Q3 2021 Airbnb Inc Earnings Call
Our highest ever nearly forex larger than a year ago.
Adjusted EBITDA exceeded $1 billion also our best ever.
Our EBITDA margin was 49% an increase of 30% or 3000 basis points compared to Q3 2019.
Over the summer. We also reached a major milestone with 1 billion cumulative guest arrivals.
This means that Airbnb has been used more than 1 billion times since we started.
Now finally, I am delighted to report that our host earned a record $12 8 billion in the quarter.
Now finally, I am delighted to report that our host earned a record $12 8 billion in the quarter.
Our results show that the growing strength of the travel rebound is here. Despite the continued pandemic. We saw continued strength in North American EMEA <unk>.
And the acceleration of our Latin America, despite sequential increase of cancellations.
Now excluding APAC, our total global Knights and experiencing booked exceeded 2019 levels.
Gross booking value of $11 $9 billion shot above 2019 levels by 23% driven by the strength of ADR.
But something bigger than a travel rebound that's happening.
The world is undergoing a revolution in how we live and work.
The pandemic has suddenly on tethered tens of millions of people from the need to go into an office technologies like zoom make it possible to work from home Airbnb makes it possible to work from any home and this newfound flexibility is bringing about a revolution in how we travel because.
Because for the first time ever millions of people can now travel anytime anywhere for any length and even live anywhere on Airbnb.
And we believe that this trend towards more flexibility will only accelerate.
And temporary housing student housing and many other reasons.
Now finally more people. We're also interested in hosting than ever before we ended Q3 with the most active listings ever and there are two reasons for this first our demand is driving more supply.
In fact, our highest supply growth is in our highest demand destinations, particularly in North America, and EMEA and second our marketing and product initiatives to attract new hosts are working.
Now we're constantly improving our service to meet this new way of traveling and the wave of guest it'll bring.
On May 24.
We introduced the Airbnb 2021 release, which included more than 100 upgrades across every aspect of the Airbnb service.
On November nine which is next Tuesday, we will be announcing the Airbnb 2021 winter release and this release will include another 50 upgrades and innovations that will make it easier to host and support the changing needs of guests and you can watch it right on the homepage next Tuesday at eight a M Pacific standard time.
So I hope you can tune in to see I'm really excited about what we have to share.
So now, let's turn to our progress on.
On our 'twenty one plan.
Now as a reminder, our single priority in 2021 has been to prepare for the travel rebound to do this we've been perfecting the end to end experience of our core service and this includes educating the world about hosting recruiting more host simplifying the guest experience and delivering world class service.
Let me give you an update on each of these.
First we are educating the world about what makes <unk> different.
And that is hosting.
Earlier this year, we launched our first large scale marketing campaign in five years made possible by house.
We're educating guests about the benefits of being hosted and we're also inspiring more people to become host and we continue to be encouraged by the results of this campaign.
We're recruiting more hosts and setting them up for success on.
On May 24, we launched a completely redesigned hosts onboarding flow that makes it simpler for anyone to start hosting.
The process potential host can now be paired with super host to answer their questions or concerns.
We began asking super hosts in nine countries and we've since expanded the program to over 30 languages in 196 countries.
Third we're simplifying every part of the guest experience.
Earlier this year.
However.
Revenue adjusted EBITDA, Yeah, net income, where our highest ever travel.
Travel is undergoing a revolution.
People are now taking longer trips traveling to more locations and you've been living an airbnb as the world changes. We continue to innovate we've made more than 150 upgrades innovations. This year alone so with that Dave and I look forward to answering your question.
[noise] thank K.
If you would like to ask a question. Please press staff on each by one on your telephone keypads.
If you change your mind, please <unk> <unk> <unk>.
If you change your mind, please <unk> <unk> <unk>.
With our very best Super host on Airbnb and since we launched this feature in May more than 50000 prospective hosts have used us and we're now expanding this to 196 countries globally and finally, we're continually investing more tools to allow host to expand their business and with all this means is that youre going to see continued innovation.
But what we've seen is an increase in the trajectory of number of people, becoming a host the other point, though Eric I just want to make is the following.
No <unk> are we ever supply constraint globally on Airbnb. The vast majority of hosts only rent occasionally and so the Holy Grail of travel is pointing demand to where we have supply before the pandemic. Most people were very fixed in their search parameters. They had a destination of mine and they have dates in mind, but now because many people don't have to go.
It's pretty with long term space.
Then I'll just I'll just share a few more thoughts Mario.
We've just seen a major paradigm shift and travel before the pandemic short term stays is really the primary business that we're in what we actually saw was that long term stays why is our fastest growing segment of business even before the pandemic. So I think with the pandemic. There is an accelerated inevitable trend there was.
Already this emerging category between classic traveling and really kind of permanent housing, which was people seeking stays of weeks at a time even months at a time and I think with the pandemic is done is just accelerated us we're gonna see I think.
We're gonna see a lot more people going away as they have newfound flexibility even people with families who can't go away during the year, they may be able to travel a bit longer during summers as well. So this is really exciting and the only other thing I just added nearly half our businesses for more than a week as well. So these are these are really exciting categories. I think there's a huge amount of growth going forward. Please.
These different segments.
Okay. This Friday.
Next question comes from the lineup Cenci from Bank of America Chen. Please go ahead.
Yeah.
Thanks for taking my question. This is jen on for Justin.
I'm just wondering so you guys mentioned that with the host and initiatives, you're gaining supply and very popular area like North America and Europe. Just wondering are you seeing supply opening up in urban areas and as it makes it kind of comes back to urban and cross border travel How's.
How should we think about the impact on a D r's take right and maybe margin for future years, and then just one follow up on marketing.
Uhm looking at marketing French Fries, obviously this year has been super positive compared to a coupon Dennis sending you have a lot of leather chair just wondering.
Do you see a scenario, where maybe you would have to be more aggressive on marketing at hotel travel was coming back. Thanks.
Alright, so thank you Jen I heard three questions. One is about supply growth in your urban the next this mixture it's impacting a D. R. And then marketing spend uhm, Dave do you want to take this I think this would be great for you to sure.
In terms of you know again, one of the things to remember is a reason why are we kind of highlight on the call the growth in our supply in the non urban areas of North America, and Europe is that we'd get the supply when we have the demand and that's why it's gone up 15% since the beginning of the year because that's also where there's basically cause demand now we're all.
Obviously, seeing you know a greater demand pick up in our more urban areas. So you know the percentage of nights in the urban areas starting to increase her now you know maybe 46% of our nights, we're still down to maybe 60% of them are nights kind of pre COVID-19 and so we'll continue to see you know lifting gross in those more urban.
Obviously, seeing you know a greater demand pick up in our more urban areas. So you know the percentage of nights in the urban areas starting to increase her now you know maybe 46% of our nights, we're still down to maybe 60% of them are nights kind of pre COVID-19 and so we'll continue to see you know lifting gross in those more urban.
Areas as the demand kind of keeps coming back so until us read back to full demand, we actually don't need incremental growth because we're still below our nights that we had back in 2019, but again the important part is that we get the supply when we need it because the supply will follow that demand and we're <unk> continue to make it easier.
The new supply to come on board in terms of forward looking <unk> you know the high average daily rate. We've seen throughout this last year has been primarily driven by the mix of types of space and the location. So it's a mix of Europe, and North America have higher average daily rates non or.
Ben whole home larger homes, all those reasons have been driving up the rates overall and the other thing we start seeing a little bit more in Q3 with some price appreciation in high demand areas and so it was a combination in Q3.
Both a mix of types of stays and some of the price appreciation and what we do anticipate as as urban comes back and more markets like Asia, and Latin America, which have lower Uhm average daily rapes, we anticipate the overall ADR to moderate some but we also believe that the you know some of the.
The higher a D R. Wilson scheme for the future so in terms of.
And then what we did so I also.
Shareholder letter is that we anticipate that the a D r's in queue for should be relatively consistent with an 80 hours. We had here in two three.
In terms of marketing you know, we're really happy with the adjusted marketing approach that we've taken again. This was a pre COVID-19 change that we made where we were began to invest in our strength and our strength is the brand of air Bnb and and we modify that marketing approach pre COVID-19.
Reduce our reliance on search engine marketing and then in Covid, we have shifted it even just more significantly more quickly and we're really pleased with those results as Brian mentioned this broader brand campaign talking about made possible by hosts it gets to talk to both sides of a marketplace at both recruits new.
Hosts Airbnb and Uhm talks to guess about why you'd want a standard bnb and we're really happy with those results and and plan to continue the strength of that we've increased our relative marketing read this year just given the fact that our the business has been going quite well and so but on a relative basis or marketing <unk>.
Fences a percentage of revenue are down from levels, we had in 2019 and we should anticipate.
Uhm this it'll be in this kind of range for the foreseeable future.
And I can just share just to really recap briefly our marketing strategy, we take a really different approach and our competitors. The full funnel integrated marketing strategy and it really starts with P. R and word of mouth and really weren't a mountain pr's, how we built a brand for the vast majority of years before you even have enough money to have a marketing budget.
And because of that Airbnb is a really well known brand that for now and and number used all over the world and because of that more than 90% of our traffic what's for your unpaid and two three and so we think of marketing is really education brand marketing is really about educating people that are highly differentiated products and then performance marketing for us isn't really a <unk>.
To buy customers at the way the leaves are in on balancing supply and demand. So we think that they're really unique approach and I think that it's just really all about continually investing in our brand and over time. We think you know the amount of the loyalty and the to the brand will only increase.
[laughter].
Great Super helpful. Thank you both.
Next question comes from Kevin <unk> from kind of code Kevin Your line is now a pen.
Thanks, a lot that's it's Kevin from Cowan can you give us a sense of the booking trends in the fourth quarter quarter to date, you mentioned acceleration. The shareholder letter are you seeing that back to Q2 levels yet in terms of growth as compared to the same quarter in 2019.
To get in.
Kind of the Delta slowdown that would be helpful. Thanks.
Hey, Kevin Thanks for the question, Dave don't take <unk>.
Sure. What we're seeing is continued strength and growing strength of the business says you know borders are starting to open up people are more vaccinate more willing to kind of travel we're continuing to see booking strength and that's why we're gonna be seeing gross booking right of gross bookings you gross.
Increasing from Q3 to queue for I don't have a specific percentage that are sharing on the call today, there can be some variability on the overall growth, but it is accelerating and that's what's included in our guidance estimate that we'd sure.
Thank you.
Next question comes from Steve and cheese with Credit Suisse. Steven Your line is kind of like <unk>.
Okay. Thank you Brian I don't know if you have data. They stayed up I'll go ahead and ask anyway, but are you able to say, perhaps what percentage of your registered users, perhaps I've younger children, who until now we're not able to get vaccinated and just try to get a sense for how.
Much incremental pent up demand you may have waiting for you as parents start to feel better about traveling more what they're younger kids. Thank you.
And thanks for the questions. Dave I don't think we have that data specifically, but I can just share a couple of high level thoughts with you.
Think that we're gonna be entering a new golden age of travel.
I tend to think that you know that last 18 months I've been you know the world has been turned on its head and I think that you know many people yearn for what was taken away from them now not everything that was taken away from US do I think we all want back, but I think one of the things that was taken away from a lot of people. They want back is the ability to travel and to be able to travel freely and be able to travel freely.
Ross borders and just to give you one anecdote one data point on October 5th 15th I believe it was that day that president bite and now the reopening of a border for international travelers come to the United States within one week of that announcement, we saw 44% Spike and nights booked for stays crossing borders coming.
N T United States, an air Bnb first days November 9th and later, which is when the borders would open. So what we are seeing like kind of across the board is evidence of pent up demand I think all the new emerging use cases that exist in air Bnb are here today, because I think flexibility is here to stay so I think.
[noise] a lot of the nearby destinations with people getting cars here to say I think the longer stays people living room would be Thursday, but I think what I'm really excited about is the emergence of cross border travel cross better travel is now 80 per cent of what it was added at its peak an air bnb it used to be half our business. We went down quite a bot that now it's about one third of our business.
And growing again, so yeah, we are seeing a lot of pent up demand and Dave I don't want to add anything to them.
No I think that's I think that's the key you know a cross border travel you know, it's a 33% here in Q3, but we're continued to see on strengthening here in October you know more continue countries are are reducing the travel restrictions and you know the <unk> troubled trends continue to improve.
Thank you.
Next question comes from the line of price sale from Geoffrey Frank. Please go ahead.
Thanks, just on the cross border and when you think of of Europe, and what you're seeing there can you drilling and give us a sense of what's starting to happen inside the country there.
David and I'll take that.
Sure and we're continuing to see sequential improvement in the net lights book in October relative to September so trouble restrictions as they come off we're continued to see that sequential increase we have more global net nights booked in October 21 that we did in 2019, So I think that's a really poor.
That's a good sign for Europe, and you know there are some week to week variations, but the trends continued to be open to the right.
It has just not fallen has there been anything surprising to you through this through this recovery in Europe that.
Just anything that's <unk> that you've seen in in in <unk> underlying trends or is it just continued stripes I mean has he been mentioning.
What was it <unk> it tends to vary by country right different countries will have different levels of restrictions an opening there's obviously a lot of pent up demand for kind of Pete kind of travel we saw that in two three is a big part of the the sprinkler results Q3 or Europeans wanted to get into.
Traditional what kind of summer holidays in you know in Spain, and Italy, and other places and so there can be some variation by country throughout but the strengthening of the business in Europe, just kind of continuous we're seeing a nice uptick in bookings, especially even leading into 2022, so some of them.
[noise] bookings growth that we're seeing now is gonna go obviously before traveling early next year and drop 2022.
Great. Thank you.
Thank you.
We now have a question from duck I'm not from J P. Morgan Dark Blue line is now a pen.
Alright. This has been going on for dog. Thanks for taking the questions. The first one so based on your conversation with your host what do you think is the biggest friction point of prevent took them from becoming uncles for the first time and along that line among the initiatives that you'll go.
He was real tough for them to see our what resonated.
No Tomatoes, most and that's a follow up holidays newer host pole post cohorts performing versus your historical court, but they didn't have the upgrade <unk>. He was supposed to have today.
[noise] alright. Thank you for the question, Dave a dog why don't I take the first part of the question about what are the biggest friction points for host R. And then date can have the follow on now.
Really really great question, there's really three parts of the funnel number one do people know about hosting number too is it easy and number three can they get help to me those are the three parts of the final. So number one people even know about hosting well <unk> brand is very much mainstream so we've seen a huge opportunity and people being a.
The house I don't think most people realize that the average host can make $9600, which is more than the stimulus check they've been getting United States and the amount of effort surprisingly easy and so the first thing we have to do with continued to tell a story of hosting and we've been doing that and that is working the next thing we have to do is make it easier to host easily make something the more people do it erbium.
<unk>, you know really innovated uhm and do a lot of cut some tools to make it easier to host than ever before this was really the core innovation. We have we felt the system of truck, we'll we're continually making it easier to host we obviously simplified the number of steps to become a host to 10 really simple basic steps you can do it now quite quickly from your phone or a desktop device.
And we have more innovations are gonna make it even easier that we're showing next Tuesday November 9th So that's the second part, making it easier and as we do that conversion rate goes up and then finally, you know sometimes people.
This is this is some people want to talk to other host they want to know what it's like what's it like to let a stranger home how much should I charge, what are the local rules and regulations and so having another host to talk to you is really important now. This is the power of the empty model. The thing one of the things that make somebody so special is where community and were accumulated where health host tell us.
Other hosts about air Bnb, and they bringing him onto the platform and so what I'm really excited about is the <unk> program, we've had more than 50000 prospective host.
Sign up to use that and we're gonna continue to scale that and we're announcing on November 9th that we're gonna be scaling be asked to press program. So these are three parts of the journey and continue to focus on these we're gonna get a lot more host day, if you want to take the next part of the host for attention.
Sure you know what we're seeing I can step back and some of the new host acquisition that it makes it a little too early to tell exactly how the retention and things are gonna work for all the new host, but let me step back and broadly sure that overall, we're seeing churn rate of our hosts has improved a slower than it had been historically.
That the actual success rate of new house is increasing like 50% of new listings, receiving a booking in three days 75 per cent new listings, receiving a booking with an eight days so they're actually more successful more quickly we're seeing of the new host that are coming on that they are the the traditional host that've been successful and there'll be a b.
An individual house that are largely have exclusive to airbnb. The may only have a property or too it's that core individual host that stole the majority of the hosts were kind of bringing on and the cross lifting of our hosts is actually down from where it was and kind of pre COVID-19 time, So I think the overall health.
Of our hosting community is quite strong and the growth that we're seeing in new host is very consistent with the historic types of toasted we've had in the past.
Got it thank you.
Thank you.
Next question comes from the line of Justin Pashtun from key Pak <unk> Justin. Please go ahead.
Great. Thank you Brian quarterly at a lot of successful flexible style is what is your learning spin around that the marketing of that feature to consumers and what do you think the next steps are to make this a broader consumer behavior does that more brand marketing or is that something with a man. That's question one and then four.
Dave's question to ask me to think about the pace of the urban recovery going forward. Thank you.
Alright, yeah. Thank you very much for the question just in [noise].
I'm really excited with I'm flexible so just to recap what the feature is on May 24th we announced I am flexible a new search tool that allows people to search on your being b, if they're flexible about where a window traveling and so you could go to everybody's homepage right now actually you could do it you'll see a really big button. It says I'm flexible if you click on that button and now it takes you to.
To a whole new view of Airbnb, where do you think completely browse now this is a really special new product rebuilt we actually went through millions of lifting. So we had to do this really extensive process of organizing are structured data essentially getting an organized cadillac of all of our inventory if something's said that the treehouse is it a treehouse we made sure.
For every photo with a properly label and this feature is been really really successful. We also have flexible day festival dates allows people. They are thoughts about when the traveling to say I'm looking for a place for a weekend the week or week or a month anytime over the next six months well that those features have been used more than half a billion times. So.
There are lessons well the first lesson if conversed for me the more people use on flexible they're more likely they're going to book, an air bnb, because they're more likely to find a property number two what it's showing as we're able to acquaint demanded where we have supply. There's a lot of really unique lifting veteran location that people wouldn't have thought to type in right and might be in a small town you've never heard of.
I'm flexible it really levels the playing field allows many more properties to be discovered maybe another way of thinking about it as I'm flexible turned the home into the destination. So you don't have to type in the destination and I'm really excited about this so so so this tells us that we're onto something it also tells us that there's a new <unk>.
Paradigm and travel and so I think that this flexibility is here to stay I think one of the Holy Grail and travel is the answer a question for a guest or where should I go and when should I go and buy having this new flexible features we're able to really be able to do that so what's next for US is that we're going to continue to invest in this feature on November 9th.
We're announcing for new categories of I'm flexible, there's gonna be some really cool features that'd be can shows I hope you tune in we're also expanding the flexible dates feature from six months to 12 months. So now you can see when these really incredible properties available anytime in the next 12 months and we're going to continue investing this feature and I think down the road this'll be.
A major way that people are searching an air bnb and it's so important because again it allows us to balance supply and demand.
Did you want to take the second question.
Yeah, I think one thing to kind of step back to remember is that you know airbnb strength has traditionally been cross border and more urban does that's traditionally where our business strength. It's downright cross borders been 50% of our business the urban spend about 60% and yet are really strong Q3 results.
Happened wall, even those two parts of the business or not yet returned to kind of pre pandemic level. So I cross border. So 33% the urban high density Urban's at 46%. So it's it's not quite back, but it's growing nicely. So I think what you say about the pace of urban recovery is that that will continue to be additive too.
Our business and the strength that we're seeing overall I think what's also interesting about the peace of the urban recovery is with the maitre, that's even a little bit different historically are uhm top 10 cities in the world and contributed approximately 11% of revenue and now the top 10 cities are comprising about six person.
<unk>. So it's just getting more diverse more spread in terms of where our distribution of travel is so uhm as urban comes back I think it's still gonna be even more bloodshed.
You know version of the the revenue of possible.
[noise] next question comes from the line of catch Kelly from I can hi, Jack. Please go ahead.
[noise] great. Thanks for taking my question.
We've seen a couple larger calm property managers in an urban accommodation providers.
Start to scale up inventory that'll probably use your platform for bookings so Brian could you just provide us an update on how you're working with some of the larger property managers and then in your opening remarks, you did call out some major companies on the work from anywhere trends is there any way for you to work closer to them and provide benefits.
[noise] workers.
Yeah. Thank you for your question shed Yeah, Let me let me let me let me take both of these large property managers and work from anywhere trends in how opportunities to work with companies. So on the first one.
<unk> our platform is 90% of <unk> individuals the 10% of our hosts are professionals are very important to air Bnb and we continue to build new tools for that and so this this past year alone. We've had 150 upgrades and innovations and around half of those have been for a host and many of the upgrades. We have have also applied to.
The more professional hosts as well and so we're gonna be showing off a number of features on November 9th and and in many of these are gonna be innovations for professional host in addition to individual Ho. So we're still very focused in this area and I can I continue to believe that we're gonna be growing really quickly and just to give you. An example, as Dave said we've seen are.
Fastest growing areas of of inventory in North America, and Europe, and non urban areas and certainly professional it hosts are a part of this and I think they really loved the amount of demand that we provide for them now as far as the work from anywhere approach. Yeah. I think this is a really exciting area I mean, as we said.
Amazon for TWC, Proctor and Gamble or just the beginning of the number of companies that have offered you know a more remote policy I think it's safe to say that very few companies that uhm have office workers.
Are gonna be asking those workers to come back to an office five days a week and all you have to believe it that people don't come back five days a week maybe to come back four days a week maybe to come back three days a week, maybe they had even more flexible policy and all we have to do is believe that to believe that zoom is here to stay to believe that work from anywhere is here to stay and so we're start.
To see a lot of companies certainly reach out to us we don't have anything to announce right now, but we are going to continually make it easier for people to be a live anywhere and work anywhere on air Bnb integrated with companies that that's where it takes a course it'd be something that we continue to do more of.
Thank you.
Oh.
Next question comes from the line of Conan Sebastien, Some bot call in two nine is that Le pen.
Hey, this is <unk> for calling I was just wondering if you could talk about you know kind of a trend you're seeing between the growth and nights booked verses adoption of experiences and is there any difference in the trajectory of recovery. There and then maybe just how your relationships with communities are.
Doing thanks.
Yep.
I can take these.
So obviously the growth of our our our core business of homes has been very very strong with experiences I really expected last year to be a breakout year for air Bnb experiences and of course, the opposite to happen that dynamic kind of endemic put that product on pause that being said, it's now been more than a year and a half.
And I feel like people can only stay home. So many nights watching Netflix and eventually they Wanna get out and I do think people want alternative things like restaurants, especially when they're traveling an air bnb experiences are very popular amongst our guests were actually loved even more than homes uhm statistically from a <unk> standpoint, another word more guests leave a five star review for <unk>.
Variances in homes after they set so I'm very Boston this product, it's it's been gradually ramping back up and reopening we've seen a strong growth over the last couple of quarters and I'm expecting this to be a big area of growth over the coming you know five years or so so that's what we're seeing with experiences now with regard to our relationship with communities.
You know.
Let me just start by saying that.
Even before the pandemic, we worked with thousands of cities all over the World you see we creating this new category of travel and we had to work with cities to educate them and we're collaboratively with them to be able to really make sure everybody works best for these communities to give you a stat.
We have today collected $4 billion and collect into hotel occupancy tax where transit occupancy tax you can't collect hotel taxes out working with those cities and jurisdictions. So we've had really close relationships with them and what I've seen that last year is that the pandemic has actually been a bit of a reset for our relationship with cities and reset probably in a good way.
Because what we're seeing is a lotta city.
We're concerned with tourism in their market I've been different concern now now over towards my number of cities have concerns are under tourism the reduction of business travel fewer international travelers crossing borders going into big cities means that many of these cities and destinations have revenue shortfalls and just general travel shortfalls.
And so what what's happened is we've had a lot of cities, reaching out to us to collaborate and in fact, we've done 100 partnerships with destination of marketing organizations around the world and I think our new I'm flexible features where we can point demand where we have supply also means we can point demands of cities that want it and so I think.
This is a really exciting period for us to really renew a great relationship with cities all over the world.
Great. Thank you.
Next question is from Brian <unk>, Brian. Please go ahead.
Thanks, guys on on the crossword traveling open up we're just wondering if you could comment on lengths of stay transfer. Our our intuition is if people are going to get on a plane in the current environment, They probably want to amortize out across a longer stay but just wondering what you're seeing there and then second thing on.
On about the length of stay more generally.
You spoke to 28 days plus I'm just wondering if you could talk to what you're saying in terms of maybe a seven day stay becoming a 14 day in any transfer any thoughts on how the competitiveness of Airbnb increases verses hotels. Those there's one week stays become two weeks days.
Yeah, why don't I why don't I start with that very last question, Brian and then Dave I can hand over to you and you could talk a little bit more about cross border its impact on length of stay in just the growth of maybe weekly stays with what I think Brian's asking but let me start with this question of the competitiveness of Longterm States.
It's really quite interesting to think about how we started air Bnb I started the company when I was 26 years old with two of my friends in the category, we entered with hotels.
The the the incumbent industry, an industry that most people liked and travelers have a leather other options. If you were to try to stay somewhere for two weeks three weeks, a month or multiple month, and let's say you're staying somewhere other than the city you live what are your current option, there's not a lot of players doing this there's a lot of friction. So we think essentially the long.
The length of stay the more compelling at at the staying at home. It gets very expensive stay in a hotel for weeks at a time and the longer you're away from home. The more I think you wanted to be in a home you want a kitchen you might Wanna Backyard you Wanna go with Cook you just want to feel like your home and not not not not not like an outsider and so I think that this is going to be a really big opera.
Attunity for US and this is partly why I'm really excited about longterm stays or even stays that are for a week or longer if you want to talk about some of the stature thing.
Yeah, we were highlighted in on the shareholder letter that 45 per cent of her nights were from stays at least seven nights and then this is the trend that we're seeing is that the the length of stay continues to increase the number of use cases that people find working with air B D. In the same way that Brian just mentioned that system better.
<unk> way to travel some longer you're not gonna Wanna stay in a hotel room for 28 nights that those trends are continuing and I don't have anything specific to say about cross border and the length of stay directly related to that but just more broadly that the length of stay continues to increase and to the extent that it does it it creeps to air Bnb.
Great I appreciate it guys.
Thank you.
Our next question comes from the fate Con from trash Securities. Your line is now a pen.
Great.
Thank you.
Two questions.
Did you see any any impact on the Apple I understand is.
On your assertion that campaigns and then the second question I had is just around some noon as the news out of those.
The saw that show and then you continued to work on technology do musically has been onboard hotels, maybe just talk about where it says in your list of priorities.
Yeah, Uhm I could take both of those maybe.
Number one just an apple their iOS changes no we've not been any impact on air Bnb and that's not really the business. We're in with regards to.
Our efforts to invest in technology onboard hotels, let's just talk a little bit about our strategy with hotels.
Uhm.
Last year, we had to make some difficult decisions to put a number of initiatives pause like transportation and scaled back some others I'm one of the initiatives that we had to scale back a bit was our investment in hotels that being said hotels are still a very important part of Airbnb strategy.
We believe that people come to Airbnb, because we have something unique we have unique host the offer something you can't get anywhere else and so we think that the majority of people come near me correct to book individual host.
That being said, we want to make sure that people come to air Bnb. They always find a place to stay and sometimes we have network apps and we think that hotels are really great ways to fill in network gaps then when somebody comes to erbium sits airbnb. They can always find a place to stay hotel Tonight has been growing really really steadily in the last.
Couple of years I'm very excited about the progress and we're continually investing in this area now it's not as big a priority as our our core business of supporting individual house, but we're continually supporting them are continually investing in this area.
Maybe just just to follow up on that Ryan would be saying hotels on the corner and be any time.
I'm in the future.
<unk>, we will we see the losing what.
Would we be able to add some cool just Randy Oh, yeah, Yeah, Yeah, I mean, yes, and we have tens of thousands of all the terms now on air Bnb and I expect you'll see more in the future for sure and it's it's really just.
It's really just a matter of prioritization right now we're focused on the most perishable opportunities. The most perishable opportunities right now are scaling as quickly as possible to get as many hosts ready to <unk> to host as many gifts as possible and so our big priorities are recruiting host simplifying the guest experience.
Educating the world that would make them be different that's hosting and getting world class service to getting our service to be at a world class level. Those are our major priorities, but we are continually investing in hotels.
Thank you.
Next question comes from the line of Deep Hot Matthew Simon <unk> Free search Deepak. Please go ahead.
Thanks. This is zack on from Deepak just first time Edr's I know you kind of cold out that the primary driver. So far is doing this kind of make <expletive> uhm, but you also noted that you're starting to see some price appreciation in certain high demand areas. I'm. Just curious if you can kind of part of the sound a little further and is that trend kind of concerning to you in the context of.
Air Bnb longterm growth and then second Uhm just related to Covid I know, it's it's very dynamic and hard to predict but the restrictions seem to be generally easing, but we are seeing pockets of rising cases, and and some kind of impediment to travel demand do you see any tennis differences in in the restriction today and the impediments to demand behavior today versus now sick.
Or 12 months ago.
Did you want to do.
Sure, let me start with a a D. R. You know the trend that we saw in a D. R. Late last year. The increase in Edr was almost exclusively driven by mix and so that was the regional mix you know.
Urban Nonurban mix size of home and then what we saw earlier in the year is some price appreciation as a larger portion of the a D. R increase and that increase in a little bit further here in Q3, you know it kind of a peak coming for summer travel season, and then what we're seeing as I said in queue for is R.
Urban Nonurban mix size of home and then what we saw earlier in the year is some price appreciation as a larger portion of the a D. R increase and that increase in a little bit further here in Q3, you know it kind of a peak coming for summer travel season, and then what we're seeing as I said in queue for is R.
<unk> relatively stable with what they want to three you know even if he is elevated 80 hours again. The majority of the increase has been just on a relative basis due to mix. So there's really no change in the price where there is some price appreciation I think we still have a great value, we're still able to give people homes and stays that they <unk>.
I'm very valuable in terms of all the amenities to get you know maybe a larger place more amenities kitchen more bedrooms more space to be and so we think we continue to give a great value and so we'll continue to monitor it and be mindful of it but I don't think it's extra central threat to US and then the second question is.
Is just writing rising cases, any any differences <unk>. The pandemic I guess I think what we've seen is just a bit more resilience in guess being willing to travel around the world right. There's a little bit of there can be pockets of variation depending on what download shrank, we do in terms of.
Uhm opening up borders and uhm, but the general trend has continued to be more positive more up into the right more consistent and I think people even in the face of you know various strains of Covid continued to be wanted to travel and and they find that doing that I'm there'll be abused the best way to do it.
Great. Thanks have a color.
Don't mean I'll just add one last comment uhm, we're living in a really fast changing world, but I don't think we've seen the end of big existential changes in the world and it can't predict the future. The best thing to do is adapt to it and I think our business model is incredibly adaptable to whatever changes are to come.
[noise] next question comes from the line of Mark Mahaney from ethical all yes, I Mark paint proceed.
Thanks, a lot. This has been on for Mark Some loss 18 months you know Covid is allowed an airbnb really pivot their product priorities refocus on the core business as you look to next year do you anticipate your investment priorities to change somewhat you're gonna start focusing on stuff a little bit outside of your core business and then.
Second question, if I could just send a letter you talked about in relation to a pack just the short term rental restrictions as being somewhat of a drag on the recovery in that region are those new restrictions versus 2019, and how significant are they do you expect them to be a permanent drag. Thanks.
Thanks for the question mid day, if you want to take a pack and start with that and then I can be to talk about noon bathroom.
Yeah on a pet you know, we're not anticipating any short term rental regulation changes as being a major negative drag on our business over time, we're just mindful that the there can be some variation in what governments wanted to do especially during this kind of Covid Christmas time, and it varies by area and install them.
More restrictions and a and a pack of needed elsewhere.
And then.
On your question of new investment.
Here's what I would say I mean, we learned some very valuable lessons last year about focus I remember once I was in college and my teachers told me Brian you can do anything you want in your life just not all at the same time, yeah. We certainly learned that lesson last year, we had to scale back initiatives, but one of the benefits of all that we should we took our very best people we folk.
Some only on a few problems, including recruiting more host simplifying the guests journey, improving our Royal class service in educating the world about Airbnb and as we've done that we've not only reduce costs in the business, but we've actually been growing even faster and so this year has been a fear of a relentless innovation to perfect of course service nearly one in.
Innovation every 48 hours on a course service.
That being said you know we're gonna we're gonna we're gonna do new things Air Bnb, We created this category of travel and I think there's a lot more categories that we can create an air bnb and so we've done two releases. This year. We did one in May and one in November and we're going to do a couple more again next year and so.
November would not be the last time, you hear from US you'll hear from US again in the spring wearable introduced a summer release for the summer and we're going to have some really big new offerings as well and again the really big areas I'm excited about that we're currently doing short term stays I think we're realizing that we're just scratching the surface of this incredibly huge opportunity.
Homeshore and continues to grow long term stays with an entirely new category of Airbnb and I think now that people are getting comfortable crossing borders and get outside and getting gathering with other people experienced it would be a big opportunity. But this is just the beginning we have many more innovations in front of us and we will continue to use her creativity can design new possibilities for people.
Thanks, Brian thinks it.
We currently have nice that the question. So now has that type of to Brian Cheskey for any casing remarks.
[laughter] alright, well, thank you all for joining us today.
Just to recap everything you know 2021 for Airbnb has been a year of relentless innovation, we've launched more than 100 upgrade already this year and next week, we're gonna announce 50 more that's 150 upgrades innovations this year.
Our design driven approach means that we're constantly improving our service to adapt to this changing world.
And the World will continue to change because for the first time ever millions of people can now travel anytime anywhere for any length and even live anywhere on air Bnb and this is a traveler evolution. So we're just getting started we have many more innovation to share with you starting with some exciting announcements next Tuesday.
So thank you all for joining today and we'll see you next week.
This concludes today's coast. Thank you for joining and I Hope you have a lovely rest of your day you may now disconnect July.
[music].