Since we launched that product in November, we are seeing a shift in bookings towards Guest Favorites. That’s of course good because number one, they get fewer customer service contacts, so customer service costs go down, they have this higher five star rating trips, so we have better repeat bookings. And we think this will attract people to Airbnb that never considered us before. So those are just some of the things we’re doing. The last thing I’ll say before I hand it over to Dave, is that, that’s just what we did last year. We had 200 – about 200 upgrades last year, 430 in the last 3 years, but we are just getting started, and we’re going to have significantly larger upgrades this year. Dave?
David Stephenson: In terms of the Q1 guide on room nights growth, again, I think you have to remember that we have a hard comp versus Q1 of ’23, where there was a lot of pent-up demand coming out of the holidays and we saw much stronger growth in early in the year, especially in January. I think the other thing that’s unusual about Q1 this year is Easter moved from Q2 to Q1. So this actually helps our revenue by 100 to 200 basis points in Q1, but actually is a drag on nights because we actually get fewer nights booked in the period as people are actually doing the traveling on holiday. So it will shift some nights from Q1 to Q2. So revenue is a little bit helped Q2 to Q1 and bookings nights booked are slightly hurt Q1 to Q2 and then don’t forget the hard comp. So this is why we have the language of moderating from 12% growth in Q4.
Operator: Your next question comes from the line of Doug Anmuth from JPMorgan. Your line is open.
Doug Anmuth: Thanks so much for taking the question, Ellie, can you just help us understand the commentary on EBITDA a little bit better for ’24 or the incremental investments that could drag on the margins. Is that primarily about expanding beyond the core and tied to some of the new initiatives that Brian talked about that we’ll learn about later this year? Or is that more around marketing or just something around kind of the existing business? Thanks.
Ellie Mertz: Thanks, Doug. I was actually going to start next quarter, but thanks for pointing it to me. So what you saw in the guidance language that we provided is that we are basically giving ourselves a floor in terms of the 4 year [ph] EBITDA margin guidance. As we said, we will hold or provide a minimum of 35%, which is slightly down from what we delivered in 2023. The intent here is really to ensure that we have flexibility over the course of the year to continue to invest in a variety of growth opportunities as they appear. So what might those be? So first, we have a pretty robust budget in terms of our international expansion, but there’s certainly opportunities at the margin to continue to invest in newer markets. Second, there’s always opportunities in terms of looking at our high ROI marketing channels and adding marginally at the top.
Third, what we note, given the ambitions around our product development road map is that obviously often constrained by our resources there. And so we may look to add incremental product resources to increase the throughput of our overall product team. And then finally, obviously, we haven’t said much with regard to what the platform extensions will look like in the back of the year, but we also want to give ourselves flexibility there to ensure that we’re able to share something broadly and meaningful by the end of the year.
Operator: Your next question comes from the line of Justin Post from Bank of America. Your line is open.
Justin Post: Great, thank you. Just want to ask about room nights. We all know there’s a tough comp in Q1, but – and that was partially due to the reopening. But we’re kind of over COVID now. And just kind of thinking about where you are in the room night cycle going forward? And what are the key drivers for nights? Is it growing supply and just getting that conversion level better. The big picture just saying, it looks like a tough comp in Q1, but how do you think about the rest of the year and where nights can grow over the medium term? Thank you.
David Stephenson: Yes. Again, we are starting to see overall kind of demand normalize. I think you also look at our nights growth and the nights on Airbnb and to continue to see that we take share of overall accommodations globally versus kind of traditional accommodations and are either equaling or exceeding versus our key competition. So I think if you just look at room nights growth, we continue to see strength relative to traditional hospitality and our competition. And you’re exactly right. The key focus is on supply. There’s been a lot of critique around whether or not we have sufficient supply growth. I hope that we continue to show that strength with the 7.7 million active listings, they’re growing 18% year-over-year.
We saw incredible strength throughout the year, 5 million hosts. The vast majority of this listings being unique to Airbnb. And I think that, that uniqueness also gives us a lot of strength on, as you say, conversion and a lot of things that Brian talked about, in terms of perfecting price, making it easier to shop and find the right home for each guest is incredibly important. So perfecting the core service is there. And then the last piece, which we’ve also talked about is just finding the areas where we are underpenetrated relative to where the opportunity is. And I think that’s the vast majority of countries around the world. And when we make sure to apply a product view, a marketing view, as supply view in a targeted way in each country, we’re unlocking incremental growth.
And that’s what we’ve seen why Brazil has nearly doubled since 2019. So yes, it’s supply, it’s product, it’s full funnel marketing, and it’s doubling down in underpenetrated countries.
Operator: Your next question comes from the line of Kevin Kopelman from TD Cowen. Your line is open.
Kevin Kopelman: Thanks so much. I had a follow up on the margin question. Could you give any more color on your kind of initial thinking for the year on growing headcount and also how you’re thinking about the marketing plan to support the growth initiatives that you talked about?
Brian Chesky: Yes. In terms of headcount, we grew headcount last year about 1%. We’re planning to grow at maybe slightly more than that. It could be kind of mid single digits, low to mid single-digit percent. As kind of Ellie mentioned, I think we will see depending on what our product development needs are, but it’s not going to be above overall kind of revenue growth. And then in terms of marketing, margin, we’re going to keep marketing costs as a percentage of revenue largely the same as what it was in 2023. In some ways, we probably could see additional leverage on marketing, but what we’ve seen is such great success with our brand marketing efforts in our core markets. We’re actually expanding to 20 countries around the world.
So that’s already included in this. And then we’ll see as there are other investments to support the newer business areas. But to the extent that there may be any incremental marketing, it’s not going to be a materially larger percentage of revenue than it was last year.
Operator: Your next question comes from the line of Lee Horowitz from Deutsche Bank. Your line is open.
Lee Horowitz: Hi. Can you maybe spend some time talking through sort of the competitive dynamics and your expectations for the competitive set in the U.S. in 2024, particularly as some of your larger competitors look to lean into share gains. Are any of these investments aimed at holding share or any of this type of investments sort of aimed at defending share against a more competitive environment? Thanks so much.
David Stephenson: Yes, we’re going to continue to do what we’re doing well, which is have unique supply that is outgrowing any of our competitors. And I think that by having that, we were able to drive kind of incremental nights and take share from both traditional hospitality and our competitors. I know competitors are trying to come in to North America and take – try to take additional share. It’s not what we’re seeing. We’re not seeing success there. We’re seeing that a lot of the competition is focused on professional host supply, which is undifferentiated and often cross listed. And I think the differentiated supply that we were able to bring on has been a material kind of net benefit to us. So that’s where the strength we’re seeing.
Brian Chesky: And I’ll just add that, we have a lot of competition for people choosing places to stay. Our main competition are hotels, first of all. And we’re so much smaller than hotels. For everyone who stays at Airbnb, nine people stay in a hotel. So I think the bigger opportunities for us to take market share, because again, all you need is one of them to come to Airbnb and we’ve now doubled the size of our business. I think we are only scratching the surface. We grew in every region. We maintained or grew share in every region. As Dave said, we have – we are the brand in this category, a noun and a verb used all over the world. We are the only ones with a custom built platform. And we’re going to continue to strengthen our advantages, including like Guest Favorites, the only one to offer that.
The only one to offer custom built tools on the host side. So the best game we can play is to continue to focus on executing ruthlessly. And if we continue to do that, we’re going to continue to take share.
Operator: Your next question comes from the line of Jed Kelly from Oppenheimer. Your line is open.
Jed Kelly: Hey, great. Thanks for taking my question. Just a couple – just one. Can you talk about how we think – we should think about demand and supply starting to converge? I know you’ve had great supply growth up 18%. Should we start to see room nights catch up to that demand? And then can you just give us an update on the how for the U.S. short-term rental market, how you’re thinking about that going into this year after what was the softness in a lot of those core vacation rental destinations last year? Thanks.
Brian Chesky: Yes. So why don’t I just start, Jed, I’m talking about supply growth, and I’ll let Dave answer the rest. I believe in the long run that supply growth is a long-term indication of growth in Airbnb. And it’s been healthy since we started the company, but you’ll know that during the pandemic, one of the biggest questions I got asked when supply growth stops is how we’re going to restart supply growth. The great thing about our supply growth is that most of it comes organic to us. In fact, 36% of our new hosts are prior guests. That’s the highest that number it’s ever been. And the reason people host is because their friends typically tell them about it. The last year – actually, the year before, we actually began and we really put the throttle on it last year, a new strategic priority to mainstream hosting.
