Airbnb had a problem. Last year, 330 million people visited the home-sharing website and searched with their travel dates, said Airbnb CEO and cofounder Brian Chesky.
The vast majority never booked.
“The number one reason people who came to Airbnb did not book was because they did not see the right thing for them,” Chesky toldForbes.
It’s a challenge the company has faced in the 10 years since it launched with an air mattress on an apartment floor. While the company has moved beyond the early days of air beds and now counts more than 43 million properties worldwide, including even some boutique hotels, it has yet to shake the idea that it’s an alternative way of travel.
“I like to joke that we’re one of the biggest alternatives in the world,” Chesky said. “Very rarely do 300 million people use something, and people say it’s an alternative. But it’s also rare for 300 million people to use it and to have so many people say it’s not for me or it is an alternative.”
The problem was actually two-fold. There was a perception problem that Airbnb just didn’t have the right accommodations for a lot of the travelers looking for a place to stay. Then there was the discovery problem where Airbnb might’ve had the perfect place, but it was too hard to find.
Getting those 333 million people to book with Airbnb rather than flee the website became a core motivator for a series of changes that the company made on Thursday.
To start, the company is making it easier to find properties that are a fit by adding new categories, including vacation homes, unique properties like tree houses, bed-and-breakfasts and boutique hotels.
While hotels have long been a sworn enemy of Airbnb, the boutique hotel market has been quietly growing on Airbnb. The company saw a 520% increase in the last year in boutique hotel listings alone, said Airbnb’s COO Belinda Johnson. There are now over 24,000 boutique hotel rooms and over 180,000 B&Bs. To keep the site from being overrun by the chain hotels, there’s an extensive checklist of criteria that the hotels must meet before being accepted to Airbnb, including having rooms that match the local decor and open areas where guests can meet each other.
“It’s bringing what was unique to Airbnb, the local, authentic experience, to a broader group of travelers. And that’s why we’re so excited. It’s taking that Airbnb way of traveling and offering it for any type of traveler,” Johnson told Forbes.
The company is also breaking out its millions of properties into certain collections. Airbnb is starting with properties designed for work and families, but it will be soon adding more categories like ideal places for weddings, honeymoons and even accessible travel for guests with disabilities.
While many view Airbnb as renting a private room or sharing a house with a chatty host, the company is splitting the friendly local accommodations into its own area called “social stays”. One day, Chesky sees it becoming more developed so you could even search to stay with a yogi or a musician.
Making listings easier to find both quickly and better-matched to guests will fix the discovery problem, but not the perception of quality. Compared to a hotel chain where many people can expect a standard experience, Airbnb has been plagued with quality issues. Even certain safety basics, like smoke alarms, are recommended, but not required.
Rather than setting a bar for all properties to meet, Airbnb is taking a different path with a program called Airbnb Plus. Hosts can apply to have their homes verified by an inspector who will check everything from the towels in the bathroom to the speed of the internet. Smoke alarms and carbon-monoxide alarms are also part of the 100-item list.
“The studies have shown that that draws 5x more interest in bookings and that guests are willing to pay more for that,” Johnson said.
So far, Airbnb Plus homes average $250 a night, far from the budget travel roots of the company. The challenge ahead will be to figure out how to keep to Airbnb’s mission of “belonging” while also trying to reach the ambitious goals set by its CEO.
In 10 years, Chesky says he wants one billion guests to be using Airbnb a year, a number he admits is a little bit more art than science.
“Many of the things we said today are planting the seeds for that, at least for accommodations,” Chesky said. “To get to a billion, you basically have to cover all travel use cases.”
The trick will be balancing how to grow and expand into other travel experiences, like flights, while still maintaining the feel of Airbnb. Tacking on things like rental cars or tours at the end of a checkout feels like an up-sell on a lot of travel websites, Chesky said. To grow, he’s taking his inspiration from a company that upended an entire industry.
“A company that succeeded in this world was Amazon — not in travel, but retail — where people willingly go to Amazon to buy almost everything,” Chesky said. “There’s a lesson there. I think the travel companies have not been quite as successful with selling or offering almost every part of the trip without the customer feeling kinda sold to.”
While Amazon may have started out as the alternative to book stores, it eventually overtook a lot of the industry and expanded from there. Airbnb has admittedly been slower to shed the alternative label, but the company wants to become the future homepage for all travel on the internet.
Adding boutique hotels and verified listings will hopefully open the door for more people to try the company as a new way to travel and not just search on the website before deciding it’s not for them.
“It might take the next 10 years. And that’s OK. We have to have a really long horizon,” Chesky said. “We just have to convince the next person who was right on the tipping point.”