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Airbnb’s CEO sees a recession opportunity—renting out a single room in your house

November 16, 2022, 9:23 PM UTC
A host on Airbnb at home in Milwaukee.
Courtesy of Airbnb

Airbnb wants you, me, and our mothers to list our homes on its site. Well, they want to make it easier for hosts to do so, at least.

The company unveiled a laundry list of new offerings and updates intended to make it easier for people to host their homes and, cofounder and CEO Brian Chesky tells Fortune, improve the quality of listings.

Coming off Airbnb’s best single quarter in the history of the company, Chesky believes the post-pandemic leisure travel boom will continue. At the same time, he’s betting that a continued economic downturn will result in people turning to easy ways to earn a little extra scratch on the side.

During the pandemic, the typical new host in the U.S. with just one listing pulled in $3,900, the company reported—not a small sum considering today’s sky-high inflation.

“We want to get more everyday people to share the homes they live in, whether they’re there or not there,” Chesky tells Fortune over Zoom on Wednesday. “The economy will probably continue to slow down. If that is the case, people more than ever are going to want to make extra money. One of the best and easiest and most straightforward ways to make extra money is [to] take the biggest expense of your life—for most people, it’s their housing—and defray the cost by sharing it when you’re not using it.”

Airbnb announced Wednesday it’s connecting new hosts with a “Superhost” in their area for one-on-one guidance—a sort of Airbnb mentorship program. The company’s also hooking up new hosts with an experienced guest for their first booking, and it’s shoring up the company-host support service.

In addition to those startup services, Airbnb introduced a comprehensive guest identity verification system for renters and reservation screening that blocks bookings it deems are high-risk for “disruptive parties and property damage,” and increased the damage protection for hosts to up to $3 million from $1 million.

Rising Airbnb prices haven’t hurt guest demand

Despite rising inflation and an economic outlook that has Americans bemoaning the costs of food, gas and housing, Airbnb pulled in a record $1.2 billion in net income in its most recent quarter; a 46% jump compared with the same quarter a year ago.

Still, the company’s stock took a hit after it provided guidance on fourth quarter expectations that were below Wall Street’s hopes, anticipating a bumpy post-pandemic travel recovery and a strong dollar that would curtail prices of Airbnbs abroad.

While Airbnb started in the midst of the Great Recession as a more affordable alternative to hotels, guests have increasingly shuddered at the cost to book rentals. The average daily rate during the recent third quarter was $156 a night, up 5% year-over-year, and roughly 40% from pre-pandemic levels.

Though more and more customers have criticized the amount of fees and tasks levied on them from hosts, bookings were up 25% that quarter. The company also recently took a stab at combatting those hidden fees, letting users search by the total cost. Chesky says the service will also rank the best Airbnbs by value near the top of search results.

The company has said that guest demand, in part fueled by long-term stays during the pandemic, remained strong, though some hosts have sounded the alarm of bookings falling “off a cliff.” Chesky hopes more hosts, going through the setup program to improve value, will help balance the supply and demand of Airbnbs to keep prices in check.

“I want to make sure that when people come to Airbnb they have a great value, and that means we need enough homes to choose from to make sure that you can find the best home at the right value for you,” Chesky, who’s listing his home on Airbnb—again, says.

“Everything starts with our hosts, right? When people make a complaint about Airbnb, they’re complaining about the service that is a relationship between Airbnb the app, Airbnb the host, and the customer service,” he continued. “That means that to make the service continually delightful, we as a business have to get into the nitty-gritty… We’re only as good as our hosts.”

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