What’s new in Airbnb’s App & business model Q3’23
In this series we’re looking at anything new in the Apps & Business Models of the best Digital Technology Companies.
Since Apps are really the frontend to a business model, we always have to look at both: the frontend (the App) and the backend (the business model & why certain App updates have actually occurred).
Here’s what happened lately at Airbnb.
1. Pricing Tool
The Pricing tool is not new as such but it has been redesigned a lot.
Hosts can now apply discounts & promotions easier. This is based on a travel-economic trend that Airbnb has observed since the pandemic restrictions have been eased across the globe. The trend is for longer stays related to working from anywhere.
More guests are booking longer stays and Airbnb hosts can now offer discounts more easily on stays above 1 week, 1 month and 3 months. Airbnb reduces their take rate beyond 3 months considerably.
There’s also a Similar listings tool that displays pricing of — who could have guessed it -: similar places in the same region. This can help hosts to adjust pricing for seasonality (and help reduce pricing through competitive forces)
These updates are not the same as the complex revenue management systems that are known from the hotel (and airline) industry. But the Airbnb App also has a feature called “smart pricing” which lets the AI in the backend do the pricing adjustments. This tool has been around for a little while and we assume it is getting smarter by the day…
In addition, the App now shows to guests more transparently the total pricing and breakdown of components.
2. Airbnb Rooms
Some of the pricing tools were based on “criticism” that prices on Airbnb have gone up “a lot”. Well, ADRs (Average Daily Rates — a travel industry metric that measures such trends) has been up across all types of lodging.
Updates to Airbnb Rooms are also based on their attempts to increase the utility (ie Value Proposition) of booking individual rooms as to reduce the aggregate ADR across Airbnb bookings.
The App has added a lot of cool features such as Airbnb Passport (this came last year from memory but plays in with Rooms). Here people can learn more about their hosts/guest which may reduce concerns of booking a room in someone’s home. It also has more details on the stay including 3D models, etc.
These are pretty cool features that can stimulate demand.
Here’s also Brian Chesky’s Room & Passport. He has been hosting guests for a long time (if you’re lucky you may get in — but it’s basically always booked out for a 2-year forward window but definitely good luck from my side, you may be the lucky one who gets the next spot).
3. App updates based on user feedback
Recent updates in the Winter 23 Release have been mostly based on user feedback. I wouldn’t say there are any major features as the ones above which were earlier in 2023. But this a whole range of updates
- Specific filters such as the most requested one for pet friendly listings &, king beds
- Search improvements: “search similar dates”
- Guest favourites badges (rated above 4.9 stars on average)
- A redesigned ratings page with new features to help guests understand the quality of every home
- Listings tab for hosts: A set of new tools for Hosts to manage their listing and showcase the details guests care about most
Learn more
As always, there is more to it than the eye can see. You can check out our videos on What’s new in Airbnb’s Business Model …
Learn more about the whole biz model (including finance & economics) watching the entire video or jump to the App & business model update sections (here) if you are more interested in the App updates and what’s behind it.
Learn more about all aspects of Airbnb’s biz model here.
This is pretty cool stuff, ey?
