So that’s international. And of course, the final thing is expanding the inter-corporate business accommodation. So from dollars and number of people, this is by far the smallest area that we’re putting people on now, because it’s a small base. But it’s actually where I’m spending the majority of my time. And I think the majority of the leadership’s time is now being spent focused on transforming the company from an accommodations business to a multi-vertical or multi-category company. And over the next three years, you’re going to see this play out quite substantially. So that’s the way we think about it, core, international, and then expanding beyond our core.
Eric Sheridan: Great. Thank you.
Brian Chesky: And then I think the other question, sorry, I have to answer the question about how are you, what are we learning about AI and reducing friction? So just a couple of things in AI. First of all, like, we’ve been using AI for a long time. In the last 12 months, we’ve made a lot of progress. I’ll just give you three examples of things we’ve done with AI. We’ve made it easier to host. We have a computer vision model that we trained in 100 million photos, and that allows hosts to, like the AI model, to organize all their photos by room. Why would you want to do this? Because this increases conversion rate when you do this. Number two, we launched last week AI-powered quick replies for hosts. So it basically predicts the right kind of question or answer for a host to pre-generate to provide to guests.
And this has been really helpful. And then we’ve made a really big impact on reducing partisan Airbnb with our reservation screening technology. So now we’re going much bigger on generative AI. I think we’re going to see, I think we’re going to see the biggest impact is going to be on, customer service in the near term. I think more than hotels, probably even more than OTA, Airbnb will benefit from generative AI. And the reason why is just a simple structural reason. We have the most, like, varied inventory. We don’t have any SKUs. And we’re an incredibly global platform. So it’s a very difficult customer service challenge. But imagine an AI agent that can actually, like, read a corpus of a thousand pages of policies and be able to help adjudicate and help a customer service agent help a guest from Germany staying with a host in Japan.
It’s a very difficult problem and AI can really supplement. Over time, we’re going to bring the AI capabilities from customer service to search and to the broader experience. And the end game is to provide basically an AI-powered concierge. So that’s where it’s going. But it’s really focused on customer service at this very moment.
Operator: Your next question will come from the line of Brian Nowak with Morgan Stanley. Please go ahead.
Brian Nowak: Thanks for taking my questions. I have two just to sort of come back to a couple of the topics we talked about. The comp did get easier. So with the comps getting modestly harder in the back half, can you just sort of walk us through maybe micro levels of innovation that can sort of drive stability? Or how do we think about reasonable ranges of outcomes for room-night growth in the second half? And then the second one, you know, Brian, you talked about how like-for-like pricing is more attractive versus hotels. I don’t have the transcript exactly yet. But if I look at Marriott and Hilton and their ADRs are up 2% to 3% and your ADRs are also up 2% to 3%, is there something else that you’re seeing where the relative pricing is actually becoming more attractive that you can help us understand a little bit more? Thanks.
Brian Chesky: Yes. Why don’t I take the second question? And I think, Brian, either you or I cut out. We didn’t hear the first part of your question.
Brian Nowak: So do you want to just repeat the first question? Yes. Yes, absolutely. The first question was more for Ellie, where she has – you talked about how you have stable room-night growth now, but I think the comp is a little bit easier from 1Q to 2Q. And with the comps getting a little more difficult in the back half, can you just sort of walk us through some reasonable ranges of outcomes of growth in the back half and maybe micro-level drivers to kind of keep the stability versus drive deceleration?
Brian Chesky: Ellie, you want to take the first one, and I’ll take the second one?
Ellie Mertz: Yes. So I think you were right in terms of the thinking was that the comparison in Q2 would be a little bit softer. I think what we’ve seen so far, just to repeat what I said previously, is that, yes, it was clear that there was a hard comp in January. Since then, we’ve seen, I would just say, a general stability. We are not so far this year seeing the same level of volatility that we saw in 2023 in terms of either movement of lead times or consumer, I would say, hesitancy to book during kind of macro dislocation. So general statement is that, year-to-date, just the trends have been stable, and that’s what our Q2 reflects. In terms of the back half of the year, I would say – I don’t know if I would characterize the back half of the year as harder comps.
I think if you recall, actually, some of the volatility that we and others saw in the back half of the year, there was a bit of a moment of dislocation end of summer heading into October, and in particular, in the month of October related to the conflict breaking out in Israel. So I wouldn’t necessarily characterize the back half of the year as being a harder comp. Instead, I think if you think through the growth initiatives that Brian talked about in terms of thinking about where our portfolio of investments lie, I would say we are optimistic that a lot of the core optimizations could have near-term impact as well as the international investments. So those are the places where we’re really looking to drive in-year growth above where we are today.
Brian Chesky: And Brian, I’ll take the like-for-like question. So specifically, the data we’re citing is global like-for-like basis. So what we’re comparing is the average price of a global hotel room to a one-bedroom listing on Airbnb in March. And in March, our prices were down 2% and hotel prices were up 3%. So our prices were, again, one-bedroom globally on Airbnb in March was $114, down 2%. Hotels were $148, up 3%. So that’s what we’re talking about, one-bedroom global. When our ADRs move, obviously the other thing to take into consideration is mix shift. Oftentimes our ADRs do go up because people increasingly, more and more of our travel is group travel. 81% of our trips now have two or more guests and increasingly we’re seeing people booking more space, larger homes, just as travel’s mixing towards larger groups.
Brian Nowak: That’s helpful. Thank you both.
Ellie Mertz: And Brian, that was particularly the case in North America this quarter. On an absolute basis, ADRs were up, but if you exclude the impact of mix, they were flat.
Brian Nowak: Oh, okay. Great. Thank you both.
Operator: Your next question will come from the line of James Lee with Mizuho. Please go ahead.
James Lee: Great. Thanks for taking my question. And just want to follow up the prior question on supply and demand growth. And in other segments of the gig economy services, they seem to benefit when supply exceeding demand. So if you think about, ride sharing and food delivery, because they drive prices down and therefore increasing consumer demand. Should we, think about it in the same path for home accommodation? Are you thinking, expecting maybe a similar trend for your business as well? Thanks.
Ellie Mertz: I would say generally speaking, when we see growth in supply, it is additive to demand. It means that, when people are searching for a particular night in a particular city, if we have more that we can provide them, it is obviously net beneficial. I think I would just, repeat the prior comments that we don’t always see kind of in period equivalence by market in terms of the respective growth rates. And that I would say that, there’s a primary difference in terms of our business model relative to some of the others that you mentioned in that the frequency of the activity is simply lower and the lead time is also much longer.
James Lee: Great, thank you.
Operator: Your next question comes from the line of Stephen Ju with UBS. Please go ahead.
Stephen Ju: Okay, thank you so much. So Brian, would we be overreaching if we were to think that Icons is a leading indicator of what should be, I guess, a revitalization or re-imagining of experiences? So, maybe the overnight stay in the [Indiscernible] generates all the media and consumer attention, but maybe this affords you the opportunity to expose the users you’re getting to the more everyday experiences. And also secondarily, you’ve talked about this and the letter talks about this also, the Olympics and the Euro’s bump, and there’s going to be travelers who are probably not sports fans and who might want to be avoiding Paris and the host cities in Germany altogether. So, is there anything you can share in terms of how additive these two events may be? Thanks.
