandemic level, but it’s somewhere in between, but it’s still very, very strong. New York City isn’t over. It was never going to be over.

Ali: Well, if you see this week traffic, there’s no way it’s over.

Chesky: Yeah, it’s not over. It’s never going to be over. But the other thing that is 100% true is no single city, I don’t think, maybe New York is an exception, but generally speaking, cities will never be as important as they were before the pandemic, because it used to be the place to be was a city. And now I believe the place to be is the internet.

In other words, you can do your job from almost anywhere. Approximately, let’s call it, I don’t know the exact numbers, but maybe half of the jobs in the United States are jobs that can be basically done by a laptop. Now the other half, you have to be somewhere. But let’s say, the jobs on the laptop, I read a Wall Street Journal story yesterday, by Gartner (research group), that said only of the 187 companies they surveyed, only 5% are returning to the office five days a week.

Ali: This is true in New York as well, by the way.

Chesky: Yah. And so, the whole world’s not going to be totally remote. We’ve really embraced more remote work. But I can say that the days of five days a week in an office are completely over. And the proponents of it, these are probably people in a different generation, closer to my parents’ age.

But if you want to look at how people live in the future, just look at young people and young companies, and they are living in a really distributed, really remote way. And the best people are going to live everywhere, they’re not going to live in a commuting radius around you. And so, the number one benefit after compensation’s going to be flexibility. So, living remotely, working around the world, is here to stay. This is completely changing, I think, how we’re going to live.

Ali: And of course, you’re not just talking, you’re walking the talk. By the way, I should mention this, we will take questions. So, people, if you’re watching online and as well as here, if you have questions, please use the app and I’ll try as much as possible.

But you’re walking the talk, which is for your company, you’re probably the largest company, as an example, that has basically said, “Live and work anywhere.” It’s been what, six months now?

Chesky: Yeah, probably six months.

Ali: What are the early lessons?

Chesky: I have a couple. Number one, the world is going towards remote work and I think anyone that doesn’t believe that is basically betting against where the entire trends are going. I always thought if you want to, like I said this before, but I always thought 20 years ago, Silicon Valley and young companies defined the open floor plan in onsite perks. And I thought, to look to the future, let’s look to young companies and young companies were all embracing remote work, but we didn’t want to do pure remote.

I think pure remote is not good, maybe it’s good for some people. Zoom is really great for certain things. Zoom is really efficient. It’s very effective. Anyone who says you can’t innovate remotely, our lesson is, we’ve actually done more innovation on Zoom over two years, 150 upgrades, than we ever had in an office. The problem is this though, think about what’s happening in the world right now. Suddenly you used to live in New York City, you moved to Connecticut, where you work out of your house. You used to go to an office. Your office is now Zoom. You used to go to a mall or a store, that’s now Amazon. You used to go to a theater, that’s now Netflix. You used to go to the grocery store, that’s now Instacart, your house. You used to go to a restaurant, maybe now that’s Door Dash. You could literally never leave your house. And if you never leave your house-

Ali: But your business will be dead if that happens.

Chesky: If no one ever leaves their house, that’s a big problem for us. And if no one ever leaves their house, what’s also happening? We’re glued to screens. And if we’re glued to screens all day, then I think there’s a risk that we recreate the movie WALL-E, where we’re all in these pods, staring at screens, endlessly scrolling. And I think that’s actually a really dystopian way to live. People need connection.

More than half of Americans identify as lonely. You know the loneliest people in America right now? They’re teenagers. Teenagers are lonelier than people in nursing homes, as an age cohort. This is insane. The more connected we get to the internet and the more time we spend on screens, the less lonely we feel and the worse mental health gets.

And so, here’s my whole theory. Why will people leave their home in the future? To travel. And they’re going to travel, not just for fun, but to see people. Business travel, I always thought it was never coming back to the way it was, but I knew it would come back. But business travel’s not going to be about that sales meeting. It’s going to be about much more meaningful bonding, longer trips. And so, I think that we’re about to experience a golden age of travel.

I haven’t been able to listen to all the talks before me, but my view, my certainly contrarian view, is I think a lot of people have been talking about how we’re doing compared to 2019. I’m like, that game’s over. First of all, we’re not going back to 2019 any more than we’re going back to 1950. But more importantly, I think there’s a new golden age of travel upon us. I think travel and I think even the industry, the analysts, the experts of travel, are maybe even underestimating the potential of travel. Because you have to model the fact that you have hundreds of millions of people that are glued to screens all day. They want to leave their house. Travel’s going to be the way to do that. And there’s not a lot of competition for travel, as far as things to do in the real world.

So, I think that’s good. It’s not just good for Airbnb. It’s frankly, probably good for everyone at this conference. So, I think there’s a new golden age of travel. Living and traveling are going to blur together. We’re not all going to Vegas, Rome, and Paris. It’s going to continue to stay redistributed. And it’s going to be less about landmarks, less about that business meeting, and more about human connection, whether with companies or relationships.

Ali: The one thing that is coming back from 2019 for you, your business, is your focus on Experiences.

Chesky: Yes.

Ali: Talk about that. So, Experiences was deprecated, is that the software term?

Chesky: It wasn’t deprecated. That would be like it’s dead. It was put on hold, it was paused. Deprecated is bullet to the head, not coming back. So, we’re not doing that. So, what basically happened was, we started Airbnb and a lot of people thought it was a completely crazy idea. I remember telling somebody about the idea and he said, “I hope that’s not the only idea you’re working on.” And of course, Airbnb took off. And then suddenly this idea that people thought was completely crazy, strangers living with other strangers, took off and it’s been used more than a billion times.

And I started thinking to myself, “The biggest asset in people’s lives, isn’t their home, it’s their time.” And we’re not trying to get into every service, but we started noticing people offering experiences, “I can teach you how to make pasta or do a walking tour.” Or, “There’s like concert.” Or, “I could show you around the city.” And so, we launched Experiences in late 2016. It was doing pretty well. We were getting millions of bookings a year.

I thought 2020 was going to be the breakout year for Experiences. And instead, suddenly the whole thing got on paused. And so, any network-based business that has to pause, it does this and you’ve got to re-crank it. And it takes sometimes multiple years to get the network back to where it was. Experiences are now back to where they were pre-pandemic. And we haven’t made a lot of investment in it. We were really focused on this travel rebound of the century. We thought travel was going to rebound greater than anything we’ve ever seen since World War II. It happened. And so, now over the next year or two, we’re going to make some ample investments in Experiences. And I do think that’s part of the next chapter of Airbnb. So, stay tuned. I think there’ll be a product refresh in the future.

Ali: So finally, you’ll break out Experiences as a separate line item in your SEC filings, because we’ve been looking-

Chesky: I’m not sure about that part. I don’t think about that part. That’s an interesting aside. Not to get too inside [inaudible] organizational stuff, but before the pandemic, we also had 10 divisions. Like almost every other corporation, we were a divisional structure. We had a homes division. We had a property management division. We had a hotels division. A flights division. A content. Experiences. China. Airbnb business travel. We had dot org. We had all these divisions. And when the pandemic happened, we lost 80% of our business in eight weeks. And we had to basically shutter all these divisions. We went back to a functional organization. So, we think of the whole company now as much more integrated.

Ali: And so, Stays, Experiences. You were thinking about doing something in the airline booking. Didn’t happen.

Chesky: Yeah, that’s not going to happen any time soon.

Ali: So, you’re not at least for today, thinking about other … Because one of the things I heard you talk last week, which is, one of the things you are thinking through is, “Where do I go?”

Chesky: Yeah.

Ali: And this is what, with the homepage refresh that you did earlier this year, you’re trying to solve the funnel. You’re trying to invert the funnel.

Chesky: Invert the travel funnel. Yeah, we’re doing a lot of things that are different than the other travel companies. Not to say it’s better or worse, but just to say, Airbnb’s so different, so why wouldn’t we do things differently? I think classically in travel, listen, the way people have searched for travel in my recollection, is it doesn’t seem like it changed very much for 25 years. I have memories of Expedia in 1995, you go to a homepage and there was a box, a search box, and asks, “Where are you going?” Because it presumed you knew where you were going. You type it in. Then there were dates and you would check in and check out. And 25 years later, that’s the way most travel is.

The problem is, I think that’s a problem for all these uses. If you’re going business travel, that’s great. But we’re in 100,000 cities. Do you think people can think to type 100,000 places in a search box? No. So, they type in Rome and Paris, but it turns out, many people are more flexible today about where to travel. So, we decided to invert travel. Most travel is organized or categorized by location. And we said, “What if we added a second access of categorization, type of space, like a tree house, an igloo, a castle, or an activity, like vineyards where you can go wine tasting?” And we totally turned it on its side.

And we had a goal. What if one day, most people like Netflix, aren’t typing something into a search box, they’re browsing? So, it’s more browsing than searching. And if it’s more browsing than searching, this is strategic, because number one, we are truly top of funnel. A lot of people think top of funnel is flights, it’s not. You can’t book a flight until you first decide where to travel to.

Ali: Can I push back on that?

Chesky: Sure.

Ali: So, people are not searching for flights first, because it’s what they want to do, it’s because they’re the most unpredictable in terms of pricing. If you wait for flights, it becomes more expensive. Hotels, typically, historically, before Airbnb became a phenomena, typically you could book in a shorter window. So, that’s why air became first and then hotels came later.

Chesky: Yes.

Ali: But you’re saying something else. You’re saying that you really, really want people to choose destinations based on how they discover places in Airbnb?

Chesky: There’s a really big change that I want to highlight, because listen, will some people choose where to travel based on where they can get a cheap flight? They will. They’ll say, “Wow, I can travel to Iceland for less than $500. And I’ve always wanted to go to Iceland. So, I’m going to use this flight as a reason to make a purchase.” I don’t think that’s going to be the majority of use cases. I think the majority of people are going to have more considerations for where they travel.

Before the pandemic, the simple model is the way travel worked for decades and decades and decades, is if you look at where travel was concentrated, it was concentrated in the top 100 markets in the world and they’re the cities that every one of us can name. And then what happened is when borders got shut down and people couldn’t go to cities, there was no reason to go to cities, because everything was shut down, people discovered the rest of the world.

Suddenly, they got in a car and a lot of people started realizing, a really easy way to save money in traveling is to not fly in the first place. If you don’t have to book that flight and you can get in the car and you just saved $500. And so suddenly, people needed a reason to go though. Why would I drive somewhere within 200 miles, is there any interesting place to go? You can go to a national park. You can go to the small town. You can do this thing. And so suddenly, the whole thing got turned on its head.

And so, what we want to do now is we want to be more in the inspiration business. You come to Airbnb and we can point demand to where we have supply, that helps solve our supply issue. We can highlight what makes us unique and get into the top of the purchasing funnel, which is basically giving people ideas of where to travel based on what’s available. And yes, flights would be a part of that purchase. We’ve decided now not to do it. Transportation and flights are more of a commodity. The problem with commodities for us, is there’s not as many ways for us to add a differentiated layer. So, it’s purely a integration question, a connected trip integration question. And then, that just becomes a lower priority for us.

Ali: Can we play this video that I wanted to show. It gives a sense of what you’re trying to do, particularly with the homepage.

Chesky: Okay. Can’t wait to see it.

Audio: (singing)

Ali: So, you’re really trying to make OMG! Category happen.

Chesky: Oh yeah. Yeah. No. That potato, by the way, was a potato in the Idaho Country Fair. It was owned by the Idaho Potato Commission. And they’re trying to dispose of this giant potato. What do you do with a 12 foot potato? This woman named Christie said, “I’ll take the potato off your hands and I’ll dispose of it.” But she didn’t dispose of it. Instead, she turned it into an Airbnb, and this potato outside of Boise, is now got, I think a six month waiting list. I’m not saying potatoes are the future of travel. I’m not saying that, but I’m not saying —

Ali: That’s the headline. Please tweet it. Please share that. Go ahead.

Chesky: But I’m not saying they’re not the future of travel either. So, we’ll have to see, but people actually do travel for that potato. It’s ridiculous. It’s crazy. And it’s an extreme version of a more reasonable, rational point. That suddenly for more people, an interesting home becomes the destination, because the longer you’re away from home, the more you want to be in a home. And maybe if you want to go somewhere for two days, you want to go to New York, because you want to see Broadway shows. But if you have to go somewhere for a couple weeks, maybe you want a yard and maybe you don’t need to be in close proximity to Broadway. You just need somewhere comfortable. And suddenly, the Catskills or Hudson Valley become really interesting.
We almost have more people traveling to the Catskills and Hudson Valley than New York City on Airbnb. They’re starting to converge. There’s something really interesting here. And I think categories is a multi-year bet. It’s going to take years for us to expose people to another way to search. But home, as just in categories, have been viewed nearly 200 million times since we launched the feature. So, clearly I think it’s onto something.

Ali: Sounds-

Chesky: We’ve also seen wishlist usage go up.

Ali: So, wishlist is what you would think a wishlist would be.

Chesky: Yeah. It’s like a bookmarking tool. And in travel, we think that’s really important, because that shows both, are we in the inspiration business. And also, that’s showing that group size is getting bigger, that travel’s becoming a way for people to travel and connect with one another. So, I mean, travel is increasingly becoming about connection and the most important connection is people you’re traveling with. Your family, your friends, or people you work with. It’s less of a solitary thing. Group size are getting bigger. Home sizes are getting bigger. It’s totally changing.

Ali: You did have a little bit of emphasis pre-Covid on Airbnb for Business. I think that was the name, maybe.

Chesky: Yeah. Airbnb for Work, I think.

Ali: Yeah. Airbnb for Work. Is there some emphasis of that coming back, corporates, working with corporate companies?

Chesky: I think we’re looking at it again. It’s never going to be probably the same percentage of our business as it was before the pandemic, in a very narrow use case. But I think that business travel could boom. I think there could be a huge business travel renaissance, but I don’t think it’s going to look like business travel as we knew it.

Ali: Right.

Chesky: My instinct is, the first thing I saw, I think maybe you or maybe … I can’t remember where, an article. That shows that a huge amount of business trips are converging with leisure trips.

Ali: Yeah. That was —

Chesky: And I always thought this, that business travel, like traveling, living, and working, would all converge.

Ali: Well, you’ve been living this even before.

Chesky: Yes. I’ve been living on Airbnb. And am I on a business trip right now? Am I on vacation? Am I living here? And those distinctions are going to go away. We used to live in a world where you live somewhere 50 weeks a year, you travel for two weeks on vacation, and then a few weekends here and there, you do a business trip.
And that probably described maybe, actually, a lot of people in this room. And that might still describe some people, but suddenly you have a world where people don’t have to be so tethered to one location. Some people have to be, like a school teacher has to be somewhere nine months year. Although, the other three months they can move around. But a whole bunch of people with laptop jobs are suddenly untethered. And so, I think this opens the whole world to where you can travel.

Ali: So, going back to the video and this is actually another point, which is, you are now very vocal about not spending that much money on marketing.

Chesky: Right.

Ali: You’re 18 percent or something maybe in the last quarter.

Chesky: Eighteen and 20 percent. Yeah.

Ali: And the point about the video is you’re very good at creating your own storytelling.

Chesky: Yes.

Ali: You’ve always been very good at creating your own storytelling. What type of marketing are you leaning into now? What is that 18 percent? And obviously, that’s changed from the pre-pandemic, completely.

Chesky: Yeah. Before the pandemic, we were spending, and I don’t have all the numbers right on top of me, but we were spending —

Ali: Hundreds of millions.

Chesky: Well, close to a billion dollars, and most of it was performance marketing. Don’t quote exact numbers, but if it was around $800 million a year in performance marketing, I wouldn’t be surprised. And something happened. We had to basically reduce all of our expenses. So, listen, we lost 80 percent of our business in eight weeks in February and March in 2008. And when you’re our size, you lose 80 percent of your business in eight weeks, it’s like you’re an 18-wheeler, you slam on the brakes and then suddenly, only bad things happen.

So, we had to reduce expenses. And the first thing we did is we just paused all marketing, including all the performance marketing. And something remarkable happened. Our business came back to 95 percent of the prior traffic without any of the marketing. And it meant that we were probably buying customers that were booking homes, that we’re cannibalizing free traffic, that would’ve booked those homes anyway.

So, it wasn’t like the people running the marketing department were idiots, they knew what they were doing. It’s just that we got to do the experiment no CMO has ever done. What happens when you turn off 100 percent of the marketing? It turns out it wasn’t as incremental as we thought. And so, we pulled back. We now spend half as much as a percent of revenue in marketing as before. I think it was moving from 40 percent to less than 20 percent.

And now we think of marketing really differently. We think of marketing as education. I think performance marketing is a drug. I think you’ve got to be very careful about being on the drug of performance marketing. It’s a drug that once you’re on, you don’t get off. And you want to grow next year, based on this year’s comp, you need to spend this plus X on performance marketing. But the other problem is the more money you spend, the lower the ROI, because the most efficient cohorts are the first cohorts. And so, it gets harder and harder and harder and harder.

And then one day you wake up and your website, it looks like a casino and you’re marketing it like a casino. And I think that’s not a good thing, because if we’re going to live in this golden age of travel, where travel is amazing, it’s magical, then you should celebrate it. So, the most important thing we actually do is PR. Like, things like this. I do this out of self-interest. I want to shamelessly tell the story as much as we can.

We have half a million articles a year about Airbnb and that might be the most important marketing we do. Then we do what I would call product marketing. We don’t even really do brand marketing. I describe brand marketing as marketing the brand. This is actually marketing a product, that we call Categories. So, if you see Apple, Apple doesn’t actually do brand marketing in the narrow sense. They did the Think Different campaign, but they do marketing of products.

Ali: The products.

Chesky: We might call it brand, because it’s TV and billboards, but they’re marketing a product, not the brand. And most of what travel is, is performance marketing or brand awareness. And we think that the best way to do it, or at least the one we’re really interested in, is really shipping new products, new innovations, and educating people about those new products and innovations.
So, we’re marketing AirCover right now, which is topped up on protection for guests. It’s the closest thing we have to Prime, might be the precursor, which is our Achilles heel, has always been inconsistency. If we can make the service more consistent. And then, Categories is really changing behavior for travel. So, that’s how we’re doing it.

Now, to be clear, I still believe in performance marketing. I just don’t believe we should ever spend what we did. We think of performance marketing, not as a way to buy customers, but to balance supply and demand. So, imagine you walk into a room. If you want to light up the room, you shouldn’t turn on a bunch of flashlights or lasers. And that’s what performance marketing is. You should turn on the chandelier. And so, brand marketing and PR is the chandelier and performance marketing is a laser. So, you should use a laser not to light up a room, but to laser in on perfectly matching supply and demand. And that’s how we treat it.

Ali: That was a great analogy. Questions. There’s a lot of questions. “Right now, Categories seem to be built around physical attributes of the home. Will you add host information as a Category?” This is an ongoing question of how much host information should you surface? And people wanting some more transparency around host information.

Chesky: Oh, hell yeah.

Ali: As a security, as just in general. So, what’s your sense of how much host information you can continue to add in the product itself?

Chesky: A lot. I mean, I think that it’s hard to know the breakdown, but there’s a group of people that don’t care a ton who the host is, and where the host is maybe a property management company, and who they are it doesn’t matter as much. But there’s probably a much larger group of people that want to stay in a real house. They care who the person is. The host is proud of what they have to showcase. And so actually, yes, the answer to your question, we do think host information could be really interesting. It’s a meaningful percent of our business, you’re still staying with a host. What if you could stay with a musician, and you could see the structured data about who that person is? So, I think matching people based on their personal attributes, not just the properties, is key.

The way I think about travel historically is the way I think about a lot of commerce. You have a commodity that’s one-size-fits-all, that’s sold to a customer that’s basically anonymous. I think where it’s going with Airbnb, is it’s more of a person to person, the supply is unique, it’s one-of-a-kind and it’s matched to a one-of-a-kind person. And to do matching you need structured data, right? So, you need to basically take an attribute on two sides and match those attributes. So, that requires us to have a catalog.

So, to have a tree-house category, we had to actually verify the data of the tree houses were actually tree houses, and then we had to actually label all the photos. So, when you see a tree house, the exterior is the one thing that shows. So, we had to take a library of tens of millions of photos. So, a lot of what we’re doing is really investing in structured data, to try to take things that are one-of-a-kind and turn them a little more into SKUs.

Ali: Can we add five minutes to the clock, Brian? Okay. So, I had a follow-up question there. Why do property managers complain so much about Airbnb?

Chesky: I don’t know.

Ali: So, I’ll elaborate. In a two-sided marketplace, which is what you are one of the prime examples of two-sided marketplace, do you ultimately have to choose a side?

Chesky: Oh, I see.

Ali: And it seems just as an outsider, that you’ve always taken the side of the consumer.

Chesky: That’s funny, because often they say we take the side of the host. I think we’re supply constrained, but you have to care about both sides. You want both sides happy, but ultimately the purchases are dictated by demand. So, you need enough supply, demand needs to be happy, if you were to simplify it. That doesn’t mean hosts don’t need to be happy. It doesn’t mean you don’t need enough demand, but these are the basic dynamics of a marketplace.

And so, what we often will tell hosts is, we’ll say, “One of the reasons why we do this X feature, is because we want to get you as many bookings as possible. To get you as many bookings as possible, we need to be a trusted platform where people come to Airbnb and they know if there’s a problem, they can get their money back.” And in the long run, we think it’s good for hosts.

I think that actually we do quite a lot of surveys on host sentiment. In the beginning of the pandemic, a lot of property managers weren’t happy with Airbnb, because I overrode $1 billion worth of cancellation policies. So, what happened was, the pandemic occurs and all these people wanted refunds. They said, “I can’t get on a plane. I feel unsafe traveling.” But the property didn’t allow for a refund. And we had this moral conundrum. Do we honor the cancellation policy and then all these people might be put in a moral conflict to travel? Or, do we override the cancellation policies? I decided to override the cancellation policies and a lot of hosts, mainly property managers, because they were the ones with less flexible cancellation policies, were really upset at Airbnb.

I stick by the decision, but it was a wake up call that you need to treat your suppliers as your partners. And I think that what we worked on since then has been really keeping them in lockstep with us, each step of the way, and continue to develop new features and innovations for them. And this November, we’re going to have quite a bit of new features, but the host sentiment is really high right now.

Ali: We’ll quickly jump through a few things. Fintech, I know you’ve been talking about … You’re very public. You do this very interesting thing on Twitter every year, where you ask, “What should we build?” Right, is that the version of what-

Chesky: Yeah. Like, if Airbnb could ship anything this year, what should we ship?

Ali: And you actually respond to a lot of those.

Chesky: Yeah.

Ali: “I’m working on this. We’re going to do this, we’re going to do that.” I think in the last one you did a few months ago, you said that FinTech or more ways to pay, and you said it’s imminent.

Chesky: Yeah.

Ali: How are you thinking about fintech and Airbnb?

Chesky: Well, I think there’s so many things you can do with money, and I think the thing to remember is, Airbnb, we launched before Stripe existed. And when Airbnb launched, this is a crazy thing, I do not recall in 2008, there was another website on the internet where you could go to the website and you could pay another person on the internet directly through a integrated gateway platform. So, before us, there was eBay, there was Etsy, they had PayPal integrations. But if you recall in 2007, 2008, you couldn’t pay through the site, they would send you to PayPal.

Ali: Right.

Chesky: And so, there was no checkout that was integrated. There really wasn’t the idea of an arbitrage model where you pay a third-party, us, a mediator. And so, payments is in our DNA. We’ve handled more than $300 billion in payments through our custom built payment platform since we launched. We’re looking at a lot of new things with payments. I mean, there’s a really big trend on buy now, pay later, and pay with installments.

Ali: Will that come?

Chesky: Yeah, there’s definitely going to be things in that area.

Ali: Subscription? Please announce it, just because we’ve been asking this question for seven years.

Chesky: You will be one of the first people invited to the launch of-

Ali: To the launch of a subscription Airbnb.

Chesky: Yes. I invited you last time. I only invited a few people.

Ali: Yes.

Chesky: We’re looking at a lot of things on payments. I think it’s really interesting.

Ali: “Given the stays are longer, how are you making those expensive stays more affordable and accessible for people who want to live on Airbnb?”

Chesky: It’s a great question. So yeah, we’re working on this. I mean, there’s a number of things we’re focused on. One is, we want to make sure that Airbnb is an incredibly affordable option. We get a lot of feedback around fees. We also hear about the-

Ali: Fees. Cleaning fees, you hear a lot.

Chesky: … cleaning fees. And one of the challenges of cleaning fees is say, if I book a four bedroom house and I stay in one bedroom for a night, I pay the same cleaning fee than if I have a whole family, we were there for a month. And I think helping hosts understand how much they’re charging, what kind of deal they’re offering. But pricing on Airbnb is like, you start pulling a thread of a shirt and if you keep pulling it, pretty soon you have no shirt.

So, the whole thing is really, really integrated. So, we are very much focused on longer stays. I think this is going to be a huge part of our business. We know we need to make that more affordable. And so, we are working on getting more inventory that’s exclusively long-term stay inventory. This would essentially be cheaper, but we’re also looking at different models to make it really interesting for people.

Ali: Last quick question. I know you announced that you’ve been living on Airbnb for the last, how many months now?

Chesky: Yeah. Off and on, but since February, I probably stayed in 20 different Airbnbs.

Ali: And are you still continuing that?

Chesky: Pretty much. I’m going back to San Francisco tonight, but I think I’m going to be semi … Well, until I have a family, and they’ll probably stop that, but until then, I’m going to be semi-permanent-

Ali: Welcome to the real world, man.

Chesky: Exactly. Exactly. But I think I’m going to take advantage while I can, and see the country. I’ve been to over a dozen cities.

Ali: And this is all, you’re doing local in the U.S?

Chesky: Mostly U.S.

Ali: Mostly U.S.

Chesky: I spent a month in Europe, in August. So, that was not US, obviously. But at the beginning of the year, I went to Nashville and Atlanta and Miami and Charleston. And I went to Ann Arbor, Michigan, where I stayed in the Frank Lloyd Wright House. And I got to go to all these different places, multiple places in the State of Colorado. And it was amazing.

And I think that I realized, number one, you got to get out in the world to understand the world. One of the big risks of a CEO is you just don’t understand how regular people live, you don’t understand your customers, you don’t use your product. And the best way to understand how your product is being used, is not to look at spreadsheets of data, that’s helpful to look at, but you got to have a deep feel. What does the data mean? Why are people feeling this? Why are people saying this? And so, you got to get out in the field. I call it getting out of the laboratory into the field.

And so, I’m still doing it. I figure you got to walk the talk. And I started realizing as I was doing it, this might be a trend for how more and more people live. And so, let’s build for it. So, let’s build a product that we love for ourselves, hoping then one day, millions of other people use it.

Ali: Awesome. Well, thank you. On that note, let’s end it here. Thank you, Brian.

Chesky: Thank you very much.

Ali: Thank you for coming again. I appreciate it.

Chesky: Thank you.

Ali: All right. Thank you.


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Tags: airbnb, ceo interviews, future of lodging, sgf2022

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