Airbnb Is Back With Updates

Good morning, readers! I hope you're have your reading glasses on, this is a long one.

Let’s hit it.

On the menu today:

• Skift Interview With Airbnb’s Brian Chesky
• Airbnb’s winter release
• Inspirato earnings
• 5.5 million vacant houses

Winter Release Upgrades

The much-awaited Airbnb’s winter release is here.

Among the list of embellishments is "Guest Favorites,” new tools for hosts and a review revamp. 

The Guest favorite badges will be used to identify highly-rated properties. Around 2 million of Airbnb's 7 million listings will receive this badge, signifying ratings averaging above 4.9, strong reliability, and quality customer service. Guests can filter their searches for "Guest Favorites." 

New tools for hosts include: AI-powered photo tours of their properties, integrating smart locks into their Airbnb accounts for unique access codes, accessing more transparency in total pricing, comparing prices with competitors, and enhanced earnings and messaging tools. 

Additionally, Airbnb is revamping ratings and reviews for a more guest-friendly experience, offering sorting options and additional reviewer information.

Chesky Speaks

Skift editor-in-chief Sarah Kopit sat down with Airbnb CEO Brian Chesky (and his two big Golden Retrievers) and here's the gist:

On Hotel Prices

"And I think a year from now, by the way, hold me to this prediction. Next release will probably be next October. We're going to sit, if not in this room, a different room. And I want you and I to revisit if hotel prices are higher or lower than this time. And then are housing prices higher or lower? You’d think the theory is that if we're driving up prices, if restricted, the prices will come down. If it were meaningfully that, we should check in a year. And we'll see," Chesky said.

On Cleaning Fees

"We do want to make sure that people aren't surprised, but what we don't want to do is incentivize hosts to have a really low nightly rate and then have a high cleaning fee and then use that to appear cheap, and then progressively look more expensive," Chesky said.

On Experiences and the Next $100 Billion Idea

Here Chesky drew an analogy to chatbots and ChatGPT.

"Do you remember the term chatbot? How it was like a phrase and just everything was gonna be a chatbot? And then it like never happened for six, five years. Never heard about chatbots. And then last November ChatGPT came out – that is a chatbot. And now, everybody knows this stuff. 

You're calling your chatbot - you’re calling it AI. But it's a chatbot. 

And so I feel like Experiences is a little bit like that. It is going to have this Cambrian explosion within travel. But we're in the chatbot phase, not the chatGPT phase of experiences," he said.

"I think there’s a $100 billion company that can be launched just doing experiences. I don't think we've cracked it. I think we've created something special. But if we cracked it, it would be the size of Homes."

Airbnb = Hotel?

Airbnb’s potential plan to counter the drop in listings in New York City: Boutique hotels.

CEO Brian Chesky, when discussing the impact of NYC regulations during Airbnb’s earnings call last week, said adding more boutique hotels is “a real opportunity,” Skift’s Dennis Schaal writes.

Boutique hotel listings on Airbnb aren’t new. Many boutique hotels are already listed on HotelTonight, the app Airbnb acquired in 2019.

Then how is this different, you ask?

• HotelTonight’s relationships
• Enhanced personalization
• AI-powered travel agent competency

Airbnb May Add More Boutique Hotels as NYC Listings Collapse

More Savings Than Earnings for Inspirato

Losses continue to mount for luxury hospitality brand Inspirato. The company is burning cash at $15 million per quarter and its revenue is down. But in his first call with analysts and investors as Inspirato’s new CEO, Eric Grosse said his goal remains the same: improve operational efficiency and liquidity. 

And the message was basically this: Hang tight, we are making the necessary cuts to stop the bleeding. 

Inspirato hopes to save north of $50 million dollars by the first half of next year, mostly coming from software savings, layoffs and pruning the portfolio. This is how the math works: About $30 million of the savings are expected from trimming the portfolio and terminating leases, about $3 to $5 million from a reduction in software expenses with the rest from headcount cuts..

“Yes, we are spending $60 million on an annualized basis, but we hope to save north of $50 million, so down to a neutral level,” Grosse told Skift. 

In numbers, this how the third quarter looked for the company:

• Net loss of $25 million (EBITDA was negative $9.2 million) 
• Revenue declined 11% to $83 million. 
• $3.7 million of severance-related expenses

Inspirato Aims to Cut Its Way to Profit at Its Luxury Vacation Clubs

Yes Vacancy

A recent Lending Tree study reveals that America's largest metropolitan areas have approximately 5.5 million vacant houses, many of which serve dual purposes. Investors rent these homes as short-term rentals for part of the year and use them as vacation properties the rest of the time, offering opportunities for those with capital and credit. The 5.5 million figure does not encompass single-family homes purchased by investment firms for use as short-term or vacation rentals, by the way. 

Vacant properties, in real estate parlance, encompass vacation homes, investment properties, short-term rentals, foreclosures, and empty houses listed for sale.

Miami tops the numbers here: Lending Tree estimated that the Miami metro area has the second-highest vacancy rate in the country at 12.65%, with 339,451 homes vacant out of the 2,683,497 total units.

Europe’s Successful Summer

Third quarter numbers are out and European short-term rental markets, including Paris, London, and Milan. They continue to witness significant increases in supply and demand. 

In August, both Paris and London displayed an upward trajectory in supply compared to the previous year, with London experiencing 42% growth in average booked nights, while Madrid, Milan, and Paris each saw demand surge by over 20% in August 2023 compared to August 2022, data from Transparent showed. 

Top markets:

• Great Britain
• Spain
• Italy
• France

St. Louis Regulates

St. Louis, Missouri Mayor Tishaura Jones has approved two bills aimed at regulating short-term rentals offered on platforms like Airbnb and Vrbo, KMOV4 News reported. These bills, just like any other standard flavor of regulation, introduce various restrictions: a ban on parties and single-night stays, a requirement for operators to have an on-call agent to address issues promptly, limits on the number of rentals in multifamily structures, and a cap on the total number of short-term rentals one person can manage. 

Non-compliant operators may face fines and permit revocation. The implementation, including short-term rental applications, is expected to commence by the end of 2024.