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Airbnb’s total third-quarter revenue grew by 18 percent compared to a year ago, to $3.4 billion, showing that the leading short-term rental platform is still riding a wave of strong travel demand.
That’s more than double what it earned in 2019 before the pandemic began and was in line with the company’s expected performance, despite losing tens of thousands of listings in New York City during the quarter.
The increase was driven by a near-equal jump in gross booking value, or the total amount of money generated for the company and hosts. Gross booking value grew by 17 percent year-over-year, to $18.3 billion for the quarter.
Airbnb leaders said on Wednesday they were focused on continuing to expand internationally, grabbing more of the market share from hotels, and harnessing the power of artificial intelligence to continue the company’s rapid growth.
“What we’ve seen is that our penetration in the U.S. is significantly higher than our penetration in many other countries,” CEO Brian Chesky said on a call with investors on Wednesday.
The number of nights and experiences booked was up 14 percent over the same quarter in 2022.
The average price of a night booked on Airbnb actually dropped by 1 percent in the U.S. compared to a year ago, but grew 6 percent overseas. It now costs an average of $161 to book an Airbnb.
Active listings grew 19 percent in the quarter, with growth in all markets and regions. Hosts have added more than 1 million new active listings to the platform this year, the company said.
The growth comes despite intense regulation that went into effect in New York City during the quarter.
The company noted that the Big Apple represented about 1 percent of total revenue and that most of its top 200 biggest markets already had regulations in place, suggesting that the company doesn’t expect more hits like it took in New York.
Airbnb is set to release new features and updates next Wednesday, and Chesky hinted at what the company is focused on. Specifically, he said, Airbnb needs to beef up its perceived reliability.
Booking an Airbnb isn’t as reliable as booking a hotel room, Chesky said. But the company plans to release changes that he hinted would help grab more market share from hotels.
“For every person who stays in an Airbnb approximately nine people stay in a hotel,” Chesky said. “When you ask people, ‘Why do you book a hotel and not Airbnb?’ the usual reason they come up with is reliability. They know what they’re going to get before they book.”
That’s both a strength for the company, given that each Airbnb home or room is unique, but it’s also a weakness the company plans to address with an upcoming release and through artificial intelligence.
“Next week we’re going to have some new offerings that are going to make a pretty big dent in this,” Chesky said. “We just keep focusing on reliability, making sure that when you book you know what you’re going to get, and, if there’s ever a problem, you have excellent customer service that is as good as the front desk.”
One of the company’s most challenging logistical problems is handling guest complaints after they arrive at an Airbnb. Chesky said the company is operating in 100,000 cities in 220 countries, which creates a labyrinth of rules and regulations in hundreds of different languages.
AI, Chesky said, can vastly improve the process of handling disputes, making the platform more reliable for guests.
But guests can also benefit in the future with the addition of generative artificial intelligence onto the platform, Chesky said.
“Generative AI can match you in a way you’ve never seen before,” Chesky said.”Imagine Airbnb being almost like the ultimate travel agent as an app.”