In a little more than a decade, Airbnb (ABNB +0.73%) has transformed the travel industry. It has made home-sharing mainstream, and it has built a high-margin business in the process that was valued at more than $100 billion at one point.
However, according to many Airbnb users, the product seems to have deteriorated over the years. Complaints about excessive cleaning fees, chore lists, and poor value are rife on social media and elsewhere.
The rap on Airbnb seems to be that it used to be good value, but prices have gone up and hosts have gotten more difficult, and in many cases, hotels are a better option.
The viral tweet below seems to have crystallized the case against Airbnb, and plenty of others have said they're swearing off the home-sharing platform after a negative experience.
Decided to stay in a Holiday Inn instead of an Airbnb for an overnight trip and strongly feel, one hour after check-in, that there has never been a more luxurious experience in all of human history
-- Jeremy Gordon (@jeremypgordon) January 7, 2023
One opinion writer in The Guardian described Airbnb as staying with a cheap, uptight friend and being charged for it.
So how bad is the backlash against Airbnb? Let's take a closer look.
Images source: Getty Images.
About those cleaning fees
Travelers have long complained about Airbnb fees, and how total fees don't show up until you're ready to complete your booking. The good news is Airbnb has made a fix for that and now offers guests the ability to see total prices up front, though not all of its guests may be aware of this.
However, there are also some signs that hosts are pushing back on the upfront pricing and have seen fewer bookings because of it. The total pricing feature should help solve most of the complaints about cleaning fees, but the chore lists may be more difficult. CEO Brian Chesky has said that guests shouldn't have to do unreasonable chores, but the company has never made any effort to codify what a reasonable chore is, or give guests a way of sorting through listings to avoid chores. Often, guests might only discover that chores are required once they arrive at their stay.
Much like some listings have Superhost badges, Airbnb could use something like a no-fuss badge on listings to indicate that hosts don't require any chores, or anything unreasonable, but the company has seemed reluctant to tackle this problem thus far. A founding principle of Airbnb is that hosts and guests will essentially police themselves through reviews, rooting out bad actors, but reviews have proven to be a poor method of accountability.
Guests and hosts tend to give each other good reviews even when they didn't have the best experience because they don't want to get a bad one in return. It also feels awkward writing a bad review for someone after you stayed in their home. It could make sense to rethink the review process or find new ways to add accountability to the platform.
NASDAQ: ABNB
Key Data Points
Airbnb's growth is still strong
If Airbnb's brand is weakening, there's no evidence of that in its numbers. Revenue jumped 29% in the third quarter to $2.9 billion, and the company reported $1.2 billion in net income, though the third quarter is its seasonally strongest quarter.
Demand soared in 2022 as the travel industry bounced back from the pandemic, but the company's rapid growth doesn't mean it isn't losing customers through some of the issues discussed above.
Airbnb's brand is its most important asset, and the company needs to protect the experience that guests have on its platform. Although it may not sit well with hosts, the company is better off doing things like upfront pricing and pushing back on unreasonable checkout tasks, or guests will go elsewhere -- and that will eventually sap the business.
Historically, Airbnb has been reluctant to set a standard for what guests should expect from a rental. That makes sense, as there are so many different kinds of Airbnbs, but most guests want to avoid excessive fees and the hassle of doing checkout tasks. Expect Airbnb to do more to respond to those complaints to help preserve its popularity.
The good news for the company is that it's still growing fast, even as there's room for improvement. If Airbnb can solve the most common complaints about it, its competitive advantages will grow even stronger, giving the company more long-term growth opportunities and its stock more upside potential.
