As has been his habit about product changes, Airbnb CEO Brian Chesky tweeted about updates the company is making to this year’s summer release announced in May.
17.11.2023 - 19:09 / skift.com / Brian Chesky / Dennis Schaal
Is Airbnb leaving money on the table, and could it generate more revenue by hiking host fees and introducing sponsored listings?
A BTIG research report published earlier this week runs through these Airbnb “bull” scenarios.
“A key plank to an ABNB bull case is the potential for take-rate to move higher and one way to do that would be to step-up host fees,” says the report, which was written by Jake Fuller and Kevin Dolan.
The report notes that Airbnb collects around 13% in fees on average, with around 3% from hosts and 10% from guests. The bulls, according to the report, argue that Airbnb could raise those host fees from approximately $4 per night to $6.50 per night – around 4.8% of the booking.
That would produce an additional $1.3 billion in annual revenue, BTIG said.
One major problem, though, is that such a fee hike would create an uproar among hosts, and competitors could benefit if they kept their own fees low. In addition, hosts might then increase the nightly rates they charge guests.
Higher fees would come as big online travel agencies, such as Expedia and Booking.com, have been busy trying to lure customers via discounts.
“Take-rate has only gone in one direction in travel and it has not been up,” the BTIG report said. “We’ve watched take-rate come down over time in air and hotel. We aren’t sure why short-term rentals should be different.”
Airbnb watchers have been intrigued by the prospect of Airbnb introducing sponsored listings ever since CEO Brian Chesky floated the idea in March. At the time, Skift Research estimated that Airbnb could generate an additional $1.2 billion in annual revenue from sponsored listings by 2026 if it debuted them in 2024.
The BTIG report pegged that number at about $550 million to $1.1 billion annually in the next five years, noting that Expedia generated around $400 million in ad revenue in 2022, and Uber’s relatively new sponsored listings operate at a $650 million annual run rate.
“While an interesting opportunity, ABNB has spoken cautiously about implementing sponsored listings as it could potentially disadvantage individual hosts in favor of professional managers,” BTIG stated. “Individual hosts are a critical element to the ABNB model.”
The thinking is that large property managers are best positioned to afford sponsored listings, and that would give them an additional edge over individual hosts. That has been a very sensitive issue among smaller hosts, who sometimes argue that corporate managers already get more than their fair share of bookings.
Sponsored listings don’t seem imminent, however.
When asked about sponsored listings during Airbnb’s third-quarter earnings call on November 1, Chesky said: “With regards to future services to sellers, we don’t
As has been his habit about product changes, Airbnb CEO Brian Chesky tweeted about updates the company is making to this year’s summer release announced in May.
Good morning from Skift. It’s Wednesday, December 6. Here’s what you need to know about the business of travel today.
Airbnb recently reminded hosts that it plans to shutter its email alias feature September 30. The feature enables hosts and guests to email and share documents, such as PDFs of property guides, passports and other IDs from their regular emails accounts without having to log into Airbnb.
Airbnb co-founder Joe Gebbia, who left his full-time role at the company a year ago, has sold more than $1.37 billion worth of his Class A shares since that time, including more than $1 billion so far in 2023, according to regulatory filings, Bloomberg reported. Gebbia still chairs the non-profit Airbnb.org, but more importantly, he retains the bulk — but not all — of his Class B shares, which now give him 19.8% of Airbnb’s voting power. Together with his two other co-founders, CEO Brian Chesky (30.6%) and Chief Strategy Officer Nathan Blecharczyk (26.9%), they control 77.3% of Airbnb’s voting power.
Happy Tuesday, folks! We’re back after last week’s 10th annual Skift Global Forum in New York City. It was quite the event: Notable speakers for me were Airbnb CEO Brian Chesky, Salamander Hotels CEO Sheila Johnson, and Uber CEO Dara Khosrowshahi.
Good morning, readers. I hope you’re having an easy Thursday so far. I don’t know about you, but I am loving the new look of this newsletter, so much so that I sent myself multiple test emails this morning.
Good morning, readers! I hope you’re have your reading glasses on, this is a long one.
With critics questioning Airbnb’s growth momentum, Airbnb announced Tuesday that Chief Financial Officer Dave Stephenson will become chief business officer, a newly created position, and VP of Finance Ellie Mertz will become CFO March 1.
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Airbnb has a fake listings and verification problem — and the company knows it.
Among big-name travel and transportation brands, Expedia Group, Airbnb, Uber and Disney have pulled their advertising off X, formerly known as Twitter.