Airbnb is reinvigorating individual room rentals in a nod to its early days and the realization that renting an entire home is too expensive for many travelers, especially younger ones.
The short-term rental company launched a new offering on Wednesday that it calls Airbnb Rooms. Guests can rent a room in the same house or apartment as their host at prices that Airbnb says will average $67 per night.
“It’s an admission that travelers care more about affordability than they did a year ago,” said CEO Brian Chesky.
Airbnb has always included individual rooms in houses and apartments. The company said the new offering will provide more biographical information about hosts, and consumers can sort through listings to learn details, even if their room door is locked and the bathroom is private or shared.
It’s a return to the original concept that Chesky and Joe Gebbia, now the president of Airbnb, had in 2007, when they hosted guests at their San Francisco apartment to help pay their rent. Since then, Airbnb listings have shifted toward full houses and prices have skyrocketed, to an average daily rate of $153 late last year.
“This is going to be especially popular with the next generation of travelers,” Chesky said of the new offering. “The average Gen Z traveler wants to pay less than $100 a night.” (Generation Z is generally defined as people born roughly between the mid-1990s and 2010.)
It is an interesting tactic. During the pandemic, Airbnb took business from hotels because travelers wanted rentals where they could avoid contact with strangers. Its rival Vrbo, owned by Expedia, continues to run ads boasting that it only rents out entire houses.
Airbnb made $1.9 billion last year, the first full-year gain in its history, on higher bookings and revenue. Analysts expect the San Francisco company to be even more profitable this year.
Airbnb has also had its setbacks. Resistance to high cleaning fees prompted the company to change the way prices are displayed in November, which it says will curb runaway fees. Airbnb declined to provide figures when asked if rates had gone down.
And social media posts about lengthy payment instructions went viral. Some hosts asked guests to perform tasks like taking out the trash and washing the sheets, even though the guests paid a hefty cleaning fee.
Airbnb said it will allow consumers to view checkout listings before booking. It is also tweaking the hosting side of the app to encourage owners not to add tasks that could lead to bad reviews and get them removed from the platform.
“In six months to a year, there should be a material reduction in burdensome pay tasks,” Chesky said. “Let’s hope this isn’t a meme anymore.”