My Thoughts on AIRBNB PLUS and Brian Chesky's Big Announcement!! (2018)
Hello friends. Yesterday February 22nd 2018 was a monumental day for the history of Airbnb. Brian Chesky the CEO came out he delivered a keynote speech for about an hour. And he talked about the future of Airbnb. They called it a home for everyone. I think it's really worth watching if you haven't seen it. That will include the link below. I'm not going to summarize it on this. What I'm going to do instead is talk about what it means for us as hosts and the future of hosting and my thoughts and interpretations on the big announcement. But first a little backstory as you may or may not know there was a power struggle at Airbnb. The CFO who is an ex Blackstone person left he really wanted the company to go public. Brian Chesky the founder really wanted the company to focus on the experience and the guests and the hosts and so on. And I think yesterday's announcement was the culmination of probably what they were fighting about. There wasn't a ton of information in there that would drive the public markets and get more revenue in there. It really was about the experience itself. So Brian Chesky is the founder. He won the argument the Blackstone executive who wants to go public is out and hear the things that Brian Chesky wants us to all focus on for the very first thing Brian talked about was superhot benefits. He announced custom you are Elz which I think is a great thing. How often do people ask you for your listing and you have to look it up and copy and paste or not even give it to them because you don't know how to access it. But now if you are able to name because your Super hosts your property and share that you are well it's easy to remember it's easy to share and now you're building your business. I think that's great. There's also things like buying power and buying clubs and I think that's wonderful too.
It's not really going to motivate me to become a super host as much as the revenue associated with Super hosts but I would really like to see as the company matures they recognize that for the longest time they've been focused on the guests only and it's really now time to focus on the host for In fact Air B and B doesn't have a business at all. If they don't have happy hosts. So it's really nice to see them focusing on the host. Although I think there's a lot more room for improvement. I do like the fact that they got started and I encourage them to continue spending more times with more host to understand what it's like in our shoes every single day. So as they grow the business they have more hosts and happier hosts. The second thing Ryan talked about was a new concept it's called Super guest and I think that that's really interesting. Of course it really depends on how it's actually done right. A lot of this stuff is qualitative it's soft. It's based on other people that have never met one another reviewing one another. But all things being equal I as a host would love to know that somebody is a great guest. I don't know what the differences between a great guest. The way I currently defined them with a lot of reviews and trust and good communication versus the super guests so it's to be determined. But the concept of trust knowing somebody trustworthy is coming and saying my house is worth a lot.
Now here's the rub. Brian goes on to say that many people would like to have these super guests at discounted rates or give them more freebies or so on and so forth which is again at odds with a hosting community. It's really helping the guest get discounts and it's asking the host for that trust to lower their prices. To determine how this all plays out I like the concept but I do think it's downward price pressure. The third item discussed yesterday was called category's and collections. This is really a refinement of the user experience and I think it's long overdue. I as a guest on Airbnb have a lot of difficulty finding a place that's suitable for me and I spent a lot of time just searching and searching and searching and I think Airbnb is probably in spending time speaking to guests and understanding their frustrations has developed. Basically a superior user experience so that you can search and refine things looking for say a penthouse apartment or views are family friendly. They will also then categorize things into like gourmet kitchen and so on. So in a nutshell there's a big overhaul and a big emphasis happening on the guest search experience which I think will ultimately reward both the guest and the host. As you're matching more people with the right property faster making it more convenient and likely increasing the number of conversions and bookings. The fourth item is perhaps the largest and most exciting slash controversial. So today I'm excited to announce that we are introducing air Moonbi plus.
I'm just going to tell you my personal opinions and I will go on the record as saying I reserve the right to change it. I keep an open mind. And so I will pay close attention and I will let you know and updates what I think about it. But it's called FBN B plus. And now this is basically a higher level of super hosting program people that have met certain qualifications and in fact they've announced 100 point checklist. I think it's announced in 13 cities today it's going to roll out going forward. I have a question about that roll that it could take a long time I mean hiring people training people getting people into individual homes. That could take years decades even. So I do have a question about the viability and the scalability of it but we'll put that aside. Let's assume that they have the perfect process the perfect training the perfect people and they come into your home they've got a 100 point check. You know I think that's a great idea. Assuming that it's fair. But I also think that there's a lot of room for interpretation perhaps even abuse. Right. I mean they're asking people to pay for this. You're going to wait. You're going to get somebody into your home and there's a 100 point check list let's just say that you get 99 pass in one fail. OK. I think you probably pass. But what if it's 64 and the passing grade is 65.
Now all of a sudden you fail. So I just kind of think that there's a lot of room for people to be disappointed or then there's just a lot of like wiggle room and then it's kind of meaningless. So I guess what I'm trying to say is this I personally am not going to jump through hoops or hold my breath to try and be in this plus program if I qualify. And it's relatively straightforward and somebody can come in on a vacant day and it's not a lot of time or energy for me. And I think it's going to increase revenue. Of course I'll do it. Why wouldn't I do it. But I'm just not sure that the mechanics are actually going to work. My trader instinct says the following and I announced this in the membership group yesterday you buy the rumor and you sell the news. I think there's been a lot of hype behind the scenes about what they're going to do. That's the rumor. That's when you buy the news itself. I'm not convinced. I don't think this is a real game changer. And here's the thing. The people that likely qualify in the cities that likely qualify they're probably doing quite well in the first place. So I'm not sure it's going to increase a lot of revenue for them. A lot of bookings are probably pretty full in the first place. And I did hear something that I want to caution everyone about.
One of the things that Brian said about this Air B and B plus thing was the average price per night is less than 250 dollars a night. But there is seemingly nice I mean look at these.
That to me sounds like pricing pressure is that one of the qualifications is that how they pick cities is that how they pick homes. Because as an entrepreneur and a real estate landlord I want pricing power. I want to command as much money as I can. I want to deliver great value and a great experience. But am I going to lower my prices just that I've become part of the Plus program. I mean I would rather have 270 nights occupied at the right clearing price as the market dictates versus trying to lower my price and be full 365 days doing that much more work and wear and tear and cleaning and human resource issues of my cleaning crew and neighbors and all of that for a lower price just to be part of this program. Again it's just rolling out I know it's live now but we have no data points. So I reserve the right to change my opinion. I think it's a really good idea. I think implementing it is really challenging. I think the scale is going to be virtually impossible. And you know I ran a company that was monitored by the Department of Transportation. I can tell you on certain days there were certain people that would come and inspect the buses that were qualified and fair. And then on other days they were maybe grumpy and not so fair and an infraction on our business could hurt our business that could hurt our income our livelihood.
So I don't love the fact that there's now this like Big Brother authoritarian mechanism in place in what was previously an open platform where people could come and do what they wanted as they wanted. Charge fair price and it was just reviews based here B. Now is injecting themselves if you will as the authority on what a proper Air B and B plus looks like feels like is graded and so on and. If they do it well it's great if they don't do it well then perhaps that's abusive. Imagine if YouTube told me that I needed certain lighting and certain sound and blah blah blah blah blah. And started to change my content. That wouldn't feel quite right don't want to scare anyone. Overall I think it's a plus plus. I think it's going to win but I don't think I'm going to hold my breath or think it's like nothing but good. There is some potential downside here. And the fifth and final thing that Brian spoke about yesterday is called Beyond Airbnb beyond the purchased luxury retreats which is a very high end purveyor of high end homes villas chalets palaces you name it experiences really. And now they're going to roll it out mainstream and I think that's fantastic. There's another competitor called one fine stay. And I think there's definitely demand in this area. I think there's a lot of opportunity. I think it's challenging and the reason is people that are looking for this sort of experience and are willing to pay this much money generally want their handheld a little bit more in the form of travel agents or people that have like done and experience this stuff.
And at some point maybe in five years or in ten years the platform will work better. I have a property that's currently listed on one fine day and they have a sales team. So when somebody makes an inquiry they actually talk to them and walk them through and so on and so forth. So even though the Web site in the platform might be a great place to begin the conversation I'm not sure how much business is actually conducted just solely on the platform itself but I'm sure in the future there will be more videos and diagrams and knowledge and robust experience share and so on and we'll get to that place. But today I think it's an early stage. I think it's a great concept. I think there's a lot of people that have a lot of these tremendous properties all over the world. I think it's a great addition and I think it's something to watch over a go forward basis. I may even experiment with it myself. So in conclusion I applaud Airbnb. They're doing the right things as the company is maturing and growing. There were 30 some odd billion dollars of the largest and fastest growing hotel company in the world. They need to do some of these things.
I think it's very challenging. I think focusing on the guest experience and now the hosting experience is tremendous. I think it's a baby step. I think there's a lot of room for improvement. We're going to be paying attention to them. And if I could ask FBN to focus a little bit more on the host experience and what makes us profitable will help us grow our businesses. We'll come full circle to them. It will help them grow their business. I'd love to hear your comments and your thoughts about the announcement yesterday. What excites you what scares you. What am I missing. Tell us what's going on. Come check out our facebook group. There's a lot of people that are involved in the pilot program. I'm eager and excited to see what they say. How did that 100 point checklist go. How did the photography go. How long was the wait. What did they see in terms of conversions and bookings and so on. So that's a great place if you're not in one of those 13 cities but you want to stay tuned. Join our facebook group and in the meantime we're going to continue to update this as I evolve my thinking and learn more about all of this stuff here on our the youtube channel so go ahead and subscribe. I really appreciate that and the best way to know is click on the little bells to get notified and in the meantime I'm going to wish you nothing but
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