Airbnb, Inc. (NASDAQ:ABNB) Q2 2023 Earnings Call Transcript

I think we could do a very good job at it. It is not one of the most perishable opportunities. It’s just why we haven’t prioritized it. We’re really prioritizing getting Airbnb to as much scale as possible and continue to grow. So, but it is absolutely on the table. And just to dive in this a little bit deeper, there is such an opportunity for us to build differentiated tools, services, and offerings for hosts. You think about it, over the last few years, we made, as Dave referenced, almost over 500 upgrades in innovation. Probably around half of those happened for hosts, literally hundreds of improvements. And most of these we don’t charge for. They have nothing to do with our take rate. Our take rate was what it was even before all these, like air cover, which is top to bottom protection with $3 million of damage protection.

That is free to our hosts and our competitors don’t offer it. I do think though, while we always want to make sure we’re providing more value for hosts for whatever we’re charging, there’s a lot of opportunities. Obviously an advertising platform is one, matching people with homes that need, that don’t have time to host with hosts who can host but don’t have a home, really matching that marketplace. But I think a lot more, a lot more business that we call them co-hosts, so creating a co-host marketplace is really interesting. And there’s a plethora of other services on the host side. And again, there’s also a plethora of services on the guest side as well. So those, for things that make the experience better, I would say would be more perishable.

With regards to Germany and Brazil, I can have Dave just talk about it in a second. But before I do, I’ll just say that, we are, I think the most international travel company in the world, we are not concentrating Europe. We’re not concentrating North America. We’re truly everywhere. We’re in almost every country and region in the world. It’s truly a global travel network. And I think we have a really good playbook for how to expand into these markets. And I think Germany and Brazil was a really interesting playbook where we didn’t just focus on brand, but we also focus on PR, social media. We leverage like local celebrities that often will do promotions with Airbnb. And so there’s a, and this is, in addition to localizing our product and really making sure we have a key product and we have good supply in the corridors that these people will travel to.

I think Germany and Brazil are good stories. Germany is more than 60% larger than it was before the pandemic. I believe Brazil is like 110% larger. I don’t know if Dave, you want to go into anything else?

Brian Chesky: I think you hit it. Well, I’ll just reinforce a couple of things. I mean, step one in 80s markets is make sure that we well localized the product. Usually the product can be very consistent globally, but often payment methods are areas where we need to make sure that we’re being very localized. And then this full funnel approach is key. Making sure that we have all of the elements, social, NPR, celebrity and brand and search engine marketing. We often start in some of these markets with just the search engine marketing, but that’s too narrow and we need the full funnel to see the effect. And I think when we have that full funnel approach, you get the results that we’re seeing in Brazil and Germany. That’s why we’re expanding that on to Asia for both like Japan and South Korea.

And then I’ll even go back to the potential initiatives for loan because I think it’s important to double click on the fact that you have to remember that the majority of our hosts are individual hosts and the things that we need to build are for those individuals So for example, adding advertising, we have to be mindful that we don’t just add something like that that can disproportionately benefit professional hosts over individuals and take the balance of the marketplace out of balance. And I think it’s really important to do that because that’s what’s unique and different about Airbnb. We’re not built on the backs of professional hosts. We’re glad they’re there. We’re glad they’re part of the ecosystem, but it’s even more important that we support our individual host community.

Unidentified Analyst: Great, thank you.

Operator: We’ll go next to Brian Nowak at Morgan Stanley.

Brian Nowak: Thanks for taking my question out. Dave, just to go back to earlier question on ADRs being up in 3Q, I get geographic size location, it’s better, but could you just give us a little more detail about that so we can understand sort of is that geographic comp structure? What are the sizes you’re talking about? We’re just trying to understand how to think about the drivers of the ADR growth in the third quarter and the durability of that growth into next year.