Maybe some hotels are booked 30 days a month. Most hosts are not booked most nights. And so the big deal is that they lower the price just a little bit. They will add more bookings, more nights and they’ll end up making more money. There’s a point where they lower it so much though that it’s no longer worth their while. And that is the secret sauce for us to be able to perfectly balance supply and demand to make sure that both sides it’s working for them. And I think that equilibrium, that balance between guests and hosts, that kind of is one of our secret sauces.
James Lee: Thank you.
Operator: And next we’ll move to Tom Champion at Piper Sandler.
Tom Champion: Hi, good afternoon. Looks like you’ve built some tools to stimulate or offer long-term stays. And I’m just curious what you think that will ultimately do to the rate, which is kind of hovered around the 18% rate for room nights to the last couple quarters now. Where do you see that going over time? And then Dave, I guess a question for you. Another very strong quarter for EBITDA margins. What do you see the long-term margin potential of the business over time? Just curious if you’ve updated that. Thank you.
Brian Chesky: Hey Tom, I’ll take the first one. So long-term stays are 18% of our nights book. Long-term stays obviously defined by a month or longer. And as I mentioned before, they were around 13% before the pandemic. Now, it’s very hard to predict exactly how it will change in the next one, two, three, four quarters from now. So I’m not going to make a prediction about where 18% might be in Q4 or next Q1. But what I can say with a fair amount of confidence is I think in the next decade, it’s going to be a lot higher than 18%. I think the overall wins are towards longer and longer stays. And the reason why is because more than ever in any time in human history, you’ve got hundreds of millions of people and one day, perhaps more than a billion people that have a job via laptop that has some incremental flexibility that did not exist 10 or 20 years ago.
Think about the number of people that are young that don’t have a family and can actually work from a laptop and move around. Then you have people of families that have kids in school that can’t do that, but their kids aren’t in school in the summer. So you’re going to see more and more people still go away from the summer. Many people are thinking about going away for the winter. People are moving away from headquarters, but they might come back, give a work for extended periods. So I think this basic thing we think is going to happen is there’s going to be a lot more flexibility in the future. And I think there’s going to be a category that is not travel and it’s not classic housing, housing as in one year leases or real estate. There’s going to be a category in between.
And it doesn’t even really have a name, but our stays of 30 days are longer. I mean, that is around 100 million nights booked a year. So that is actually a major new category of business that didn’t really exist in a meaningful way when we started Airbnb. And if anyone in the world wants to book a stay of a month or longer, and they’re going to book site on scene, so they’re going to book a place they can’t visit and do a tour ahead of time, I think Airbnb is going to be the leading place to do. And there really isn’t another global player that you can do with this. So ultimately, I can’t predict the short term, but the long term, we’re very bullish. And we actually have a lot more features and upgrades in this area of monthly stays that I think will increase adoption.
And also to be able to get people that only want to host on a monthly basis to come on Airbnb, that would actually unlock lots of new listings. Dave, I’ll hand over to you.
David Stephenson: Yes, thanks for the question, EBITDA margins I am really proud of our progress towards it. We’ve made some substantial progress based on things like the change in our marketing approach, improvements in variable costs or fixed cost leverage. Also remember that the higher average daily rates have helped our overall margins and kind of accelerated overall profitability. That said, we are in growth mode. I’m really not focused on optimizing margins. I’m proud of the fact that we can grow well and drive great profitable growth, but we are focused on growth. I think the extent that we’ll expand our margins over time, I think the biggest opportunity to be with some of the services that Brian mentioned earlier in the call, as we add guests to our host services, I think that will increase the lovers of revenue that we can gain and much of that revenue will flow through to kind of higher overall profitability.
