Skift Travel News Blog

“Google will kill Airbnb,” tweeted Nick Huber, who writes about business and real estate, owns a self-storage company, and has 247,000 followers on Twitter.

Two people independently messaged me about the tweet, which has generated a few thousand “likes,” and hundreds of retweets since Sunday.

One Skift colleague said of the tweet: “Everything this guy says in his tweet thread is wrong.”

Conversely, a superhost in Europe messaged me about Huber’s tweet: “I would have to agree. Everybody loves a direct booking (both hosts and guests), with no whopping service charges.”

Google will kill Airbnb. pic.twitter.com/dpu2Khk9k7

— Nick Huber (@sweatystartup) August 28, 2022

Hosts Just Need to Put Links to Properties in Google … Hmmm

If only it were that simple.

Huber argues that hosts and guests can avoid Airbnb’s substantial fees, and both can save money with direct bookings. Actually, he claimed that Airbnb takes 25 percent of the transaction, mostly from guests, in the form of fees, which seems excessively off the mark.

After this story posted, travel industry veteran Drew Patterson tweeted that Airbnb revenue was only 13 percent of gross bookings in 2021.

Might also mention his math is wrong on margins / take rate. In 2021, ABNB did $6B revenue on $46B gross booking (13%) vs. his claim of 25%.

— Drew Patterson (@drewpats) August 29, 2022

One of the silliest things Huber tweets is, “All it takes is folks putting a little link to their software in the Google listing. Management co manages that directly. Way more revenue to owner and less cost to guests.”

Alas, graveyards full of startup companies from Palo Alto to Madrid and Mexico City are testimony to the fact that you can’t merely put a link on a Google business listing, and expect millions upon millions of customers to discover it, and then use it. It takes a mammoth amount of resources to attract direct bookings and for a vacation rental business to build their own brands.

Hey, direct bookings would be mostly great for hosts and, to a lesser extent, guests, but how can property owners and managers attract them?

If you look at the global hotel industry, it has done an admirable job over the last few years, spending huge sums in advertising to urge customers to book directly on their own websites, where they have the lowest rates, instead of using online travel agencies.

Hotels have made significant strides in this regard in attracting direct bookings, but the vast majority of them still rely on online travel agencies to attract price-conscious consumers who care little about whether they are staying in a Marriott or a Sofitel.

Hotel direct bookings haven’t killed Expedia or Booking.com. Travel, it is often said, isn’t a zero-sum game. There is ample room for multiple winners.

Property owners use Airbnb for a reason: Airbnb has a great brand, and attracts legions of guests who start searching for places to stay on Airbnb instead of beginning their trip-planning on Google.

How does the host with one or a handful of properties compete with that kind of market power?

Direct Bookings Have Risks, Too

And although guests can avoid Airbnb’s fees by booking direct with the host, they run the risk of having no one to turn to if the host or property turn out to be a nightmare. Whether or not they work as well as advertised, Airbnb has some insurance protections in place for both hosts and guests.

Airbnb critics will be quick to say that Airbnb’s customer service for guests can be challenging, but it’s often better than dealing with hosts who have no brand or track record to stand behind them.

On the question of Google “killing” Airbnb, the latter has for the past couple of years been able to grow while keeping the percentage of the revenue it spends on marketing — and Google — relatively low and stable.

In fact, Google’s travel vertical has a vacation rentals feature, and it hasn’t really distinguished itself or put much of a dent in Airbnb’s growth precisely because Airbnb, and other big vacation rental brands, have shunned offering their homes and apartments through Google vacation rentals. So Google is hardly usurping Airbnb on that front.

Google has certainly damaged the businesses of innumerable travel companies because of its near-monopoly in search and the way it preferences its own travel advertising features. Curiously, although most of the far-out theories about Google taking over the travel industry tend to say that Google will transition from an advertising to a booking platform and would become an online travel agency — a switch that Google has shown little appetite for — Huber isn’t even making that argument.

Instead, he’s arguing that Google will serve as a listing platform, and build advertising around it, and that hosts, with an assist perhaps from property managers, would see direct bookings flow like lava down a hillside because these offers are inherently the best and cheapest deals for both hosts and guests.

Both Google and Airbnb Face Headwinds

Google killing Airbnb begs the question of which of the two has momentum versus the other. Both face big antitrust or regulatory challenges, and it’s hard to choose which one has the more daunting obstacles.

A little deeper into his twitter thread, Huber retreats a bit from his Google killing Airbnb opener, and pleads for “nuance.”

“Of course Airbnb will always have users,” he tweeted. “But over time many guests will go on google, find a vacation rental in an ideal location, click through to that website & book w/o paying hundreds in fees. 20 yrs from now ABNB will be a glorified lead generator.”

When it comes to predicting the future of companies two decades from now, I’ll pass on that one, considering it is difficult to look even two or three years ahead to see what the business world would look like.

So, alas, in Huber’s view, his talk of Airbnb’s death was apparently bombast.

When a twitter user tells Huber he downplayed the importance of factors like trust and reliability when considering direct bookings versus reservations through Airbnb, Huber retreats a bit further, tweeting:

“I think there will be an increased number of guests going directly. You can do all of those things without giving a huge chunk to Airbnb.”

Finally, that’s something we can agree with: There are many hosts doing everything they can to generate direct bookings, and they’ll likely have a degree of success. But I don’t believe “Google will kill Airbnb,” or that Airbnb will close shop anytime soon.

Note: This story has been updated to include additional information on Airbnb’s take rate. It also clarified Google’s role in the travel industry.

Life is often a series of tradeoffs, right? Such is the case for Airbnb, which is testing new anti-house party technology in the U.S. and Canada that would steer some potential guests barred from booking whole homes toward private rooms and hotel stays instead.

“This anti-party technology is designed to prevent a reservation attempt from going through,” Airbnb stated in its press announcement about the technology, which had been piloted in Australia since 2021. “Guests who are unable to make entire home bookings due to this system will still be able to book a private room (where the Host is more likely to be physically on site) or a hotel room through Airbnb.”

 House parties have been a huge problem for Airbnb — and communities — for years.

Airbnb bans them and has for the last couple of years been conducting manual reviews of guests younger than 25 who might have few positive reviews from hosts on the site, or may be booking a home near where they live for just one night or two, for example.

With the tech that Airbnb has is testing in the U.S. and Canada, the manual review still happens after a booking is made, but Airbnb’s tech now looks at additional signals, may review people older than 25, and redirects many of them to optionally book hotel rooms, and private rooms in homes.

Many hotels, of course, wouldn’t welcome guests intent on conducting parties, but there is usually more security and other personnel to ward off problems than there is in a vacation rental where the host is usually not present.

Hosts apparently wanted less of a sledgehammer blocking all these types of potential house-party bookings, and the ability to accept bookings where the chance for a house party would be greatly reduced, such as when hosts are present during the stay.

“We have seen a 35 percent drop in incidents of unauthorized parties in the areas of Australia where this pilot has been in effect,” Airbnb said. “We are now ending the pilot phase in Australia and codifying this product nationwide. We are hoping for similar success as we begin testing this in the U.S. and Canada.”

Google Travel’s flight and hotel offerings gained the most desktop traffic market share in the U.S. during the pandemic while Tripadvisor lost the most on a percentage basis, according to Similarweb’s June data.

“Google Travel now owns one-fourth of all (U.S.) desktop visits to top travel sites,” Similarweb said.

In its earnings call about second quarter financials Tuesday, Google said travel and retail were the drivers of its advertising revenue during the period.

The following chart shows Google Travel’s U.S. desktop market share increased 6 percentage points to 24 percent in the first half of 2022 compared to the first half of pre-pandemic 2019.

U.S. Desktop Market Share Traffic Gains/Losses H1 2019 Versus H1 2022

Site	2019	2022
Google Travel	18%	24%
Booking.com	14%	16%
Airbnb	14%	15%
Expedia	13%	13%
Southwest	6%	6%
Vrbo	4%	6%
Marriott	5%	5%
Delta	8%	4%
TripAdvisor	9%	4%

Source: Simillarweb

“Booking has also gained 2 percentage points of share in the U.S., and only Kayak (-1 percentage point), Delta (-4 percentage points), and TripAdvisor (-5 percentage points) have lost share,” Similarweb said.

There are two points to keep in mind: These numbers don’t include traffic from mobile devices, and traffic to Google Travel often gets sent along to online travel agency advertisers.

Airbnb announced Friday that it selected Jay Carney, most recently head of corporate affairs at Amazon and a former White House press secretary with ties to President Joe Biden, to replace Chris Lehane as global head of policy and communications.

Lehane, known for his hardball tactics in running campaigns opposing tougher municipal and state regulation of Airbnb, left Airbnb months ago, and joined a crypto fund. Lehane has many political jobs on his resume, including serving as press secretary for then-Vice President Al Gore from 1994-2000.

Carney has ties to President Joe Biden, having served as his director of communications when Biden was vice president. A former journalist, Carney was White House press secretary under Obama from 2011-2014.

Carney, who will begin his role at Airbnb in September, will be part of Airbnb’s executive team and will “work with co-founder and CEO Brian Chesky to ensure that as Airbnb grows, we strengthen the communities we are in.”

In a statement, Chesky said Carney is adept at community engagement “and is committed to ensuring that Airbnb is a force for good.”

Airbnb’s impact on communities can be multifaceted. On the one hand, it generates revenue for local businesses, including hosts, and makes travel affordable for many who otherwise wouldn’t be able to vacation in such fashion.

On the regulatory front, Airbnb faces an outcry in many communities around the world that it is hurting the quality of life, and contributing to a housing crisis as long-term rental properties get taken off the market, and turned into short-term rentals for tourists.

“The potential for travel to promote economic and social good has never been greater,” Carney said of his Airbnb appointment in a statement. “I’m thrilled to be joining Airbnb to help guide its work to connect communities and people through travel, drive economic participation, and help us discover that while our differences are real, they are overwhelmed by our similarities.”

Carney is a board member of Urban Institute, which Airbnb said works on issues such as affordable housing, racism and healthcare matters.

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Despite the fears of recession and soaring fuel prices that have retreated somewhat in recent weeks, average daily rates for short-term rentals in the U.S. this summer jumped 7 percent year over year — and that’s nearly 30 percent higher than the summer of pre-pandemic 2019.

Those conclusions were part of an update to AirDNA’s mid-year 2022 outlook, which said U.S. average daily rate growth is highest in urban and coastal areas. (See chart below).

“As we look to summer 2022 (June-August), more STR nights have been booked than any other summer in history, as of the end of June,” the report said. “The previous record was set just last year, and the U.S. is currently seeing 12.3% more booked nights than at the same point in time in 2021.”

Short-term rental demand in big cities this summer, though, is still 28.3 percent lower than in the summer of 2019, AirDNA found.

In addition, AirDNA forecast that the U.S. supply of short-term rentals would jump 21 percent year-over-year in 2022 as both Airbnb and Vrbo increased their listings.

“With supply outpacing demand growth as expected, our outlook for occupancy is largely unchanged,” AirDNA said. “Our revised forecast now calls for U.S. occupancy to average 58.2% for the year, slightly lower than our 59.8% forecast in October.”

AirDNA’s occupancy numbers seems to be more bullish than those of Key Data Dashboard. The latter’s occupancy stats may skew more heavily toward vacation rentals specifically.

Occupancy rates in the U.S. in the third quarter (July, August and September) are currently at 39 percent, down from 45 percent during the same period in a standout 2021, according to Melanie Brown, director of analytics at Key Data Dashboard, which tracks vacation rental data.

Stubborn inflation and fears of recession pushed Airbnb, Booking Holdings, and Expedia Group toward marking 52-week stock price lows on Thursday, the last day of the second quarter, as seen in three charts below.

Airbnb, Expedia and Booking Holdings weren’t alone in their respective plunges, however. The Nasdaq Composite Index likewise was trading at a 52-week low.

These companies’ market caps were smallish compared with better times: Booking Holdings ($71.8 billion), Airbnb ($58 billion), and Expedia Group ($14.8 billion).

Many analysts had written off Booking Holdings as a fading also-ran after the blockbuster Airbnb IPO, but its market cap was considerably higher than Airbnb’s today, the end of the first half of the financial year.

We reported Wednesday that traffic and bookings for the trio were soft in June as compared with June 2019, and this could be a sign of a less-robust summer travel season than what many had predicted.

SimilarWeb found that hotels and vacation rental sites took share from online travel agencies like Booking.com and Expedia.com in the first half of 2022.

Short-term rental property manager WanderJaunt ceased operations.

An announcement on a Wanderjaunt customer service phone line said that “due to the current economic situation” Wanderjaunt is permanently closing on Thursday, June 30, and ceased operations Tuesday.

Guests with bookings that had checkouts by Thursday could complete their stays, the announcement said, and those with stays running after that should vacate the properties by June 30.

The company said it would process refund requests but customers should contact their credit card companies with any difficulties.

Guests who booked Wanderjaunt properties on Airbnb should contact Airbnb, the announcement said.

Co-founded by Michael Chen, Barrett Glasauer and Andres Green, the property manager, launched in 2016 in the San Francisco Bay Area, had raised $37 million from investors including Global Founders Capital, Founders Fund, Khosla Ventures and Bossanova Investmentos.

WanderJaunt entered into long-term leases with developers, and distributed its rentals on Airbnb and other third-party websites. It was trying to build a brand.

Skift is reaching out to the company for comment.

Citing a substantial increase in Airbnb listings, UK government agencies Wednesday issued an “open call for evidence” about the impact of short-term rentals, and floated remedies such as physical inspections of properties and a registration requirement.

The UK Department for Digital, Culture, Media & Sport, the Department for Levelling Up, Housing & Communities, as well as two MPs stated that the call for evidence would last 12 weeks. The announcement cited a 33 percent increase in Airbnb’s UK listings in the 2017-2018 period.

The aim is to improve the lives of people living in tourism destinations, and to understand the impact on housing, among other goals. the announcement said.

The announcement stated:

“The scheme, proposed in a new government review looking at the impact of increases in short-term and holiday lets in England, could involve physical checks of premises to ensure regulations in areas including health and safety, noise and anti-social behaviour are obeyed.

“Further measures the Government is considering include a registration ‘kitemark’ scheme with spot checks for compliance with rules on issues such as gas safety, a self-certification scheme for hosts to register with before they can operate, and better information or a single source of guidance setting out the legal requirements for providers.”

Reacting to the announcement, Merilee Karr, chair of the UK Short Term Accommodation Association and CEO of UnderTheDoormat, urged the government to distinguish between short-term rentals that hosts live in and those that are investment properties.

Karr said her association has previously called for a national registration plan as a precursor to collecting data and to develop any policies. She said short-term rentals “play a vital role in the English tourism economy, contributing to local jobs and businesses, providing a vital income stream for many individuals and families at this time of rising cost of living.”

Airbnb announced today that it is introducing an in-app safety feature for solo guests staying in private rentals and shared rooms.

Once the solo traveler books a stay in these accommodation types, Airbnb will begin offering expert tips in the app.

“The key component of this new feature is the ability for the solo traveler to easily share, with one-touch, their reservation itinerary with the important and trusted people in their lives for added peace of mind and in the rare event of an emergency during a stay,” Airbnb stated. “The itinerary includes: listing address, reservation code, and check in and out dates.”

It appears as though Airbnb began development of the feature with solo women travelers around, but broadened it to include all solo travelers. Tour operators and many companies have place new emphasis in the past few years on trying to ensure the safety of solo travelers.

English speakers will be the first to get access to the feature, Airbnb stated, but the company intends to introduce the product in other languages and in additional countries.

Just look at their market caps — Booking Holdings $92.05 billion and Airbnb a humbling $77.8 billion.

The Wall Street Journal reported Sunday that Booking’s share price has notched “single-digit gains” over the last six months, while “Airbnb’s shares have lost nearly a third of their value.”

Reporter Laura Forman attributes some of the discrepancy to the comeback and relative affordability of urban hotels versus soaring rates for short-term rentals.

Not to mention, we’d point out, seeming out-of-control cleaning fees with little rationale for the heft of the cost.

Airbnb’s average daily rates climbed 37 percent in the first quarter when measured against the first quarter of pre-pandemic 2019, according to the Wall Street Journal. Citing STR data, the story said average rates for urban hotels around the world in April haven’t yet inched back to pre-Covid levels, while the average price of a room night for hotels as a whole has risen less than 15 percent in April compared to the same period three years ago.

Of course, as the story notes, Airbnb has the brand advantage over Booking.com as Airbnb spent less than a quarter of its revenue on sales and marketing in the first quarter of 2022 while Booking shelled out more than half its revenue on sales, marketing and related expenses.

Still, there’s a reason that Booking.com spends so much on performance marketing on Google even as Airbnb has reduced the percentage of revenue it spends on marketing on Google and elsewhere since 2020. The reason Booking.com spends so much? It seemingly is working.

The Wall Street Journal cited Sensor Tower data tallying Booking.com’s app installs in April as being 13 percent higher than in January 2020 while Airbnb’s app downloads fell 12 percent in the same timeframe.

“Ironically, Booking has managed to reinvigorate interest in its namesake brand this year by promoting its tired image,” the Wall Street Journal said. “A Super Bowl commercial for Booking.com featured The Wire star Idris Elba mocking the brand as having ‘never been accused of being sexy, flash or lit,’ unless, he adds, ‘we’re talking literal.'”

We’re unsure how much weight to give to Booking’s Super Bowl ad — which seemed to underwhelm — in its app download number uplift.

The signs of life in Booking’s stock price compared with six months ago has a lot to do with the comeback of cities, the reopening of Europe, where Amsterdam-based Booking.com has most of its strength, and the relative affordability of hotels.

After all, while some people wrote off cities during the pandemic as being permanently scarred, Booking’s Glenn Fogel argued — as did Peter Kern of Expedia Group and Steve Kaufer of Tripadvisor — that urban hotels and cities would be back. It appears as though that’s starting to take shape.