Katie Perry (00:4): And I'm Katie Perry. We've got a great show coming up for you today. We have the Chief Business Officer for Airbnb, Dave Stevenson joining us on the show, and I think it's going to be a great conversation. What are you most interested in hearing about?
I feel as though all summer along and now early fall, I've been seeing pictures of these crazy properties like a Polly Pocket house or an up house, and I'm just curious, is that sort of a one-time set of marketing events? Are we going to see them all collected somewhere like an alternative Disney resort? I don't know. So we'll have to figure out some, get a little bit more intel onto what icons is all about.
I would definitely go to that resort. I'm really curious to hear about their differentiation strategy, especially on the host side. You have a lot of people renting out, managing second homes, properties, people trying to make extra income. They have more choices than ever about which platform to go with. So curious how much they're investing in that specific side of the marketplace in addition to the guest experience.
Yeah, there's a lot going on over Airbnb I feel, and that's just here, right? And I've got travel top of mind at the moment. I'm back. Poor Casey, you're having to deal with my jet lag. It's between just back from Europe heading to the Middle East. What is international growth plan? Feels like there's some opportunity there. I guess
We're about to find out. And with that, let's get into it.
Wow.
Dave Stevenson, welcome so much to after earning. It's great to have you here today.
Thanks for having me. Excited to be here.
We have a lot to cover. We want to jump right in. Starting with Airbnb and how you guys view differentiation. There's other platforms out there that facilitate home rentals, both from a host side and from a guest side. Could you walk us through what you think the top three ways you differentiate are as a business?
Sure. I mean, I think differentiation is an incredibly important part of what Airbnb provides. We have over 8 million listings all around the world. We have over 4 million hosts. The vast majority of those hosts, 90% of them are individual hosts hosting their own home, and the majority of those are individuals that are sharing only on Airbnb. And so what we end up having is a majority of our homes that are actually uniquely available here with us on Airbnb. And one of the ways that we even highlight some of those unique listings that we have are through some of the iconic events and people like staying at the Polly Pocket or staying at the M or say, those are kind of these iconic events that show the pinnacle of truly unique things, but we have millions of listings all around the world that you just can't get anywhere else.
So Dave, you've pointed to three things there. You've pointed to scale, you've pointed to exclusivity, and then you've also pointed to the quality of the hosting. Talk to us a little bit about the winter release you at Airbnb. You've got sort of a two points in the year cycle of new features being dropped. Tell us where you are on that right now.
Yeah, I think compliments a lot of what we just talked about. The unique stays we have all around the world are enabled by having amazing hosts to host their properties, but there are so many hosts that have a hard time maybe having the time and energy to be hosts. So we are launching this co-host marketplace where we have 10,000 of our best hosts around the world that can help other hosts host their homes. And so we able to pair people up across 10 countries around the world and bring on some of our best hosts. So that enables us to get more of these unique homes. Then the other is that we're launching 50 new upgrades to our service. Those 50 new upgrades continue to perfect the core service that we provide and do things like highlight how to actually use Airbnb for many new users, highlight specific amenities in a listing that appeal to specific people. So if you're traveling as a family, it'll highlight those features that are great for you as a family member. And then we're doing things like just simple things like bringing really local payment methods to countries around the world to make it easier for very specific guests in specific countries to interact with Airbnb. So across the platform, we just continue to improve our quality.
Let's talk a little bit about the co-host upgrades that you just mentioned there, Dave. One of the things that's been so fascinating is one, Airbnb created an industry, but sub industries have been created as a result of that and one that has been professional property managers working to support Airbnb listings. Some people are making real money off that. Is Airbnb going to get any revenue from these new co-host upgrades, which is helping property owners to find folks manage their listing for them?
Yeah, there's no incremental fee that we're charging for the co-host marketplace. All we're doing is facilitating that matching and we think it benefits both parties to your exact point. We have people that are professional co-hosts that can help other existing hosts and they'll make money by helping get more listings, get more nights on those homes, and then the homeowners will actually get the benefit of the hosting from the co-host to help them out. So it's kind of a two-way street. We'll get more listings, they'll get more earnings. We don't have additional take rate on that, but we'll have more vibrant and better overall experience as a result.
It is great to hear about investment across both sides of the marketplace, especially on the hosting side. I'd never thought of this before as a user of Airbnb as a guest, but for hosts, it's kind of similar to the situation with Uber and Lyft now where the drivers might be able to work with a bunch of different platforms. And so is this investment in hosts part of a longer term strategy to really continue building that community and maintain the core group of hosts that you guys have on the platform?
Yeah. Again, I think it actually maintains this core community on Airbnb. It makes it easier to host specifically with us. It continues to bring guests directly to Airbnb because we have these unique listings, 90% of our traffic remains direct or kind of unpaid people coming directly to us because of the unique stays. These co-hosts are some of our best hosts. Their ratings are like 4.86, so some of their best rated hosts for these co-hosts. So it just kind of keeps the flywheel going, bring on more great supply, very high quality supply. You can only uniquely get it here at Airbnb and keeps flywheel going.
Dave, let's talk about some of these unique listings. I feel as though all summer I just thought my Instagram, which is filled with whether it's Polly Pocket images now Poltergeist, certainly the Paris Olympics talked to us about some of these really unique offerings that Airbnb has been focusing on.
Yeah, I mean some of these unique offerings, they've started really small. We had the Mushroom Dome in California. It was like this original iconic stay. But now what we've done is to highlight through these iconic events, things like the house we just recently announced, the Polly Pocket here over the Halloween, we're going to have the original Poltergeist house available on Airbnb. I think it just highlights what is kind of truly unique and special, and it just kind of taps into the zeitgeist of the current time and it's just an exciting way to kind of highlight our unique offerings.
Dave, I feel as though that we can push you a little bit more than we might otherwise on some of the financials around this because you have been the CFO, but before moving into the growth focused role, when it comes to things like the Icons program, that initiative, is that marketing spend for you or is this a really new niche revenue stream that you guys are considering scaling over time?
No, it's primarily a marketing investment. I think we can scale some of these things over time, but we want to be able to expose them to more and more people. Some of the iconic events, you might only have a dozen people that might actually be able to share and experience it, but tens of millions can share through social media or some of the videos and interact with it. So it really resonates with tens of millions of people around the world, but actually only a few select people are actually able to visit there would love to be able to see more ways we can expose it to more people. Things like our X-Men house, we actually were able to have thousands of people to visit. So over time, it would be great to be able to have more people visit the iconic events, but the moment is largely just inspiring creativity and uniqueness of the Airbnb platform.
From a brand point of view, if your goal is one of the goals is to showcase the differentiation of the inventory, what a way to do it then to go to the extreme and have that reach millions of people. I've personally stayed on a boat in an Airbnb. I've stayed in a yurt. I always look for the weird things, but I want to shift a little bit to marketing because there was a lot of conversations about you guys, I think about a year ago on your commitment to brand marketing. And I know you were talking about it publicly and saying why this was the move for Airbnb. Can you voice over the marketing philosophy that you all have that might be unique or different than what people might expect out of a company like yours?
Yeah. I think that this is what's been amazing about Airbnb. We have one brand, the Airbnb brand. It's all around the world. We put all of our weight and emphasis behind that and the uniqueness of what we can provide. And so this brand advertising just continues to highlight that uniqueness. It's why 90% of our traffic remains kind of direct or unpaid. We found that prior to covid, we were actually spending a fair amount more on search engine marketing and in Covid, we stopped all marketing and our traffic came back nearly to kind of pre covid levels. And it just proved to us that we were probably overspending on search engine marketing that we didn't need to do. And that's why we've continued to rely much more on brand marketing as the way to kind of inspire people for why they should be here. And it works incredibly well for us and we'll continue to use this as our primary driver of marketing in the future.
Yeah, it's interesting in your seat as CFO, they made a lot of waves because we've had CFOs on here talking about, for example, having teams convince them why they should run a Super Bowl ad. And when you're in that spot, it's difficult to measure the long-term investment in the brand. Are there any unique ways you all are tracking that or you just looking at pure data in terms of bookings and guests and hosts and seeing that grow over time?
I think it all needs to be combined together. I'd say that one of the places we're excited about this last summer was, for example, the Paris Olympics. And the Paris Olympics was the single biggest event in Airbnb's history. We had over 400,000 people staying in Airbnbs during the Paris Olympics. We also increased the amount of supply in Paris by over 40% year over year. So Parisians were excited about earning additional money while people were traveling into Paris. And then people were excited about the unique things that they could do there. We had an iconic event where people could stay in the MUE Dorse. We had thousands of people that had experiences with some former Olympians would take guests to Olympic events to share with them their expertise in these areas. So what we ended up doing is having this combination of an amazing iconic event, the Paris Olympics increase in our overall supply because people were excited about it and then hundreds of thousands of people staying in Airbnbs and doing unique things.
(11:35)
So I think it's how all those things tie together into one area and even do it back to the Super Bowl. We haven't had a Super Bowl ad for a while, but those kinds of events, they're iconic, and Airbnb helps the communities are having the Super Bowl actually host them because the peak of demand that is driven around these big events, Airbnbs can help augment and bring in new supply for guests to go there. And then the last thing that is amazing is that because we bring on more supply, it makes things more affordable. The average cost of an Airbnb in Paris during the Olympics was about the same as it was a year prior because we're able to bring on all the supply.
Dave, it's not always though been the case that Airbnb has been welcomed by cities in terms of generating that supply. New York being a case in point when it comes to short-term rentals. I know Airbnb's being engaged in a lot of regulatory conversations here in Manhattan at the moment. Barcelona has also raised its hand and said, we're not entirely happy with the implications of Airbnb for our city. Talk to us about that and then let's go from there to talk about your international expansion strategy.
Great. Well, I think actually New York is a really cautionary tale about regulating in not a way that is positive actually for the community. The intent was to regulate Airbnb because being blamed for the housing crisis. And the reality is a year later, actually rents are up. We don't have a significant increase in new supply. Hotel prices are way up, and the communities that had Airbnbs, the neighborhoods within Manhattan, within New York are not actually able to benefit from having people actually travel to them. So especially outer boroughs of Brooklyn or Queens or others that are not well-served by hotels are now completely underserved. So the communities are actually not benefiting from people actually staying in their neighborhoods. So I think it's a cautionary tale of overregulation, but we are seeing, when we do work positively with communities around the world, we actually can find great regulations that meet their objectives and continue to support the local economy and people coming into their communities to actually spend money.
So from that perspective, Dave, tell us where international expansion looks the most feasible or the most exciting for you guys.
Yeah, if you think about Airbnb, right, we have about one in 10 nights are on Airbnb. There's nine out of 10 that are actually taking place in hotels. And if you actually look at that in many communities around the world, it's even a lower relative penetration of our business. So there are so many markets that we can have additional nights that can accrete to Airbnb. And the ways which we do it are things like the initiatives that we just launched. You add things like additional payment methods to make it easier for local people to actually pay that will increase the expansion in those markets. We add co-hosts so that we can bring on more supply and make it easier to be a host and we'll end up growing in those markets. And then we're bringing some of the full funnel marketing. We can do unique marketing activities like John v Kaur was one of our iconic stars this last year in India highlighting. And so those are international ways that we can kind of talk to local consumers and be inspired about why Airbnb is the way that they might want to travel. And so those are some of the different ways that we are penetrating these other markets.
And across all these locations, both in the US and abroad, you must see very interesting data in trends on just behavior of how people are traveling or living remotely, especially post pandemic. Are there any interesting insights? I know I've had friends that have gone to remote states, different cities. Is there any impact on duration of stay or specific regions that you can share with us?
Yeah, a few things that we can share. I mean, prior to Covid, we had a high single digit percentage of our nights were of 28 days or longer. Those what we call those longer term stays kind of a month or longer. Those have now been in the teens. And so substantial step up and the number of people that are staying on Airbnbs for longer periods of time. And we're also just seeing a broader dispersion of travel. Airbnb historically had been very more concentrated in the bigger cities and has now spread out into more rural destinations. And I think that's been consistent around the world. And we in this last year even just achieved a 2 billion guest arrival milestone. 2 billion guests have now traveled on Airbnb. I mean, the dispersion around 220 countries all around the world is just absolutely incredible.
Dave, when we translate everything that's been going on into your share price performance, it's almost, I'm sure from your seat, quite frustrating, right? You've got these fantastic initiatives, you're scaling, you're creating really innovative ways for folks to get really unique experiences. And the consumer is really trending towards spend on experience over staff more and more and more. But your share price hasn't quite reflected recently, the level of exciting activity. One of the thesis out there is that if the consumer who's been suffering from inflation where they've depleted their covid savings, there's a little bit more uncertainty out there. If they're going to spend money on travel, they want a full service. And that's where the hotels, there's one thesis may continue to win. What do you say to those investors who are saying, you know what? I think hotels are going to be where consumers are going to go for their luxury or for their rare vacation spend?
Well, I'd say a few things. I mean, regarding this stock price, Benjamin Graham quote, I think is the best one, is that in the short run, the stock market is a voting machine. In the long run, it is a weighing machine. And I think in the long run, we'll continue to be weighed incredibly well as a successful company, we'll do that by relentlessly driving for improvements in the service and continue to be innovate on behalf of our guests and our hosts. And I think that's what we're doing specific on value. I think Airbnb was created because we're able to create great value for travelers, right? You can have a great price for often more amenities, maybe a little more space, maybe better location, maybe some amenities, washer and dryer, a fully stocked kitchen, et cetera. So I think the value overall continues to be really important.
(18:05)
And that's the one things that we continue to drive for and aspire to do. And as we actually provide those offerings to people, they can travel on an Airbnb. And we're actually taking more share from hotels over time because people are finding that convenience of location and amenities to be extremely powerful. And then we'll continue to do improvements like we just did some of the 50 improvements we did, and one of 'em is on the host side to enable them to price better and to have price tips so that they know what they should charge for their home and provide, again, great value to our guests. So I'm not concerned about our stock price in the short term. I'm concerned about it in the long term to show that we've been successful. And I think that all these improvements will prove out that success.
So Dave, zooming out a bit to you personally have to ask. There's been a lot of conversation after your founder and CEO, Brian Chesky, shout out Albany, New York, went on a podcast talking about founder mode, and now it's the thing everyone's talking about. As someone who works closely with him, what does that look like in your day to day and what's that experience like?
Yeah, no, I love his talking about being in founder mode. I love working at founder-led companies. So clearly is that, and clearly Amazon is that as well. And one of the things I think is about founder led is just having the founders be in the details that they're not abdicating decision-making rights just down to people and letting them do whatever they want and just kind of do it through kind of a management style of just a delegating responsibility and then hoping that they'll have success. They're in the details, and they're ensuring that the leaders are taking the right actions to kind of drive the business over time. And so that's the way Brian is. We're very hands-on. We make decisions together. We align on the direction we're trying to go, and he understands all the nuances of the business very viscerally. I think that's a key difference in founder mode. So not to delegate, but to be in the details.
And Dave, I know that we're coming up in time for you, but really, really interested to know, you joined Airbnb as the chief financial officer, CFO, often one joke, cf No, the disciplinarian of an organization. So frequently you joined in time for preparation for an IPO and actually going through quite a difficult time at the company restructuring and getting some focus in. Now that you are growth oriented and it's all about trying to strive for yes. And for new ideas, how has that difference in focus gone for you personally in your career trajectory?
I think the best CFOs are great business leaders. I think they really understand the way in which you are going to drive and see success in the business. And so I've always felt like my role is to partner and not be the cf no, but actually to be bring guidance and counsel for making the tough decisions. And so that's why I'm excited about expanding from being this CFO business partner side to now the other side and being the kind of business driver. So I don't see it as much of attention and difference from what I see as the most successful CFOs. And now with Ellie Mertz as our new CFO, she's fantastic. She's another one of those incredible collaborators that understands the business very deeply.
All right. Well, thank you so much, Dave, for your time and also want to give props to you all. I know you're doing some efforts with hurricane relief right now, which is I think super important. So definitely check that out if you haven't heard about it, and we hope to have you back on the show again soon.
Great. Well, thanks for having me, and thanks for the shout out for airbnb.org. They do amazing things. We have thousands of people that we're helping by staying in Airbnbs while they're being displaced by the hurricanes that we're seeing in the Southeast. So thanks for that. Shout out and great to talk to you today. Wow.
I'm Katie Perry. This is After Earnings the show brought to you by Morning Brew and Stakeholder Labs. Every week we bring you behind the scenes of a different publicly traded company.
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