Airbnb is tackling reliability in its most recent product update as it wants to remain competitive with hotels.
The travel company has the advantage of having various types of properties on its platform, but customers have talked about hotels having better service or Airbnb listings not being reflective of the description.
The company’s latest move — part of its winter release 2023 — is to try and tackle it with a redesigned review interface, a new badge for highly-rated properties, and tools for hosts to easily provide more info about their property.
Brian Chesky told TechCrunch in an interview that people often stay in hotels because they know what they’re going to get in terms of service.
“Our homes are one of a kind — that’s a strength [for us], but their reliability is the big question. We can’t inspect every home, and we don’t want to try to inspect every home. So we’re just going to be investing a lot more into a review and reputation system. That’s why we’re upgrading reviews, and we’re going to be doing a lot more stuff like that,” he said.
Image Credits: Airbnb
Airbnb is rolling out a redesigned reviews page with a carousel up top showing overall and category-specific ratings. Users can now also sort reviews by most recent or highest rated. This doesn’t mean that those reviews will be descriptive and you will get to look at additional or important details someone has posted.
Additionally, the company is rolling out a new badge called “Guest Favorites” to mark highly rated properties. To get this badge properties need to have a 4.9 rating, less than 1% of cancelation rate, and less than 1% of incident rate. Airbnb is trying to bake in customer service incidents to understand if the property is worth being given a badge.
Keep in mind, that Airbnb already has a “Superhost” badge, given to hosts with a minimum 4.8 overall rating across properties; less than 1% cancelation rate; and at least 10 short-term stays or 100 nights stayed in the past year. While “Guest Favorites” change weekly, the “Superhost” badge is evaluated quarterly. It’s hard to expect a customer to know all these caveats and distinctions for a badge.
Image Credits: Airbnb
Chesky admitted that the five-star rating system is not perfect, as he noted that a property with a 4.6-star rating on Airbnb lies in the bottom 20%. So while users might think it’s a good property, they might not get the best experience.
“We didn’t want to blow up the five-star rating system because we have more than 317 million reviews and two out of three people leave a review on our platform. But we will try to create more context on the rating with labels like guest favorites,” the company CEO said.
Image Credits: AirDNA
On the host end of things, Airbnb is rolling out an easily accessible “Listings” tab on the home page. The new tab has tools like a way to easily add amenities, and an AI-powered photo tour, which arranges images uploaded by the host by different rooms automatically.
Image Credits: Airbnb
The company is trying to increase the reliability of the platform by asking both hosts (through listings) and guests (through reviews) to provide more information.
Bram Gallagher, an economist at AirDNA, said that heterogeneity is a big challenge for companies like Airbnb, but it’s also a big draw for customers.
“I don’t think Airbnb wants to commodify listings by making them uniform. A move towards providing more details would relieve some of the uncertainty in consumers that might be preventing them from going to a short-term rental,” he said.
Investing in AI and future roadmap
Airbnb has introduced a few AI-powered features in this release, but the company is already testing more stuff. Chesky said the travel booking company is testing review summaries. He noted that those summaries can also take into account prior info such as customer service contacts.
The company’s co-founder mentioned that generative AI can improve areas such as search, identifying amenities of a property from photos, and customer service. In particular, it can help with language translation between a host and guest who are fluent in two different languages. Additionally, AI can also help in quickly parsing the policy pages to understand what might be relevant for an issue — both for users and customer service agents.
In a set of interviews in the last few months, Chesky said that Airbnb is trying to overhaul its core services before focusing on other things. He told TechCrunch that there might be one or two releases focusing on improving affordability, reliability, and customer service.
Airbnb registered $3.4 billion in revenues for Q3 2023 with an 18% growth year-on-year. However, the company presented cautious guidance saying that it is seeing “greater volatility early in Q4.”
In a note to investors, Bernstein said that the firm adjusted its night booking guidance for the financial year 2023 from 455 million to 449 million because of the guidance.