It’s been an intense couple of weeks for Airbnb. After its big win on San Francisco’s Proposition F, which sought to limit the amount of time hosts can rent their places as temporary lodging, a story of an unfortunate fatal accident at an Airbnb went viral and a Harvard report suggested Asian hosts in Oakland, California earn less than their white counterparts.
Airbnb executives nevertheless decamped to Paris for a user conference, where they’ve unveiled a set of features aimed at making life easier and more lucrative for its millions of hosts across the world. In addition, Airbnb just released what it’s calling its Community Compact, committing to deal with every city individually, pay proper hotel and tourist taxes, be transparent with data about home-sharing activity, and work with cities to help prevent rental shortages.
At the same time, Airbnb tells Fast Company exclusively, it is already at work on a range of initiatives intended to improve the search experience for those who rely on the service to find short-term lodging, mainly through making it more personal and responsive to users’ individual needs, and leveraging some of the features other search and review sites have long offered.
The moves comes as the company is grappling with incredible growth, currently listing 1.7 million homes worldwide and serving 60 million guests globally, up from 35 million just this January, with half of its business in Europe, 30% in the U.S., and 20% elsewhere.
Some may have an impression that the only people renting out their homes are the well-off with second homes. But according to Airbnb’s vice president of product Joe Zadeh, about half of all Airbnb hosts earn less than the median income in their area, while 60% of hosts use their earnings to help pay for their own home. The typical host earns $7,530 a year through Airbnb, which Zadeh said is equivalent to a 14% pay raise.
The company believes there is even more earning potential out there, especially if hosts believe they can still trust the people using Airbnb to stay in their homes, in spite of a flood of first-time users of the service who may not understand that they are guests in someone else’s home, and should treat it respectfully.
“We want to educate our hosts,” Zadeh says, “and help our hosts provide a better sense of hospitality.”
To that end, one of the new features Airbnb is rolling out this week is a new on-boarding process that requires all guests to have a profile photo. The company believes this will help hosts have a better sense of trust as they decide whether to accept guests’ requests to stay in their homes.
Another new feature is a smart-pricing tool that will help hosts figure out what to charge for their places. After hosts define a minimum and maximum price, the tool will leverage a mountain of data to automatically suggest pricing based on day of the week, whether any special events are taking place nearby, or seasonal changes in visitor rates.
The system will sometimes even recommend dropping prices in order to make more money, as lowering prices often means more people will book.
During a trial of a similar tool that suggested price tips to a few hundred thousands hosts–spanning 20 million total nights booked–Zadeh says those following the recommendations got 13% more money than they had before. Now it’s being rolled out to all of Airbnb’s hosts in hopes it will help many hosts’ unease about pricing.
“We found by doing interviews and making observations of hosts that pricing turns out to be this incredibly complicated and uncertain process,” Judd Antin, Airbnb’s director of experience research, says. “There’s so much incomplete information about the market. Hosts seem unequipped, and there’s lots of anxiety.”
Another new tool available to hosts and guests alike is Host Assist. This is built around the idea of making it easier for guests to get access to the place they’ll be staying at, and means Airbnb is integrating multiple key-exchange systems into its service.
One involves allowing guests to access hosts’ homes via an August smart lock, which lets users open a door with August’s mobile app. Another is the adoption of a system of Keycafes, physical locations like coffee shops where hosts can leave their keys for guests to pick up.
Finally, Airbnb is also rolling out a new host mentoring program that will see veteran hosts helping newcomers in their area. In tests of that program Airbnb found that existing hosts didn’t see those newcomers as competition, despite the proximity of their new listings.
“Hosts are presenting unique experiences,” says Antin. “It’s not ‘my listing versus your listing.’ It’s the hospitality [that’s] the skill they’re proud of and they want to share it with others….From most of the host research we’ve done, we don’t see hosts seeing it as a zero-sum game.”
As Airbnb grows, it is also grappling with how to make its service more useful to guests. That’s especially important as the number of listings people see when they set out to book skyrockets. For example, a basic search for a place for a week in New York City this December returns hundreds of listings, far more than almost any potential guest can wade through.
Where hotels in New York tend to be concentrated in a small number of neighborhoods, that’s not at all the case on Airbnb. Nor are listings homogenous in style. They might include a treehouse, a studio, an Airstream, a modern light-filled, high-floor masterpiece, or a dark, pre-War apartment, to name a few.
“That multi-dimensionality,” Eric Ruth, a project manager on Airbnb’s search team, tells Fast Company, “is what makes search and matching challenging.”
Letting users quickly define the neighborhoods they want to be in, how many guests there will be, and the dates of their trip reduces the number of listings, but likely not enough to make it easy to find a great match. This is a crucial problem, Ruth says, because “if you invest [a lot of] time and don’t find listings that meet your criteria, that’s time lost, and people bail.”
Many of the search tools Airbnb is experimenting with may seem obvious, especially to users of Yelp, Amazon, or even Google. But these are all new to Airbnb–or may be new someday soon–making the company hopeful that the added functionality will make finding a place to stay an easier and better experience which, in turn, drives more bookings and more revenue.
Zadeh says that while hosts use mobile devices at some point in the process on more than 65% of reservations, the company’s mobile app has only presented very simple search choices for guests that return broad results with no personalization, unlike what’s found on Airbnb’s desktop site.
But Airbnb is eager for mobile to be a bigger part of its users’ experience. That’s why it started to test features in its mobile app that will query potential guests’ preferences. For example, Ruth says, someone could say they are traveling for business and the system will ask for their work location. The Airbnb algorithms could then surface listings that are close by.
Airbnb is also aware that users get frustrated if they put time on one device into searching for a place, but later resume their search on a different device only to find all the work they’ve done is lost, forcing them to start over.
“We’re trying to create continuity across devices,” Ruth says, meaning that all the criteria a user sets during one search and the results will carry across when they return, even on a different computer, smartphone, or tablet.
The company is further aware that when people enter criteria, they want to see as many listings as possible that meet them. “Rather than you having to do a lot of legwork, and dig, dig, dig to find a few listings out of a sea of many,” Ruth says, “we know you entered these preferences, so how do we take that information and infer great recommendations? We’re looking for timely moments in that flow.”
Airbnb has started an experiment where, as users look at individual listings, its algorithms come up with additional places people might like that are similar. At the same time, Airbnb is looking to leverage its Wish Lists feature, where users can effectively save listings they’re interested in, and make additional recommendations based on them.
“If I have three or four places I’m looking at for a trip to New York City,” Ruth says, “that sends strong signals. We can look, do data analysis, and recommend a variety of [other] listings.”
Airbnb is also planning on asking potential guests about what Ruth calls the “neighborhood vibe” they’re seeking, as well as attractions or landmarks they want to be near, or things like proximity to public transportation.
“If we can understand a point or set of points, or type of experiences” guests want,” he says, “maybe we can guide you to listings. What we try to do is look at a variety of dimensions that are proxies for quality of experience.”
Airbnb will also be looking more at the number of listings users peruse before booking, as well as how long it takes to go through the booking process. “We’re looking at more qualitative data,” Ruth says, “We’re asking questions like how easy was it to find the place you want? Or how did the prices of places meet your expectations? We’re trying to get a better sense of the right questions to ask…in a way that we know we can test against that or measure experience against that.”
Recently, he explains, Airbnb conducted research that led it to conclude that the top three factors someone uses in trying to determine if a place meets their needs are photos, price, and, less intuitively, previous user reviews.
“Reviews are interesting, because they’re an aggregate signal,” he says. “They comment on different aspects of a listing,” than initial search criteria might suggest.
Reviews are a big area of experimentation and focus for Airbnb, Ruth continues. “We’re trying to unpack reviews to make it easier to find them and digest them. People are gravitating toward them to assess places.”
One way the company hopes to make reviews more powerful is to let signed-in users mark a review as helpful. “There’s multiple benefits to this,” Ruth says. “Once you see people marking reviews, you get a signal of which ones you should look at.”
As more people mark reviews as helpful, Airbnb can help users avoid spending so much time searching. The company wants to “help you get to tidbits of information rather than have you sift through a massive pile of reviews,” says Ruth, “We’ve found it’s a pretty powerful way to evaluate if a listing’s a good fit for them.”