Jed Kelly: Thank you.
Operator: We’ll go next to Douglas Anmuth at JP Morgan.
Douglas Anmuth: Hey, this is [indiscernible].. Thanks for taking the question, but I have two. So first one through this affordability. Are you actually seeing that consumers are coming to your platform seeing that the prices are high and walking away and do you feel like that’s an opportunity that you guys aren’t capturing? Or is it just the case that people are okay with higher prices on the platform right now? And the second thing on the other side for the full year, where does it see the outside to raise your point?
Brian Chesky: I don’t, we’re not able to hear the second question. I don’t think. Can you say one more time?
Douglas Anmuth: Yes, sorry, on your full year guidance for adjusted EBITDA where did you see upside to give you the confidence to raise it?
Brian Chesky: Yes, so I’ll take the first question and I’ll hand over to Dave. On affordability, our prices have, have obviously risen since pre-pandemic and the growth has been incredible in the business is nearly about twice the size that was pre-pandemic. That being said, in the long run, Airbnb started as an affordable alternative to hotels. And I think that we always have to remember that for every dollar people spend on Airbnb, they spend as much as many as $10 in the world on hotels. So we’re still a very small player in a very large market. And I think that one of our big opportunities is to make sure we continue to be affordable. Last year, we got a lot of feedback from the community that Airbnb wasn’t as affordable as it used to be.
So we made a bunch of changes. We highlighted some of these in my opening remarks. What we’ve seen though, since then, I’ll answer your question. People, the book prices on Airbnb, on average, are lower than the listed prices. So we do see people gravitating towards more affordable stays listed in Airbnb. It’s partly why we launched a feature called similar listings, which help us see the listings that we’re getting booked. And what hosts I think discovered was the most popular listings that made the most money offered many times the very best value. And so this was, in a sense, a win-win for guests in the house by really trying to build better tools. I also just want to point out one thing, which is our prices are essentially flat year by year.
I think they’re about 1% up year-over-year, but in North America, our prices are now down 1%. Now, when you take out mixed shifts, because people are booking larger homes, our prices in North America are actually down 4%. And if you compare it to hotels, depending upon which data you take, hotels are up some between 4% or as much as 10%. And it seems like hotels are suggesting, based on some of the public remarks, that they aren’t going to come down. In fact, those prices might come up. So to answer your question, I think people come to Airbnb for one of the kindspaces at great value. And if we can keep prices very affordable, and then also focus on reliability, I think there’s going to be a lot of demand to come.
David Stephenson: And then in terms of profitability, I’m just really proud of our continued progress of increasing our overall margins over time. We made some hard choices in the midst of COVID to reduce our fixed costs, get back to the core, and focus on our overall profitability. The major shifts of things like our marketing expenses that we just talked about, where 90% of our traffic remains direct or unpaid, it gives us a lot of leverage for improving our overall profitability. And we’re going to continue to do that this year. We continue to make great improvements in our overall variable costs, things like operations and support costs, or community support, infrastructure costs, etc. And then we’ve just been doing an excellent job of being very judicious with our fixed cost growth.
So we’ve moderated our headcount growth overall. We’re growing modestly, and we’re investing behind the things that matter most for our guest center hosts. And I think that focus is actually enabling us to deliver even more innovations, as Brian talked about on the call, like, and we’ve had over 500 improvements to Airbnb in the last several years. And so we’re going to continue to manage our fixed costs closely, focusing on the things that matter. So for the back half of the year, we feel confident we’re going to be able to exceed our EBITDA margins over the prior year.
Brian Chesky: And I think I’ll just add that, I think that we found that as we get more efficient, we actually grow faster. So I think being incredibly disciplined, incredibly focused, incredibly lean has actually been great for growth.
