Brian Chesky is co-founder and CEO of the room broker Airbnb. He talks about overtourism, hostility towards his company. “People have the wrong idea about who our hosts are”
Mr. Chesky, you came to New York to present new offers on Airbnb. Yet New York has recently been a rather hostile place for you.
There are many things I love about New York. The policy towards Airbnb is not one of them.
For about a year now, a law has been in force here that makes renting out on Airbnb considerably more difficult. You said beforehand that this would be a “de facto ban”. Would you say that Airbnb is now de facto banned in New York?
When it comes to short-term rentals of less than 30 days, that does indeed seem to be the case. There are only a few very narrowly defined exceptions. And the city has not achieved the goals it set out to achieve.
What does that mean?
There was this theory that if you ban Airbnb, you can bring apartments back onto the rental market and rents will fall. But the opposite has happened. Twelve months later, the data shows us that rents in New York have continued to rise, by more than three percent. And hotels are more than seven percent more expensive, they are now making billions in additional revenue. But that just means the city is even less affordable. People have often wondered what would happen if you banned Airbnb in a big city, and now we know. I think there could have been a different solution here, allowing people to rent out their homes temporarily. But ultimately that’s the city’s decision and we respect that.
Does it annoy you personally when the hotels benefit from the ban while your business suffers?
Yes, a little bit. I said at the beginning that nobody benefits from this ban. It’s not as if Airbnb loses and New York wins. But then I realized that hotels are winning and are now earning a lot more money. Airbnb has already been hit economically, but New York accounted for less than one percent of our turnover, we are in 100,000 cities around the world. What annoys me most about the ban is that our hosts are no longer allowed to rent through us. People sometimes have the wrong idea about who these hosts are. For example, there are many teachers, artists and nurses among them. There are other ways to regulate them. For example, you would only be allowed to rent out a certain number of days a year on Airbnb and then it would no longer make sense to remove apartments from the regular rental market altogether.
Does it annoy you personally when the hotels benefit from the ban while your business suffers?
Yes, a little bit. I said at the beginning that nobody benefits from this ban. It’s not as if Airbnb loses and New York wins. But then I realized that hotels are winning and are now earning a lot more money. Airbnb has already been hit economically, but New York accounted for less than one percent of our turnover, we are in 100,000 cities around the world. What annoys me most about the ban is that our hosts are no longer allowed to rent through us. People sometimes have the wrong idea about who these hosts are. For example, there are many teachers, artists and nurses among them. There are other ways to regulate them. For example, you would only be allowed to rent out a certain number of days a year on Airbnb and then it would no longer make sense to remove apartments from the regular rental market altogether.
In Europe in particular, there has recently been more and more discussion about overtourism. There have been demonstrations, and in Barcelona tourists have been sprayed with water pistols by locals. This anger is not only directed against Airbnb, but to some extent it is, and Barcelona is planning a ban on Airbnb. Would you say you are sensing increasing hostility?
I think in some cities there is increasing hostility, in other cities it is decreasing, it’s not so easy to generalize. It is undeniable that in some cities like Barcelona there is increased tension between locals and tourists. When it comes to overcrowding in city centers, a lot of that has to do with tourists staying in hotels or just coming for the day on cruise ships. Of course, there are also Airbnbs in city centers, but we are also in neighborhoods where there are hardly any hotels. In this respect, Airbnb can contribute to the problem, but also to a solution to the problem, because we distribute tourists more widely throughout the city. Incidentally, our business is moving more and more towards longer stays. One day, you might even be able to rent apartments or houses via Airbnb.
So Airbnb could merge with the normal rental market to a certain extent?
Yes. People always think of Airbnb as a short-term rental, but recently 17 percent of overnight stays booked were for stays of more than 30 days. And in the longer term, I imagine that people will pay their rents via Airbnb. I think that will absolutely happen.
One of the main points of criticism in cities like Barcelona or Lisbon is that in some neighborhoods, a high proportion of apartments are rented out via Airbnb and are missing from the regular rental market.
Our aim is not to bring even more people into already lively neighborhoods. Rather, we are actively trying to redistribute travel. One of our innovations, for example, is a more personalized app, and that includes suggesting destinations that are less crowded. And if you search for Barcelona, for example, apartments outside the city center are also displayed. The redistribution of demand is also to our advantage. If everyone only wants to go to ten specific cities, then the hotels win. If they are spread across 10,000 cities, Airbnb wins.
But from the point of view of many of your hosts, it is presumably desirable to offer accommodation in the most sought-after areas via Airbnb?
Sure, that’s 100 percent true. And if there is a conflict between the economic interests of hosts and the goals of a city, then sometimes you have to come up with restrictions. From our point of view, this also works as long as the restrictions are not overly strict and the bureaucracy is limited.
When you presented your latest business figures, you said that you want to grow much faster than is currently the case. What is holding you back at the moment?
Let’s start by saying that we are already really big today. Our bookings are now around 90 billion dollars a year, people spend more money at Airbnb than at Starbucks, for example. But there are a few things we can do to accelerate our growth. Firstly, we need more accommodation on our platform. This will be helped by our new co-host network that we’re launching now. So we’re offering to match people with experienced co-hosts when they rent out accommodation on Airbnb. This means that in future, you no longer need to have both living space and time to rent out on Airbnb, but only living space. We think this could open up hundreds of thousands, if not millions, of accommodations for us and be a game changer for Airbnb.
What other plans do you have?
We want to work on quality and consistency. We started out as a cheaper alternative to hotels, so expectations were not so high. But now we are also moving into higher price ranges and competing more with hotels that offer a range of services to their guests, so we should adapt our offering accordingly. For every person staying in an Airbnb today, there are nine others staying in a hotel. If we add just one more person to our site, we will be twice as big as we are today. We also want to push ahead with international expansion. We are represented in almost every country in the world today, but in many regions our presence still has enormous potential for expansion and we are still just scratching the surface. We also see massive opportunities to expand our business in Germany. The last point is new products and services. Airbnb will one day be much more than short-term rentals. You will be hearing more about this from us next year.
What does that mean exactly?
I can’t say that in detail yet. We will be giving our so-called discoveries – our range of activities – a completely new twist. They are well received, but have never become as established as our rentals. But there will be other things too. I’m planning to launch two to three new businesses in each of the next five years, which will eventually achieve an annual turnover of at least one billion dollars.
What does that mean exactly? In which direction do you want to go with Airbnb?
I can’t say in detail yet. We will give our so-called discoveries – our range of activities – a completely new twist. They are well received, but have never become as established as our rentals. But there will be other things. I’m planning to launch two to three new businesses in each of the next five years, which will eventually achieve an annual turnover of at least one billion dollars.
Even if you don’t want to go into detail yet: Will these new businesses still be close to the existing core of Airbnb, or do you want to do something completely different?
We will start with our core and move outwards from there. What comes next year will have more to do with travel, but who knows what we’ll be doing in ten years’ time? Let’s take a look at Amazon: They started by selling books. Then they sold more and more other things and then even did completely different things like offering computer capacity via Amazon Web Services. I think we will do the same. We’ll start with things that are closest to our core and then we’ll go beyond that.
Are such expansion plans to some extent a reaction to the fact that regulators are attacking your core business?
That has nothing to do with it, and in general we don’t feel under attack. We are in 100,000 cities and in the vast majority of them we have no major problems. We want to expand because people want more from Airbnb. I’m only 43 years old, and I don’t want the best or only idea in my life to be the one I had when I was 26. I also think that new businesses also make our core stronger.
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