Ellie Mertz: Yes, so Jed, to your question with regard to the relative growth rates of supply and demand, just a few comments. I would say first, something that we’ve shared previously is that in any given quarter, we would not expect supply and demand to grow exactly in line. But when we look over a longer time period, either the last decade or more specifically from pre-pandemic to today, what we do see is that over a period of years, they do grow generally in line. And I would say that continues to be the case. Where we are right now, I would say we’re very encouraged to be able to deliver this continued level of very strong supply growth for a couple of reasons. I would say one, we know that more unique, differentiated supply wins and differentiated supply is why people come to Airbnb.
I would say second, and Brian made this point, but growing supply allows us to, it really benefits our affordability measures in that more supply obviously but gets more competitive pricing. And then I would say third, relevant to our recent quality initiatives, we see it as an opportunity for, as supply growth is stronger than demand growth, for us to continue to be driving quality. What you saw in the quarters, we obviously did some one-time takedowns of supply that frankly just did not meet our community’s expectations. And the fact that supply is growing so rapidly, it allows us to make those cuts, if you will, to the supply base and to be continually upgrading the level of quality that we deliver to our guests.
Jed Kelly: Thank you.
Operator: Your next question comes from the line of Ron Josey with Citi. Please go ahead.
Ron Josey: Great, thanks for taking the question. Brian, I wanted to ask you about search on Airbnb, just following the strength and the benefits of guest favorites. I wanted to better understand sort of, talk to us about post-guest favorites, how search and really conversion rates have improved and really how you feel search can just evolve over time. And then as a follow-up to what we were just talking about around inventory quality, we’d love to hear just the process to ensure that quality listings continue to come on the platform. I think we’ve talked about verified listings and trophies, but any other thoughts there would be helpful. Thank you.
Brian Chesky: Oh yes, Ron. These are really, really good questions, Ron. So yes, let’s start with search. So, we did approximately $10 billion last year in revenue. So the way to think about this is if we can just drive an incremental 100 basis points in growth, that’s $100 million. So like the way we look at our conversion rate is like we have teams dedicated to the search experience. And we, over the last year, we, the last 12 months, we’ve likely driven at least a few 100 basis points of incremental growth just through optimizations of the search flow, because we just get so much traffic. And so just to call out a couple of things that we did, I mean, there’s been dozens of dozens, I’ll just name a couple. One I already mentioned, mobile app downloads.
Now, why do mobile app downloads lead to also more bookings? Because the conversion rate on a native application is typically a lot higher than a mobile website. Number two, just to give you a couple of examples, one of the challenges of Airbnb compared to a hotel is you may type in a location and certain dates and maybe you’re on vacation and you don’t see exactly the home you need and you might not book a home. You might now open a different app. And we have this carousel that basically offers, hey, if you change your dates by one or two days, here are other listings you can find. And that led to a huge increase in booking. We made improvements to filters. We’ve made improvements to search input, the search box, making the search box more prominent.
So there are quite literally dozens and dozens of improvements that we’ve made. And I see hundreds of basis points of incremental growth just through essentially optimizing the end-to-end guest flow for our core business. So it’s really, really exciting. And a couple of big areas would be maps and location. There’s a huge opportunity around that area. So that’s on search. On inventory and quality, this is a great question. I mean, we have a really extensive roadmap. Last year we launched guest favorites, as you know. In November, 100 million nights booked have been booked through them. I would say the response to guest favorites has even been greater than I anticipated. We’re seeing more people not only book guest favorites, but we’re seeing that guest favorites have a fraction of the trip issue and contact rate as non-guest favorites.
So guest favorites have between a fifth and a 10th the contact rate as our bottom quartile of listings. And the rebooking rates are much higher. And I also think what Guest Favorites is doing is it’s changing behavior to encourage more hosts to become better. And so after that we launched quality highlights in March. Quality highlights, basically what happened was Guest Favorites was the top 2 million listings in Airbnb. But a bunch of people were saying, well how do we know which are the best within those 2 million? So what we did is we have a top 1%, top 5%, and top 10% trophy classification. And this is also really I think popular with guests. We’ve now removed hundreds of thousands of listings. And we are going to be doing a number of new things.
One of the things we are experimenting with is showing to percentile where something falls in a quality distribution as a percentile basis. And then continually adding a lot more supply, and then tightening up our quality control, and really giving a lot more feedback to hosts to become better. I think that a really good opportunity here is to get a lot more listings in Guest Favorites, and to provide host education, host tools for the hosts that are struggling to be much more successful. So there’s a pretty big and extensive roadmap to go. And just the last thing I’ll say about this is, as big as Airbnb is, and we are approaching half a billion room nights a year, for everyone who stays in Airbnb, somewhere around 8 or 9 people stay in hotels.
And when you ask people, why are you staying in a hotel? Airbnb is typically more affordable. It’s a more local experience. It’s much better for groups and families. People say yes, but hotels are historically a more consistent experience. And so if we can just get one of those travelers from hotels to stay in Airbnb, that would double the size of our business to a billion nights a year. And so we think quality and reliability is a multi-year roadmap. So you’re going to be hearing every year major updates from us on quality and reliability.
Ron Josey: Thank you, Brian. Super helpful.
Operator: Your next question comes from the line of Eric Sheridan with Goldman Sachs. Please go ahead.
Eric Sheridan: Thanks so much for taking the question. Maybe coming back and putting a finer point on some of the topics we’ve talked about already, Brian. When you think about your top investment priorities for 2024 and beyond, how would you categorize those investments if we put them in buckets such as demand generation, supply growth, and platform and product innovation over the long-term? And in that last bucket, how should we increasingly think about what you’re learning about testing and deploying AI across the platform and how it might reduce friction over the longer term? Thanks so much.
Brian Chesky: Hey, Eric. Good to hear from you. So maybe I can just – you had three buckets. Maybe I can give you three slightly different buckets to give you our framework. The way I think about deploying our resources – and when I say resources, probably the most precious resources we have is product and engineering resources. And the way I think about that is we have our core business, we have international expansion, and we have expanding our core business of accommodation. So that’s kind of the way we think about our portfolio. And you can imagine they’re all totally different horizons. So the majority of our people are still focused on the core business. And I believe that we are just scratching the surface of the size of our core business.
Within our core business, we typically have about three different areas of focus. One I just talked about, which is quality and reliability. The next one is affordability, making sure Airbnbs are more affordable hotels. And the third is usability, what I also talked about with search and reducing friction. So that’s the first bucket of our investment. And that really will pay off within this year. And so there’s – you can get a return on those efforts within a matter of months, because a lot of that – a lot of those changes are software changes. They’re immediate. They touch 100% of our user base. And they touch a very large base, our entire GBV. Next is international expansion. International expansion is really supply, demand, and platform.
It’s all three within international. And you can really bucket into two things. We have to localize the product, and then we have to have a global marketing strategy to go one market at a time. And we’ve done a lot of really good work over the last few years on international expansion. But I think at this moment, we are ready to step on the gas. And by stepping on the gas, I don’t mean it’s going to be a significantly greater investment, but a much greater velocity, because we spend a lot of energy updating our products. So most recently, we just – we just updated our application in Asia, specifically in China. And we’re bringing a lot of those improvements to Japan and Korea, because the applications work fairly similarly. And so getting these products onto a better standard is a really good first thing that you want to do before you actually step on the gas for marketing.
