Brian Chesky reveals Airbnb's massive services expansion: groceries, car rentals, airport pickups, and boutique hotels

Montana on the show.

Fantastic. He's got to be pretty excited for this upcoming round of IPOs,

data center buildouts,

a lot of

I don't know.

Anyway,

lot of those IPO.

We can come back to the land the land strategies uh because we have our next guest here, Brian Chesy from Airbnb back on the show. Only a few weeks since we talked to you last. Welcome back. Thank you so much for taking the time. How are you doing? Hey guys, how you doing? Good to be here again.

Great to see you. We're not in I'd be better if we were in a blimp right now.

It'd be better if we were in a blimp, but we're one show closer to hanging out on a blimp together. Uh give us the update. What's going on in Airbnb world?

So, we announced a few things. Uh the first thing we announced is a whole bunch of new services. Um probably starting with grocery delivery. Uh a lot of people love that Airbnbs have kitchens. So, now when you book an Airbnb, you can have groceries waiting for you in Airbnb. A number of people tell us that if you go to Rome, it's hard to get an Uber. So now there's going to be somebody that can welcome you at the airport and pick you up and take you to Airbnb. We also announced finally car rentals. A long time coming. And so now you can get a car rental on Airbnb. Um and we also announced that we have now boutique and independent hotels. If you book a boutique or independent hotel, we are get creating a price match guarantee. Mhm.

So if you see a lower price anywhere else, we will give you the difference back in credit and we'll give you another 15% towards the next booking of anything on Airbnb. So those are just a few of the things that we announced. Really the basic idea is just continually listen to customers, continue to listen to our guests, listen to our hosts, and just keep expanding and perfecting the service and trying to make our be a bit of an ecosystem of other developers and other apps. Yeah, this feels like uh the the fruition coming to reality of like a lot of the pitch that you gave last year. Uh what was involved in actually getting to this point? How much of this is predicated on uh new software development, new product initiatives versus partnerships with existing areas? Like a lot of these feel like they touch the real world. So it's not just an extra line of code or an extra panel or button in the app. Yeah, I mean it's a good a good a good question guys. Um the app that most people see as maybe something like call it 20% of Airbnb. There's also a host app but again most the work about Airbnb is what happens in the real world and um I think I said last time that we spent a lot of time imagine like you're living in a one-story house and then suddenly a bunch of people want to move into your house and you have to add like a second, third, fourth floor but you didn't build the foundation for a four-story building. And so what we had to do over the last few years is kind of rebuild the foundation. It really was only built for homes. It was not built to do other things. Amazon had this problem in the late '9s. They were built on ISBNs for books and they had to basically uh take their website and turn into a bunch of primitives. So, we basically already done that work. To give you an example, it took us 16 years to finally expand beyond homes. It took us two years to develop service experiences. It took us eight months to develop groceries. And it took us only two months to develop luggage storage, airport pickups, and car rentals. So basically looking at the time to launch from conceptional launch, we can now have an idea and put it into a market sometimes within like a couple weeks to a month. And what that should mean is instead of announcing one or two things a year, eventually we can announce dozens of things a year.

Yeah.

Uh cars, why uh obviously hard thing to do, but uh I'm sure people have been asking this to for for you know decade now. Uh why did you choose at some point not to maybe listen to your customers? Why are you why are you making those why was like why was now the right time? Because it just feels like such such a you know such an obvious thing. I'm booking a trip somewhere, you know, give me one click to to add a car. Obviously there's more that needs to happen on the back end. But

uh why?

Yeah, another great question. And I asked myself that like why didn't we do certain things sooner and if I could I would have. Um, you know, I remember that, um, one of my early investors said, "Starting a company is like jumping off a cliff and assembling the airplane on the way down." I never realized when I started a company that

I never realized. I thought if you hire thousands of people, suddenly you'd have all these extra people to do all these extra things. But when you're when we were in hyperrowth, we basically just had most of the people just trying to keep the lights on. And we really struggled in the 2010s during our hottest moment to really expand beyond our core business. We tried in 2012, didn't really work. Tried in 2016, didn't really work. We finally thought we cracked it in 2019 and then suddenly the pandemic hit. We lost 80% of our business in 8 weeks and we said, "Oh man, we don't have time to do this right now. We got to go back to our core business." So we kind of had three different starts and we tried it before. We just never really were able to stick the landing. I think this time we finally can. So yeah, people have been asking for this for more than a decade. In fact, 15 years. 2011, we began thinking about it. And now I hope I'm happy to say that hopefully going forward, you won't have to wait 15 years for another service. So we'll be they'll be coming really fast now.

Yeah. And and uh how how is it working under the hood? Are you partnering like is this a uh also kind of like sharing economy play? Are you partnering with car rental services or both? I imagine you want to.

Yeah, it's going to be a mix of things. There's not really a lot of global providers. So, we're going to be working with a number of different partners um that be able to that can fulfill this. Um some of the services like Bounce, like we don't do luggage storage. They have 15,000 locations, almost as many that are Starbucks. So, that's more like an app store integration. And then sometimes we have to build the services first party with our own host because they don't offer it. With car rentals, we're basically able to partner with a bunch of companies. Um no one company covers every geography in the world. We're in more countries than Coca-Cola. So, you have to patch a bunch of things together. And I think over time we'll probably

You guys are in more countries than Coca-Cola.

I think that like we were at least last time we checked.

What is What is What is Coca-Cola doing?

They're asleep at the wheel.

I know. Come on.

Founder mode.

I think we're in every country but North Korea.

Yeah.

Iran. Yeah.

Syria. Um Russia. Bellarus. Maybe there's one other. So, we're just about every other country.

Yeah. The other thing with cars that uh in as I was just like thinking about that as as kind of Turo came on the map the one of the and I love cars so I was always uh I I I thought very briefly of maybe I should get a bunch of cars that I like and uh maybe turn into a little business. uh quickly realized that like it's like fundamentally uh a fundamentally a wildly different business because if I have a property and I put it on Airbnb, even if people are staying in it 365 days a year, if I buy at the right price and in a great market, it will continue to appreciate. Cars are the exact opposite. Uh and it's just like a wildly different financial equation. And so um it made it always made sense to me just from that lens where the supply side is like incurring some like heavy heavy costs associated with uh actually like supplying uh you know providing that supply versus on the Airbnb side uh you know again you're you you can get a bunch of rental income and not uh not occur any uh you know significant losses associated with the asset. Yeah, I mean I think that's a really really good point and um usually people's second biggest asset after their home is their car. And so I think now we have people's time, we have their homes, we have their cars. We would like to move to a lot of different other categories. Um over time I think you'll see a couple dozen other categories coming over the next year or two on Airbnb. Essentially building this entire ecosystem of services. But you're right. I mean I think maybe one way to think about Airbnb is like just getting more capacity utilization out of assets. Um, you know, anything that's empty, it could be further monetized. And the world could be a bit more efficient. It could be cheaper to own a car. It could be cheaper to own a house if you could defer the cost by sharing with other people. That was basically how it started. I couldn't afford to pay rent, but that doesn't limit it to itself to homes as you mentioned. It could be anything. Cars, it could be boats, it could be equipment you have laying around, it could be kind of anything.

Uh, how uh how do you think about the the previous uh services that have tied into Airbnb? Was there ever a power law distribution in those any few services? We've talked about uh you know fitness trainers when you're in a town or private chefs or anything that can add to an experience, a kayaking tour, a hiking tour. Uh was there a power law distribution in those? Are you seeing uh breakout successes in in those? Like what what's the shape of that side of the business these days?

Yeah, so basically we learned two things with um these services. I'll talk about service and experiences. Yeah,

there are three services. We launch a 10, three breakout hits.

The three breakout hits are photography. A lot of people want photos on their vacation. And obviously, if you're a family of four, like one of you is not in the photo or you're giving your camera to someone else. And you you want to remember these trips. So having a professional photographer

take your photos for 30 minutes, it's pretty reasonable cost. That's very popular. Chefs. Chefs are not as popular in very urban areas, but like let's say you go to Lake Tahoe, you have a big kitchen, maybe you have groceries, maybe you don't want to cook. A chef could come over, there's not a lot of restaurants there. And then the third one's massage, especially again in vacational or villa destinations. Massage is very popular. Other than that, it's really geography by geography. So we see like in Salulita, it's a different kind of experience than say in like the Caribbean. So it really depends geography by geography. With regards to experiences, we're seeing a couple things. Number one, no surprise landmarks. People, the first time you go to a city, you want to see a landmark. But the thing we learned is the second time you go to a city, you don't want to see a landmark. You want to experience food. And the third time you experience a city, now you want to get inside access. So a big thing we learned is is this your first, second, or third time to city or do you live there? And depending upon the answer to the question depends on the type of experience we offer you. This was a nuance that we didn't really appreciate the first time around and now we do. And I think my prediction is the thing that will make service experiences really big is people will start booking them in their own city. That's when the TAM goes by, you know, by a factor of 10. And not to say it'll be every day, but it just makes it a lot bigger TAM.

Yeah. Uh yeah, it just just clicked for me that uh you know one of the challenges of all the marketplaces like photography, chef marketplaces, uh massage, all of them, we don't I can't even really think of their names even though there was like venture funded companies in those categories because the second you hire a chef, they're literally preparing you food. You immediately develop like trust and a relationship. And so in if you book find a chef in your hometown,

you're talking about disintermediation.

You're going to have this massive disintermediation

and also economies of scale. If you're just the private chef booking company, very hard to support the entire operation, the back office, but Airbnb is big company. This can be one of many features and the the the can travel. It's like, yeah, I want a photographer here. I want a chef here.

You bring up two points. Um dis I'll I'll bring up both points. So, one thing is most services there's not even one app in the world. So, if you want to get a massage United States, you might use an app like Zeal, but if you want to get a massage in Korea, I don't even know the app. It's probably a Korean company. And if you want to go to Brazil, it's going to be a different company. So, it's not even possible for most people to know which app to use in which country. And so, being able to aggregate all that demand is great. And these apps, these developers love it because we basically are their international expansion strategy. another much of these companies the hardest challenge they have is growing internationally and we say well we can introduce your brand to a global audience well now let's talk about locals yes

I don't if you're going to do a repeat service we don't want to charge 15 and 20%. Mhm.

We're going to have to decide a business model and maybe there is no commission or it's a very very low commission and maybe the value there is just we make your life easier. And I don't I think this brings up a larger point which is we don't need to monetize every experience on Airbnb. The best thing is have a great relationship add value and know that there's enough highv value assets we can make money on and we don't need to try to get every last dollar. We just really want people to love our service and as you know you know we generate quite a bit of free cash flow. So um you know we're one of the more profitable companies as a free thank you as a free cash flow standpoint. So we are able to pass a lot of value on to customers.

Yeah. I think I think you know that that framing as like a concierge for the world where like if you're staying if you're staying at a hotel like the concierge is not always thinking like okay this person wants something to do today. How do I get the maximum amount of value out of them in this moment? Right? because then you'd always send them to why don't you eat at this restaurant on the property or why don't you do this thing on the property but just like actually taking a a positive some view and just know that like you want to be core to someone's experience wherever they are in the world I think is

I like concier for the world by the way that's like a very good slogan actually

coinage I love it uh

it's all yours maybe this is a random pivot but uh the total solar eclipse is happening August 12th 2026 Uh I want to know it feels like it's driving a lot of travel broadly and I want to know like do these special events first of all like I feel like every time there's like one of these things it's like this will never happen again for for 600 years and then it happens in like two years.

No no no it's a very specific happens every years but there's a lot of things.

Yeah. So, a couple years ago it happened in Texas and uh and this time it's happening in Greenland, Iceland, Portugal, and Spain. And so, there is a lot of travel and I've heard stats from other companies. And I'm just wondering about these like big events. First, like how much do they show up in the data? How how much do you see them? And then second, like what are you doing to like amplify and get the most out of these? Let your customers know because you you frame this as like sometimes the best experience is like when you know it's the first time visiting a place, second time, third time. But at the same time as a user there's this tension between I love it when a company knows something about me before I have to fill out a form. But also it gets a little creepy if they know too much about me and this like this weird tension where I want you to know but I don't want you to tell me that you know and I don't want to fill out the form but I don't want you to spy on me but I sort of do want you to spy on me. Walk me through all of that.

Okay. So, yeah, two parts. I'll do the solar eclipse and then we'll talk about essentially personalization without being creepy maybe is the point.

Yeah.

Okay. So, on the solar eclipse in 2024, I think it was the spring or I don't know when it was in 2024,

we were able to see a heat map. So, yes, you saw in the data and we were able to see a heat map of the exact path of the solar eclipse and you could look at a heat map of all of our bookings and anyone that was in that line of the eclipse, you saw a massive increase in bookings. When the Taylor Swift eras tour came out, you can literally follow the tour from the data on Airbnb.

When the World Cup came in Paris, um, sorry, the Olympics came in Paris, 700,000 people stayed in Airbnb. That's like eight, nine Olympic stadiums worth of people. In Milan, 200,000 people stayed in Milan Cortino for the Olympics earlier this year. The World Cup's coming up in Mexico, US Canada. We're expecting that to be the biggest event in Airbnb history. Um, you're actually hitting on a really key point. The only maybe the reason Airbnb exists is this weird phenomenon where people list their homes for an event. Most people have only intention of listing one time, but about 50% of the people continue hosting.

Yeah.

And so it's kind of a hook and a lot of people like, I don't want to host, but they do it once. They make a bunch of money. They realize it's not weird and they keep doing it. If it wasn't for this phenomenon, there may not have been an Airbnb. We used events to grow. So that is basically a core part of our strategy whether it's financial or LA Airbnb futures. I should be able to go buy buy I should be able to go, you know, see events that I know are going to happen, Olympics, World Cup, and basically buy and then resell. I'm kidding. Um

Oh, and then I want to I want to answer the second part of I think John's question, which is personalization without being creepy. Um, so right now I think most websites um and most apps don't really ask you questions. They infer things, right? They think that if you ask somebody a question, that's friction. And so for 25 years, this is Amazon, this is Instagram, this is basically every app, including Airbnb. We're mostly just looking at what you click on, what you book, your prior behavior, and we try to infer based on that what you want in the future. I think going forward, we're going to go beyond that. We're going to do two things. The first thing we're going to do is we're going to ask you questions. That's what an agent does. An agent asks you questions. So your concierge for the world should ask you questions. You went to a travel concierge but they they didn't ask you a question. That'd be pretty weird. So I think that's the social contract of the app is more conversational. We're going to get more information. But the other thing is designing preferences. We found that people are fine giving us their information if they know why, where it's going, that it's vaulted, and what we're going to do with it. So we're going to develop a preferences panel. Like we announced today, one of the things I'm most proud of is the design of our privacy page. Most people they either don't care about the privacy page and like the people that it's like their entry level work or they make it sometime sometimes maybe make it purposely hard. Um but then I ultimately that erodess trust. So we're making preferences. I want to basically build a preferences library where we show you here's all the stuff we know about you.

Do you want to edit anything? Do you want to add it? And here's what we're going to show to whom? And you can say show this to the host. This is only available to an agent. This no human can see. It's vaulted, but the app can see it and eventually maybe it's encrypted. So, that's kind of where we want to go.

Mhm.

2034 total solar eclipse in Egypt. You can stand at the pyramids and watch it book your Airbnb futures.

I'm going to go I'm going to go and offer cash today.

You should start buying property all over Egypt. And

uh last question. Uh what what's the last major fitness or health unlock that you've had and then we'll let you go.

Interesting.

Oh, very good question. um fitness or health unlock. Um

could be a habit, could be a supplement, could be anything.

Great question. Um protocol

actually. Okay. If you're sleep I I've been taking creatine um five grams since I was like 17, but I read that um they did some studies that if you didn't get a good night's sleep, you can take up to 20 grams of creatine and you are nearly as alert as if you got a full night's sleep. and I don't know

seems to work. And so if you don't get a good night's sleep, instead of taking a normal dose of creatine, take a much higher dose. Um the only other thing I'd say is um for those listening, I'm a big fan of compound movements. I think the most important exercise if you only do

one is the squat.

Um and I uh I'm very

sorry. Sorry Brian, I don't mean to laugh at you. We have these sound effects. So John, talk sound like this. Can you push?

It makes my voice sound like this. And Jordy was doing it to you during that last bit and it sounds ridiculous.

Yeah, I really like compound lips.

Compound lips.

That's That's good. That's exactly how I'd want to be able to say it when I'm talking about the spot. By the way, before we go, I just want to tell you something. Are you guys still interested in doing the Blimp Experience?

Absolutely. Yes. 100%.

We're ready. We're ready. We packed our belly.

We've been talking to brands. We've been talking to people. And I want you to know that we're going to make this happen.

I I'm very excited. We're going to make it happen. The team is pumped up right now. Everyone's fired up.

We're fired up. Uh, congrats to the whole team on the on on all the new releases. It's very much great progress. Fantastic. Always fun.

Have a great rest of your day. Congratulations. Goodbye.

Unfortunately, the the first Chad guest very fitting. So, unfortunately, the chat effect uh the

guest cannot hear it.

Only only you can and the two of us. Uh, but we're going to keep using it