Brian Chesky: ‘I don’t think that New York City is leading the way with its Airbnb regulation’

In October 2007, San Francisco hosted an industrial designers’ convention, and there wasn’t a single hotel room left in the city. Brian Chesky and his roommate, Joe Gebbia, were struggling to pay the rent, so they decided to use some inflatable beds they had in the closet to accommodate three guests. That was the seed of what, after the incorporation of Nathan Blecharczyk (another former roommate) as a partner, was dubbed airbedandbreakfast.com. Today, 16 years later, Airbnb is a giant that offers seven million apartments, houses and even castles.

“We were not trying to start a travel company. It was kind of an accidental discovery,” explains Chesky, who at 42 has a net worth of almost $9 billion. “If you had told me that I would be telling that story over and over again 16 years later, I would never have imagined it.” He simply thought that there would be more people like them, willing to earn a few extra dollars, as well as guests willing to save some money, live a different experience and meet new people. That idea became a business with a market cap of more than $76 billion. Chesky gives the interview in a charming building (Beyoncé used it for the video of her song Halo) that the company rented to present the platform’s news in the heart of SoHo, in New York, a city that has approved such a restrictive regulation that, in practice, it represents a veto for Airbnb.

Question. Do you fear that other cities might follow New York’s example?

Answer. I don’t think that New York City is leading the way on this. I think New York City is probably going to be a cautionary tale. I am so disappointed that we weren’t able to find a solution here. What we’re hearing is that a lot of posts are going underground. They’re listing on other websites, ones that you can’t actually regulate, like Craigslist, and I don’t think that’s a win for the city. I don’t think that’s a win for the hosts, and I certainly don’t think that’s a win for the guests. Hotel prices in New York are 8% higher than a year ago. It costs over $500 a night to stay in New York, and to get a really nice place you could be looking at $700, $800, $900 a night. How many people can really pay that kind of money? So I think we’re going to start to see people doing all sorts of things to come to New York; you might see people staying in Jersey City and other perimeter areas.

Q. There are many complaints about the impact of Airbnb on the gentrification of cities.

A. We’ve developed a sensible regulation in cities all over the world. In fact, among Airbnb’s top 200 markets, 80% have regulations on the books. They’re always different; there’s no one-size-fits-all, but we’ve found solutions that work with cities all over the world. We’re always ready to work with cities and I think the best indication is that we are in a 100,000 cities, and in the vast majority of them Airbnb has found a solution.

Q. Citizens accuse Airbnb of making access to housing more expensive.

A. Airbnb started because I couldn’t pay my rent, so housing wasn’t affordable before we started Airbnb. If it was, we wouldn’t have started Airbnb. The reason housing is typically not affordable is that there’s not enough housing in the city. They don’t build enough for the people who live there. In the biggest cities we represent a very small, tiny percent of the housing, and many of those people would not have those houses on the long term rental market. We always want to be part of the solution. Many cities have come up with regulations that they think address this: London, for example, instituted a registration system, and you rent up to a certain number of nights a year. A number of cities around the world have done this. I think there’s a number of different ways to solve this, and I don’t think an outright ban is necessarily the best way.

Q. Your penetration in the United States is significantly higher than in many other countries. In which areas do you plan to grow more?

A. In the United States, Canada, Australia, France, U.K., we have a high penetration. In other countries we’re more nascent. Especially in Asia, we’re a very new, young brand, so we have a huge amount of opportunity. We’ve been focusing the last couple of years in Germany, Brazil, and Korea. We’re going to be really focused the next couple of years on international expansion, whether Spain, Italy, Germany, and others parts of Europe, as well as Latin America, Asia Pacific, whether it’s Japan or Korea or other countries. Airbnb is a global travel network, and it tends to resonate fairly well in every country in the world.

Q. Airbnb has diversified into luxury accommodations and experiences. Have you found any potential new services?

A. Yes, we’re looking at a lot of new opportunities for products and services. We don’t have anything that I can share right now, but the general approach I’ve had is: the more people love the thing you do, the more they want other things from you. We want to really try to perfect the core service that we have. We recently launched the Guest Favorites collection. People tell us they love how unique every Airbnb is, but a problem they’ve described is this moment of truth, when you get to an Airbnb and you’re not exactly sure if it is what you booked. And we thought: what if we could combine the uniqueness of Airbnb with the reliability that’s more akin to a hotel? I think that’s what Guests Favorites is: two million of the best and most loved homes on Airbnb. In the coming years, you’ll see some new products and services from us.

Q. How is Airbnb planning to integrate artificial intelligence (AI) into the platform?

A. I think that AI will be transformative for many businesses, especially like Airbnb. I’ll give you a couple examples. Number one is customer service. If we have a guest from Spain going to Tokyo, and the host is Japanese and they speak two different languages, and they’re calling customer service about a home and it’s a certain time of day, that’s a very difficult customer service challenge. They can be calling about a myriad of different issues. AI could create real time, multilingual support that customer service agents can supervise. It could be trained on a corpus of thousands of pages of customer support documentation. It can read and understand the entire history of the person that you’re working with. And it can also identify all issues that were like this in the past, and it will lead to the best resolution for both parties. That’s amazing. One more example: imagine if Airbnb was like the ultimate travel agent. Instead of just asking you where and when you’re going, it can literally ask you, who are you? What do you want? What are your preferences? Who are you traveling with? And it can just create an entire world of options for you. So I think that like the internet, like when smartphones came out, we would probably call this a platform shift, and a platform shift is when the whole game changes.

Q. How do you plan to compete against the tech giants?

A. What makes Airbnb unique — and there are probably many things — is that we’ve created a new category. A lot of people say: “I booked an Airbnb,” “I am Airbnbing my house,” “I’m going to get an Airbnb.” It really has become a noun and a verb used all over the world. We’ve become synonymous with this category, we’re totally focused on it, we have custom-built tools and 90% of traffic comes directly to us to get an Airbnb, not to Google.

Q. How has the pandemic changed the way we travel?

A. I think we have a foot in the world before the pandemic and a foot in the world of the pandemic. Before the pandemic, a lot of our business, about 80%, was cross-border or in cities. During the pandemic people traveled in their own country, not crossing borders, and they were staying longer and in bigger groups. Today, we see a little bit of both: we see a return to cross border travel, a return to urban travel, but we’re still seeing longer stays, we’re seeing families travel, we see larger groups. I think that we’re in a really exciting period where there’s just going to be a lot more traveling because people value the things that are taken away from them, and with the pandemic people had travel taken away from them for a while. There’s more flexibility now, more people can do their job with a laptop, on Zoom, and that means that they can travel more flexibly, they can go away for longer weekends. And I think that as we spend more and more time online, what people want to do is get offline, and travel is the way you do that. I’ll give you another example. A lot of my friends from college live in different cities. Probably a lot of people today have friends that don’t live in the same cities. My parents, my grandparents — everyone they knew was in their city. So the way you see people is to travel; maybe you will take trips together. So I think travel is back, and bigger than ever. The old way is back and the new way is here to stay.

Q. How has Airbnb evolved from its beginnings as an affordable alternative to a hotel to something different?

A. We still are a cheap alternative to a hotel, but I think the difference is that when we started Airbnb I built the service for people like me; I was 26 years old, I was a budget traveler, I was willing to stay with other people, share a space in their home, get a bedroom. We still have rooms, more than we’ve ever had, but now we also have big vacation rentals. We have property managers on the platform. We have homes off the beaten path, we have tree houses, castles, and igloos. We’re truly a global network; we’re in nearly every country in the world.

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