Dive Brief:
- Airbnb has introduced a new category on its platform, called Airbnb Rooms, hearkening back to the home-share giant’s original model of staying in a room in someone else’s home.
- The category includes a curated set of 1 million private bedrooms, 80% of which are available for under $100 per night. The average room rate is $67 per night, Airbnb said in a release.
- With Airbnb Rooms, the company aims to attract travelers away from hotels by offering low prices as well as “connection” with room hosts.
Dive Insight:
Though numerous reports find consumers aren’t pulling back on their travel spend, Airbnb has introduced a new category for travelers looking for affordable accommodations.
“With Airbnb Rooms, we’re getting back to the idea that started it all — back to our founding ethos of sharing,” said Airbnb Co-Founder and CEO Brian Chesky in a release.
Chesky said Airbnb Rooms are often less expensive than hotels, and “they’re the most authentic way to experience a city. This is the soul of Airbnb.”
According to MarketWatch, in a media presentation Tuesday, Chesky compared the price of Airbnb Rooms to basic hotel rooms. He noted that a room at a Mexico City Sheraton costs $144 a night on average compared to an Airbnb Room that costs $124 a night, comes with a fireplace and is located away from tourist traffic.
By staying with a host, however, travelers lose the benefits of a private hotel room and a hotel’s amenities.
According to the American Customer Satisfaction Index Travel Study 2022-2023, guest satisfaction with amenities is up by 10%. A 2021 Expedia Group study also found that 70% of guests were willing to actually pay more for properties that have their favorite amenities and services.
To increase guests’ comfort, Airbnb has introduced what it calls a Host Passport to let travelers get to know their hosts before a visit. The company has also added new privacy features that clearly indicate if a bedroom door has a lock, for example, and if the bathrooms are shared or private.
Last year was Airbnb's most profitable full year on record, with $1.9 billion in net income according to its fourth-quarter and full-year financial reports. Average daily rates decreased by 1% to $153 in the fourth quarter of 2022.
