Bloomberg Línea — San Francisco-based home-sharing platform Airbnb (ABNB) has announced new guest verification features and support for hosts to onboard more people to list their properties on the platform, an announcement that comes less than a week after three US citizens perished inside their rented Airbnb apartment from carbon monoxide poisoning.
In an interview with Bloomberg Línea, Airbnb’s co-founder Nathan Blecharczyk said the new features for transparency and helping hosts are unrelated to the Mexico City tragedy, as the tools have been under development during the past six months, but assured that the company is aware of the issue of lack of safety equipment for hosts in Latin America, and is working to educate people about the need for such tools such as carbon monoxide detectors.
Latin America is a big deal for Airbnb, especially Brazil, Blecharczyk told Bloomberg Línea, with the company having reported 33% growth in bookings of its “nights and experiences” in Latin America in third quarter, compared to the same period last year, growing faster than the global business itself.
The company said in its quarterly results report that it saw “continued resilience in certain countries, such as Mexico and Brazil, where both domestic and inbound cross-border travel remain strong.”
“Brazil in particular is a popular destination. One way to qualify that is the amount of spending travelers do when they travel to an Airbnb in Brazil. Excluding what they spend on combinations, travelers to Airbnb are spending $4 billion on restaurants and shopping. That is why we are so excited by the market and why we are so focused on investing in partnership with the government, with cities, and we work with different authorities in tourism promotion,” Blecharczyk said.
The following interview has been edited for length and clarity:
Bloomberg Línea: Why are you announcing these new tools and what do they entail?
Nathan Blecharczyk: This is really in response to the economic uncertainty that so many people are experiencing right now, with inflation and a possible recession. It reminds me a lot of the context in which Airbnb was founded, the whole idea originated when Joe (Gebbia) Brian (Chesky) and myself were trying to pay for our apartment. Many of the early hosts in 2009 were during the great recession, and they were folks that lost their jobs and needed to pay a mortgage or pay the rent and they turned to Airbnb for that. So we think because of the economic uncertainty there are going to be a lot more people interested in hosting.
And we already saw that in the course of the pandemic. Sixteen million visitors have come to our hosting page to learn about hosting, which I think is really eye-opening because we only have four million hosts on Airbnb today.
So we have a big business today, with four million hosts, but there are a lot more out there that could be part of the community. We know that hosts require a great deal of trust. People ask the question, ‘how can I trust a stranger in my home’?, and so this release really tries to address some of those hesitations for those 16 million out there who are still thinking about it.
We overhaul our processes, listing our spaces, super easy, but when you go through it on your app the first thing you are going to notice is that we immediately match you to a super host. A super host is one of our top hosts, that host frequently and get top reviews.
When we match you, you can have a voice conversation or a video conversation with that person in the app on your phone as you are going through the process. As you are listing your space, you can ask this person questions like what is your recommendation for ‘how I set my price?’ Or you might ask general questions like ‘what is it like to receive your first guests, how is that experience for you?’
We think being able to talk to a peer will give people some reassurance. The second thing is, as you are listing, you are probably thinking about who my first guess is going to be, and you might be apprehensive about that. And now you have the option for your first three guests to build what we call ‘experience guests’, these are guests who have used Airbnb multiple times before and have gotten great reviews. You can be assured that this is going to be someone familiar with Airbnb, and it’s going to be a good experience.
In this program, we have Aircover for hosts. This is a property and liability protection so every host gets this. But as part of this rollout we are increasing the property damage coverage from $1 million to $3 million and it now applies not only to your home but your car or boat if you have those things on your property, and it also covers your artwork and other valuables. Three major improvements that we think will bring this next wave of hosts. Of those who become hosts and receive bookings, half of them are getting their first booking in just three days.
Does this announcement relate to the tragic situation in Mexico, where three US citizens were found dead in an Airbnb, or was it planned before that?
This rollout has been in development for six months. But in relation to the carbon monoxide-related deaths in Mexico, first of all that is a tragedy, our hearts and thoughts are with the families and loved ones of those who passed away, but on this issue specifically, we have worked over the years, to get free carbon monoxide detectors so we have done a lot to build the application around carbon monoxide safety and make sure that hosts are equipped with the tools to prevent tragedies.
In different parts of the world, there are very different levels of awareness around carbon monoxide. So places like Mexico, and in Central America, there is a lot more work to be done. There is a lack of awareness. But we have specific initiatives trying to explain to hosts why this is important. And we are also very transparent with guests when they are booking about whether the apartments are equipped with detectors or not.
Given this specific situation, will Airbnb be pushing for more safety in Latin America?
We are always looking to do more and trying to learn everything we can about this specific incident and to learn and figure out how we prevent these things from happening. It’s a very challenging topic. We have people in place looking at these things. But we will continue our efforts, because this is a critical topic.
People are always demanding more transparency on the app, transparency regarding fees, how much of the fee is applied to cleaning, for instance. Are you working on that?
We announced some of the changes that we will make to make the pricing more transparent. In general, we think transparency is important, so we are going to be adding tools on the search page as of December so that a guest can choose how they want the price to be displayed, if you want the current approach, which excludes the cleaning fee, or if would you like the cleaning fee to be included in the search results.
We are also going to work with hosts to make sure that they understand more clearly what the full price is so that they can understand when they set their price and what the cost to the consumer is going to be, to make sure the price components are rationalized.
Venture capital closed its doors to Airbnb during a crisis period. How would you advise entrepreneurs that are going through this situation right now?
I think for the young entrepreneurs that are just starting companies, although it is a challenging environment to raise money, I also think that this is a period where conditions and constraints could create productivity. What we found in the early days is that we had very little access to capital, and nobody believed in us at that time, very few people, and investors were not willing to give us money in 2008.
But even when 2009 came and we raised the money, it was a modest amount of money. It forced us to do what our value proposition was: stay really focused. In a way, I think when you have access to a lot of money you can avoid some of those tough trade-off questions. But those are always sustainable strategies.
And I think that is the adjustment that a lot of companies are going through right now. We have had a decade of good times, and that resulted in a lot of hiring, but those aren’t sustainable strategies.
We went through that adjustment at the start of the pandemic, when our revenue dropped 80% in a few weeks. We were confronted with a huge challenge, and we had to make layoffs as well, and it was very painful. But we also saw that with fewer employees we had to be more focused, and when I say focus we decided that there is a lot of opportunity in our core business.
And so we were making sure that our team and our best people are working in our core business, and which has so much potential, and we are going to stop doing some of the things that were fine ideas but frankly they weren’t things that we were very competitive at.
With this new focus and new discipline we have now enjoyed two and a half years of success, and quarters that have been record-breaking. And I attribute it to being very disciplined. Nobody wants to make layoffs, and it’s very difficult for people. I think one of the lessons that we learned as a company is that you can ease that transition and help people find the next chapter.
For example, we put together a directory for everyone that is leaving the company. If they gave us permission, we put them in this directory, and we make it available for other companies to hire them, because we have great talent, so there is a lot of interest, and we make it easy for employers to hire our people. We had our internal recruiters helping our folks find new jobs, and we gave all employees laptops, so this is something that we did to help our employees transition.
So can we expect any layoffs by Airbnb during this period of downturn?
No, we already went through that at the start of the pandemic. We saw record Q3 results, we are in a very strong position, and we are staying disciplined right now, with a modest and steady growth of headcount.