Airbnb and the travel revolution

Playing the long-term game?

There is perhaps no technology company that was impacted more by the pandemic than Airbnb.

In the weeks and months following March 2020, cancellations for existing bookings on Airbnb reached nearly 100%, and new booking volume dropped by 80%. The company laid off 25% of its staff, saw its valuation cut in half, and had to delay its IPO.

Fast forward to 2021, though, and Airbnb is thriving. What changed? Well, as CEO Brian Chesky put it in a recent tweetstorm, there has been a revolution in travel.

Knowledge workers are no longer tethered to the places where their offices are, because work now takes place on Zoom and Slack, not in a physical office.

That means people can now travel anytime, anywhere, for any length of time. Some may even choose to live anywhere, by relocating temporarily or permanently.

And so people are no longer just travelling on Airbnb; they’re living on Airbnb.

This is a golden moment for Airbnb, whose mission is to “create a world where anyone can belong anywhere.”

But one thing is clear: long-term stays are a very different use case than short-term vacations. They present a unique set of needs and constraints.

And it’s time for Airbnb to shape its product around this.

So, how can Airbnb best capitalize on this opportunity?

Here’s what I would do: ??

• Solve the challenges of long-term stays
• Enrich listings with the work-from-home setup
• Expand into co-working spaces
• Convert long-term guests into hosts

The challenges of long-term stays

Going to live somewhere else for a “long-term” stay (which Airbnb defines as 28+ days) means a whole new set of needs than short-term vacations. You’re living (and working!) somewhere, rather than vacationing.

What are these needs? Well, a helpful way to brainstorm them is to think about the last time you went on a long-term stay. What were some of the pain points of being away for such a long time? Here’s a few I can think of:

• Fitness: being away from your gym / workout regimen for so long?
• Food: not wanting to eat out at restaurants all the time
• Laundry: always needing fresh sets of clothes

A helpful way to reframe these needs is that they’re barriers (whether perceived or actual) for people to commit to long-term travelling. You know how people talk about “the comforts of home?” That’s these.

So, naturally, Airbnb should help solve these needs, to unblock the constraints folks have for long-term stays.

Fitness

Most people have some sort of regular fitness regimen when living at home; whether it’s home workouts, going to the gym, or going for runs. Being away from that for an extended period of time can be challenging, and even take a toll on your physical and/or mental health.

And while it’s easy to suggest things like “Airbnb should give every host a Peloton!” or “they should give guests gym passes!”, we have to come back to Airbnb’s mission; “to create a world where anyone can belong anywhere.”

Airbnb prides itself off on its travellers living like locals, not just doing touristy stuff. So to suggest something ‘mainstream’ may not align with their values.

Instead, I think Airbnb would love to see guests experience the local fitness scene, and contribute to the economy in the process.?

For example, Airbnb could partner with ClassPass to offer guests a certain amount of credits (based on the length of their stay), to use for classes at fitness studios around the city.?

This way, guests get to live like a local, while still giving back to the communities and supporting local entrepreneurs.

Another way Airbnb could solve this is to expand their Experiences offerings into fitness.

Guests could book fun outdoor workout classes, or sign up for local experiences like hikes or mountain biking.

Airbnb could take things a step further and build an ‘itinerary’ for you based on when you like to workout, e.g. offering a morning sunrise hike or a pre-dinner HIIT class, based on your preferences.

Food

Everyone’s favourite part of travelling — food! To date, Airbnb has offered some Experiences with a dining component, such as cooking classes.

But otherwise, if you don’t book an Experience, you’re on your own when it comes to food.

And while on a short vacation, it’s easy to just go out to restaurants, you may not want to do that every day if you’re staying somewhere long-term. This could be for nutritional reasons, financial constraints, or both.

Here are some ways Airbnb could solve this:

1. Providing recipes for you to make local favourites
2. Partnering with Instacart to offer grocery delivery to your home
3. Extending their Experiences offerings to include in-house culinary experiences

Of these, I think the Instacart partnership is the most compelling, as it allows guests to support the local economy. And they could even combine it with #1; offering you recipe ideas, and then adding the ingredients to your Instacart order.

In my view, the Experiences offerings should be reserved for ‘unique’ dining experiences, not everyday eating.

Laundry

The easy way to solve this problem is to say Airbnb should require hosts offering long-term rentals to have in-house laundry machines. And perhaps hosts ensure a pack of Tide Pods is ready for you upon arrival. Easy!

But… if you’re travelling, you probably want to be spending time outside and exploring the city. And laundry takes time! You have to be home, remember to take your clothes out of the washer, wait for your clothes to dry, etc. So… what if Airbnb did your laundry for you? (It sounds crazy at first, I know.)

They could offer an in-house service where drivers come and pick up + drop off your laundered clothes, or partner with a company like Rinse.

Of course, this comes with costs (and logistics challenges) that Airbnb would have to incur, but it’d be a cool experiment to run.

Enrich listings with the work-from-home setup

Knowledge workers who can work from anywhere, or ‘live on Airbnb’ as Chesky put it, really just need a laptop in order to work.

But when someone is booking a long-term stay on Airbnb, they’re likely going to be working. Airbnb’s listings, though, don’t do a great job of highlighting the WFH benefits a listing offers, nor do their listings look any different when you’re looking for a long-term stay.

Here are some things I’d love to see added to listings:

1. WFH setup: is there a desk or workstation available? With a comfortable chair? Is there a monitor you can use?
2. Privacy: will you be sharing the working space with others, or is it a private area? This is a huge factor for those who have to jump on Zoom calls throughout the day.
3. Internet speed: Airbnb now lets hosts measure their WiFi speed, and I’d love to see this added as a filter on search results, as well as mentioned on listings.

Going even further, you could imagine Airbnb suggesting good routes to take a mid-day walk, nearby cafes to grab lunch, or a score on how good the lighting is in the working space. But it’s a start!

Some success metrics I’d use here are:

• Conversion rate from viewing a long-term listing → booking it
• Retention / return rate for users booking long-term rentals
• Increase in avg. # of bookings + avg. revenue per host annually?
• Decrease in cancellation rates for long-term bookings

Expand into co-working spaces

Most people have been working from home for over a year and a half now, and let’s face it, a change of scenery would be welcome. For those living at home, that may mean going into their physical offices once in a while. But if you’re living in another city, there’s no office to go into!

What I’d love to see Airbnb do is offer its long-term guests the option to work out of co-working spaces that they either recommend, source, or build themselves.

This would help guests who are staying in homes that don’t have good WFH setups, as well as those looking to change up their working environment.

Not only would this give long-term guests a ‘permanent’ place to work from, it would also create a community, which ties nicely to Airbnb’s mission. Imagine a dedicated Airbnb co-working space where you could quietly get your work done, but also meet fellow travellers to have coffee or network with.

Airbnb could start by sourcing recommended co-working spaces in the city that they curate, and then surfacing these during the booking process (and in their post-booking drip campaigns), to entice folks to book long-term stays.

If there’s enough traction, they could look to partner with a company like WeWork or Breather to offer a formal ‘membership’ to high-quality working spaces.?

And finally, if they really want to go deep here, Airbnb could build its own co-working spaces in certain markets, so they can control the environment. This is a strategy taken by companies like Bumble, who opened ‘Bumble Brew’, a cafe in NYC designed for its users to safely meet up for dates with their matches.

Convert long-term guests into?hosts

This is the real kicker for Airbnb. Brian Chesky is on record as saying that Airbnb needs millions of more hosts in order to meet the demand of ‘the great travel rebound’ that 2021 brought.?

So, how can Airbnb grow its supply in an organic way? Hmm… how about targeting people who’re going to be relocating elsewhere??

Think about it. If you’re going to stay somewhere else for at least a month, that likely means you have an empty nest sitting at home — not to mention with a mortgage or rent to pay off.

When you book a long-term stay, Airbnb could suggest you also sign up as a host, to rent out your home while you’re away. Heck, it could even pay for your trip!

And they could entice you with a signup bonus, e.g. they used to give first-time hosts in certain markets $250 in cash when they completed their first hosting experience.?

Not only would this grow supply in a scalable way, it’d also increase Airbnb’s CAC:LTV ratio (or payback period), as it’s an organic way of acquiring new hosts without paying for advertising. It’d also boost average revenue per user (ARPA), as revenue could now come from users being a guest or a host.?

Some success metrics I’d use here are:

• % of guests that complete a first-time hosting experience
• 90-day retention for all users
• Increase in average revenue per user (ARPA)

In closing, here’s how I think Airbnb should capitalize on the trend of long-term stays:

• Offer solutions addressing the lifestyle challenges of long-term stays
• Highlight the benefits of the work-from-home setup on listings
• Providing co-working spaces for long-term guests
• Organically convert guests into hosts by getting them to rent out their homes when booking a long-term stay

This is a series of blog posts on my observations from the tech industry and product management. I’m on Twitter at @samir_javer! ??