Airbnb Makes a Play for Direct Bookings

0:23Brandreth Canaley: Good morning. Happy Monday.

0:28Michael Goldin: There we go. Best day of the week. We're back. Last kind of week of summer because next week's the holiday and it kicks into fall mode, football season. Yeah.

0:41Brandreth Canaley: All of my friends were, you know, getting together to form their imaginary teams. That's all I've been hearing about. When's the last time you've made an imaginary team, Michael? I haven't done it in 10 years.

0:55Michael Goldin: uh probably two or three years ago okay i'll say three yeah but i'm intrigued the benefit of doing one is then i'm actually like kind of invested in games that i don't care about at all uh but that's exactly why i don't do it then then i also just realized i don't really care about it good weekend everybody get like riled up about it that's

1:23Brandreth Canaley: one of my favorite things when someone's like this one person on this one team like fell down

1:27Michael Goldin: and now everything's ruined rage tweeting like why'd you get hurt i get my number one pick exactly yeah we had a soccer season start for the kids this weekend so both kids uh our five-year-old is first season and both of them scored a goal and won their game so we had some some happy little soccer players this weekend celebratory pizza all right all right nice yeah we had a great weekend uh little three-year-old birthday party at a gym where they all got insanely tired and i was carrying a kicking screaming baby out and then went swimming uh had some friends over and grilled out So good, good old end of summer weekend.

2:16Brandreth Canaley: Very nice. I went to, so the ICA, the Institute of Contemporary Art in Boston is in the seaport on the water, like really beautiful building. And during the summer, they have these events called Vinyl Fridays. So different DJs from the city like play out on like this incredible backdrop. So friends of ours were DJing on Friday and went. And it's just like, it's a really cool use of the space. And you get into like, you can also go and like walk around the gallery if you want. And so that was really fun.

2:45Michael Goldin: Jamie, Brandy is so cool. She has DJ friends. I can't say the same. My one DJ friend is Valerie on our team at AirDNA. And like, when we interviewed her, like, oh my God, you're so much cooler than I could ever be. And then she like, oh yeah, DJ on the side. I'm like, oh yeah. Now I've got a DJ friend. There you go. Wow. Now I feel like a loser.

3:15Brandreth Canaley: By association, you have friends who have friends who are DJs. So there you go.

3:19Michael Goldin: Good point. All right. Back in the fold.

3:21Brandreth Canaley: Back in the fold. Well, speaking of super cool, recently, last week, the Skift Idea Awards were announced. And we had a lot of winners in our circles.

3:33Michael Goldin: Two of whom are on the show. Yeah. again, I'm left out, but that's all right. Jamie, congrats. Thank you. That was a fun win on the data provider, uh, um, and innovation award. And then Brandy congrats with moving, moving, moving mountains.

3:52Brandreth Canaley: Oh yeah. You know, I can't take credit for this personally. This is Chad and his team and it's for the over the edge as the ultimate like ski chalet estate. And it's pretty crazy. I mean, every time I see a new home will pop up that I see for moving mountains, and I'm always like, these are just so incredible.

4:12Michael Goldin: Hopefully someday I'll get to stay for a ski vacation.

4:15Brandreth Canaley: But yeah, it also just speaks to the team. What a great job they do. So it was fun. What a fun announcement.

4:22Michael Goldin: Yeah, and there were a few other winners in the short-term rental space, one of them being Guesty. Congrats to that team. We're excited for the conference in two weeks.

4:34Brandreth Canaley: It's crazy. Yeah. If any of our listeners are going to be there, let us know. Will, Michael and I, and Jamie, are you flying over to the whole squad? So come find us. Let us know if you're going to be there. We'll be milling about.

4:50Michael Goldin: And you don't even have to present this here, Jamie. I'm doing a round table actually on Wednesday morning. I'm done even pricing. Yeah. Oh, nice. So the skip team did rope me into doing some work.

5:06Brandreth Canaley: Yeah, that's, well, you know, it's going to be, it's gonna be really fun. I'm so excited to go to Madrid. Brandy and the boys go to Spain part two. I'm pretty pumped.

5:16Michael Goldin: Go to Spanish speaking country part three.

5:19Brandreth Canaley: Yes, exactly.

5:20Michael Goldin: Blindly following Brandy around.

5:22Brandreth Canaley: Yeah, it's a lot of trust.

5:24Michael Goldin: Don't get stuck in an elevator, Will and Brandy. Not this time around.

5:29Brandreth Canaley: That was a once in a lifetime.

5:31Michael Goldin: Story for another day.

5:35Brandreth Canaley: Awesome. So yeah, if you're going to be there, let us know. We'd love to see some of you guys in person and excited to see the guest team there as well, obviously. And sorry, I'm going to the SCIF conference. I'm not going to guest conference. Sorry, I got a little confused there. My next trip is SCIF. Yeah. And we'll see you there. Michael won't be there, but it's yeah. B2B conferences. I was like, okay, it's time. It's that time of year.

6:01Michael Goldin: It's that time of year. Gone all fall.

6:04Brandreth Canaley: Exactly. Exactly. Well, before we jump in, we have some spicy topics today. I'm sure if you've been on LinkedIn in the last couple of days, you know what we're going to talk about today. But we want to give a shout out to our sponsors at StayFi. StayFi helps short-term rental operators build direct guest relationships through branded Wi-Fi portals, email marketing, and guest data tools that turn one-time bookers into repeat guests. So start growing your direct booking revenue today at stayfi.com slash goodmorninghospitality. And that actually kind of feeds into some of our second topic of today.

6:33Brandreth Canaley: But first, we've been talking all year really about how Expedia is the darling in B2B bookings, but it turns out we might not have had all of the information. Booking is actually leading in room nights. And there's just a little bit of kind of how things are reported amongst all of Booking's companies that maybe wasn't giving us the full story at first glance. So I'm going to toss this to Jamie. What are your thoughts about this? One is that it is an estimate from VTIG. Like Jake Fuller is an analyst. Like he's trying to tease it out from the 10Qs. So, and there's some assumptions baked in there.

7:16Expedia could be slightly larger. Booking could be slightly larger. They're both probably around the same size. I think what for me is like for Expedia and why B2B has talked about so much with them is with BTGI's estimates, our BTIG's estimates, it's 40%, almost half of their overall business. you look at booking, like even if it's close to 200 million, it's still only 15 % of their business. So like just fundamentally for Expedia, like why B2B is so important is because it drives such a large share of their business. And for booking, like B2C for them is over a billion room nights over the past year.

8:02Like that's still over double Expedia's entire business. So yes, like maybe slightly larger for booking, but for, and booking's just so such a larger company than Expedia in total. Yeah.

8:19Brandreth Canaley: And I think part of the messaging is like, okay, Expedia has just been growing their B2B so much that that is like, is booking like seeding some of that ground? Are they losing going? Like, is this one of the things where the incumbent kind of gets caught flat footed, that kind of thing.

8:35Michael Goldin: Yeah, I think ultimately having competition in the space is good. You don't want one company to be dominating the entire landscape. So learning the fact that booking in Expedia could be unequal or close to equal ground is always a good thing. And it makes sense too, because of the credit card points I use, one platform uses booking and one platform uses Expedia. So I don't know why they try and hide numbers in one direction or Expedia exposes it in another. But in the end, I think ultimately it's good for all of the suppliers. I think a lot of the hiding also is just like you don't want your competitor to know what a big piece of the business is and what the opportunity is for them to potentially take.

9:28Brandreth Canaley: Well, and they had the three competing brands within booking that they are now combining under partnerships. So they're like, I think a little bit was hidden through, you know, hidden through that. Acquisitions. Yeah. Yeah. Cool. So, you know, this is, again, just more, I don't know, information, different ways to look at this. It's, you know, I guess we'll continue to see how they battle each other out for this, you know, B2B pie. And as long as I don't know, all of my credit card stuff keeps getting funded through them. I don't really care which one comes out on top.

10:04Michael Goldin: Completely agnostic.

10:05Brandreth Canaley: Completely agnostic. We have a really juicy debate, potentially some Jamie and Brandy rants today. But before we jump into that, we want to give a shout out to our sponsors at Bilt. They're helping restaurants and hotel F &B teams better understand their guests and create more purse lines experiences that drive repeat visits. So if you care about loyalty and guest experience, definitely worth checking out. Head to joinbilt.com slash GMH. So if you are in the short-term rental world or the vacation rental world and you have been on LinkedIn in the last 48 hours, you have definitely seen a lot about Airbnb's new feature of promoting or a pilot basically of getting hosts to provide their direct booking links that send guests back to Airbnb and in exchange getting a lower commission rate.

10:53Brandreth Canaley: So everybody has been all in a tizzy about this. Of course, everyone loves to get fired up about it. But what are your takes? Michael, we'll go to you first.

11:05Michael Goldin: Yeah. Makes total sense for Airbnb. I get it. The long tail doesn't have direct bookings. They typically rely on Airbnb. Doesn't make any sense for anyone with a company. I don't know, say 10, 20 homes or more, because you'll want to start owning your own guests. And in this model, Airbnb still keeps the guest. And I think that's what a lot of the real or faux outrage that we see online is coming from is that now they're creeping into your direct booking site and you're losing those guests. So I think it's the right move for Airbnb. I don't think it's the right move for any professional management company, but for a onesie twosie operator, if one of your friends wants to book, then you still get some benefits like air cover.

12:02Michael Goldin: What's interesting to me is that they would test it at 6 % and at 10 % at the same time.

12:10Brandreth Canaley: Wouldn't you be kind of pissed if you're in the 10 % cohort?

12:13Michael Goldin: You'd think you'd start at 10 and then run that test and then start at 6. But anyway, the cat's out of the bag and now people know there's two tests going on. Jamie? Yeah. And in general, I think tests like this are great. And I actually love it for individual hosts. It's still like 60 % of listings in the US are managed by hosts with fewer than five listings. I think in general, like if you got that many listings, you and let's say you're in an urban area, there's not a lot of repeat bookers. There's like there's not a lot of incentive for you to create a direct booking site to invest that money.

12:59A lot of I mean, it is not cheap to go out and create your own channel, your own funnel to drive bookings to yourself. And unless you've got a lot of listings to sort of amortize that cost over, like it probably doesn't make sense for a lot of the individual hosts to be able to do that or to do that. And we've seen the data is a lot aren't. So now what you have is Airbnb testing away. And you see it on the Facebook groups all the time. You see it on Instagram of like, you want to promote your listing. You want to share a link for them to be able to book. So now if you're going out and promoting your own listing and you're getting that guess that Airbnb is going to give you a lower fee because of it.

13:43I think that's excellent. It gives an incentive for hosts then to go out and start sharing their links and hopefully drive more bookings to your property as opposed to a guest just dropping on Airbnb and having to find your listing. So I mean, a big part of Airbnb's expense is marketing. And now it looks like they're willing to share that expense with hosts that are going to do some of that marketing for them.

14:08Brandreth Canaley: Yeah. I think that this is like, if you were a host that was putting your Airbnb listing, like in your TikTok links or like Instagram links anyways, this is just a way of, you know, decreasing your costs. And, you know, I think where we see it a lot in our bubble is it's a lot of professional managers who are enraged by this. And I get it because if it's like, I'm not going to put my direct like booking, it's like, it's not for you, you know, that would be crazy. If you were like, I'm going to spend my own direct marketing dollars and then send them back to airbnb obviously that is like not the intention

14:41Michael Goldin: or shouldn't be the intention do you guys know what the other platforms call the bringing your own guest b2b oh is this is this airbnb's first b2b play jamie

15:00Michael Goldin: oh sure yeah let's call it that all right wow they they're dipping their toe in the b2b water

15:08Brandreth Canaley: yeah that's we can call it that it's um and i know you know there we had some chatter about this uh earlier and i'll be the one brave enough to wade into these waters um but there we always have a big focus on your direct website. And I think like Michael said, if you're an operator of a certain size, it does make sense to give that energy, that capital, that time to building out that brand or that website. But if you're a single operator, it doesn't make a ton of sense to do that. And this could be a way of lowering some of that cost. Paul Manzi just commented that it's another cold shoulder to the professional operator.

15:53Brandreth Canaley: And I think we just have to be a little bit more like, yeah, we're not, we're not the ones that are going to get the attention. Like,

16:02Michael Goldin: you know, it's, I'm curious, did any professional operators get this email?

16:07Brandreth Canaley: Yeah, that's, that would be interesting. Yeah. And I could see how it could rub some professional operators the wrong way if they got it. And we're part of the test of like, you want me to do what? Like, no, like, you know,

16:22Michael Goldin: give you all of my guests and a higher and a 6 % commission. Yeah. Yeah. If you are a professional manager and got that email, we'd love to know. My guess is it's segmented by some sort of unit count on Airbnb, but we'll find out. I didn't get it. I was, um yeah you're not in the beta i'm not in the beta oh i thought you were in

16:53Brandreth Canaley: but i i also some of the comments i mean first of all i mean i kind of it's the comments have been fantastic to read through um and so um i love i it's i mean it's nice to see that people are they are passionate for sure but some of i think part of this just feels like airbnb also we always talk about they're basically a PR company, a marketing company. That is like what they really excel at. And now they're deferring some of that work to their hosts. I saw some of that kind of like tension in the comments. Like now we also have to do their job for them. And it's like, yeah, I can understand the sentiment.

17:33Brandreth Canaley: I understand after all these, like every year, it seems like something comes out and you're like, oh, this is another thing that is pro Airbnb and kind of getting at the host. And there's always been that tension. So I think that anytime something like this comes around, people are just naturally like, how is this screwing me over? Which I get. Yeah. I'll say again, I love getting rewarded for something you're already doing. So if you're already sharing your Airbnb link and in driving bookings to it, you're going to see less costs, significantly less costs because of it. And if you're not, and you don't have your own direct booking site, then this is now an incentive to go out and do it.

18:13And if Airbnb can sort of find those incentives that can drive additional bookings onto their platform, like it's a, it's a, and could potentially be a growth loader for them. And if someone doesn't want to share their direct booking link, like, I mean, and wants to keep doing it the way they're doing, then no harm, no foul.

18:30Michael Goldin: And so they, they probably have tracking data too, of who's shared the link and who's gotten bookings through it and let them be part of the pilot or not let them be part of the pilot you want it to be a pure av test and then and we test changes in pricing all the time on our product too it's like and and different prices let you then draw the elasticity curve of like okay how much do we need to and reduce the fee to actually drive people to share the link. Like it's, it's all, it's all fun and testing. I love it.

19:07Brandreth Canaley: Yeah. I think this also comes back to a conversation that we've had before and it kind of weaves its way through the industry of how much cheaper, if at all, is your direct guest, you know, when you factor in all the costs that go with it. And so if you have an operator who doesn't like, they just want to share their calendar between Vrbo and Airbnb and they don't want like, you know, diversifying is always good. I think we would always recommend not relying so heavily, even if you are a onesie twosie, not just being Airbnb dependent. But I think when we as professionals have to look at it, there are costs of having your direct guest does cost something.

19:47Brandreth Canaley: And so this is another way of giving a different type of operator a little bit of financial relief and I think maybe living more in the reality of how their business operates.

19:58Michael Goldin: I'm thankful for another topic to discuss during conference season besides just AI.

20:05Brandreth Canaley: You don't want to talk about AI for a couple of months?

20:07Michael Goldin: Thank you for throwing some fodder to us Airbnb.

20:11Brandreth Canaley: Yes, right. Is that why you're not coming to Verma this year, Michael? You don't want to talk about... I'll be there.

20:19Michael Goldin: I'll be there. Yeah, we're going. So just can't do Skift because the back-to-back with Guest Eval. Brandy's bolder and braver than I. Yes.

20:32Brandreth Canaley: Going to need a real solid nap after that.

20:36Michael Goldin: Sweet. So Paul had a great comment that leads us into our next topic. It seems like in short-term rentals that we're fighting two uphill fronts. Google is still not prioritizing vacation rentals in AI mode. and Airbnb is trying to take ownership of the guest away. Brandy, kick us off.

21:01Brandreth Canaley: I do think that I can understand where the sentiment is coming from, where it feels like all of a sudden there's a lot happening at a very quick rate that is confusing at times. You have the discussion of like, is AI going to democratize the industry, or are the OTAs just going to really squash us once and for all? And then you have a move like this, which even if it's not directed at professional managers, seems like another thing that you have to absorb, digest, deal with. And so I totally understand that sentiment. And it feels like you're just constantly having to fight on all fronts. And also, this is only one side of the business, right?

21:48Brandreth Canaley: This is just your marketing side. It's not even dealing with the core product, which is your operations. And that's the part that's also getting more difficult, is labor intensive, is expensive, and is the ultimate product that the guest is purchasing. But now a good portion of your company's time has to be dedicated in like, how am I battling against Expedia and ChatGPT for those three listings that pop up or on the Google page, like how do I get myself into the AI overview? And that's like, that's not what a lot of operators are like good at, right? Because they're, they became operators because they're providing this hospitality service.

22:30Brandreth Canaley: So I think it does, I really understand why it feels overwhelming that all of a sudden, like every couple of weeks, there's something new that feels like you have to battle against and that there are companies or other people that have more knowledge of that topic and more resources that you're kind of always playing catch up and that distance between you and them or you and the next topic or whatever it is, is growing and growing and growing and you don't know in which direction. So I can understand the like anxiety or the frustration, that like sentiment that seems like it's brewing. Yeah.

23:02Michael Goldin: I think if you're a professional operator, you don't need to worry about the Airbnb topic we just discussed because it makes no sense for you.

23:11Brandreth Canaley: But if you want to get spicy about it, let us know.

23:14Michael Goldin: Drop comments. The Google comment is a more interesting one, Paul, that they're not prioritizing vacation rentals in AI mode. They will get around to it. They've just launched with a few of their integrated partners, There's Booking.com, Choice, Expedia, Hilton, IHG, Marriott, all of the big names with aggregated supply. I do suspect there will be ways to get vacation rentals into AI mode. It's just a matter of time. But we also have to accept it's far more fragmented than tying in with Booking and Expedia to launch and to test it. they've launched and tested booking on Google in years past. And then they ultimately killed it because adoption wasn't there.

24:11Michael Goldin: I suspect this time around, it'll be much more adopted and then it'll expand. But for now, I think it's just a lesson of patience and let the test go well. and then we can all get our inventory bookable on AI mode and then also in the other LLM channels.

24:33Brandreth Canaley: Well, I think it feels like if you let these tests go well, then you've already lost the ability to get in there. You don't think so? And I'm not like I don't hold that conviction strongly, but I do feel that some of these operators, like the, obviously the big players are just continuing to amass advantages that feel like, because this isn't like a, this isn't the quality of your product play, right? This isn't a comment on how nice your homes are. This is like how technologically advanced is your business and how much money do you have behind it? And I think that that feels a little bit, I don't know, that feels daunting.

25:15Michael Goldin: We're all dreamers, Paul. Did you guys play with Google's AI mode on travel stuff. And if you've been using Google products for a long time for booking travel, like Google hotels, Google flights, all these things, like it does feel like they're like, it's all sort of pulling together into a unified stack of like, Oh, like I love this view from Google flights. Now, like as I'm chatting, I'm getting it like, Oh, I can track this price. Oh, I can see this view of like points versus um dollars to make payments like it it feels like it's all finally coming together into one mode and like if that's what it takes for google vacation rentals to finally like show up in the right ui of like it never felt like it could compete with hotels on maps and like i'm in the right way so i don't have any hope for google vacation rentals i mean i've sort of written that off years ago.

26:17I was hopeful. I think like everyone, the first year Google was like at every event there at Verma and like, oh, now they stopped coming to everything. And it's like, they just launched it and then disappeared. Great.

26:30Brandreth Canaley: And when you asked, how do I connect my properties to this? They were like, and I was like, sick. Okay. Yeah.

26:41Michael Goldin: Maybe it is hopeful and dreaming, but I don't think this test will last very long. I think they'll push it forward pretty quickly. And then there will be paths in and it might not be as easy as it is for some of these launch partners, but ultimately they want the aggregated supply. Google is still a massive data company. They sell lots of ads. They want competition on their marketplace. I don't think it's going to last for too long, but we'll see. Let's find out. Yeah.

27:18Brandreth Canaley: Well, it's, yeah, I, it's, I'm curious to see how these competing models are going to try to get like specifically, specifically from the travel side, which one's going to end up being the one that everybody gravitates towards. And, you know, it's the Google seems to have been like kind of on the back foot for this, but combining all these views is really interesting. And Paul says Google's actually done a bit of work over the past 60 days and getting more rental inventory aggregating. So good thing we have Paul paying attention to what Google's doing on a daily basis and the testing. So we'll see.

27:54Brandreth Canaley: Maybe we'll have more success this time around with Google VR.

27:57Michael Goldin: Maybe we'll have Paul on the show to fill us in on his insider baseball over here.

28:02Brandreth Canaley: Yeah, exactly. Well, great episode. And I will say our rants have become much more tame as our careers have gone on. Maybe because I'm not in the operations day to day, I'm not filled with as much rage anymore. It's less personal. Yeah, exactly. But what do you guys have coming up? What's in the week ahead for you? Michael? uh i'll start we yeah we've got our big product launch i think it's tomorrow or maybe wednesday yeah so launching finally in deep into dynamic pricing so adapt is here finally out of beta

28:44Michael Goldin: beautiful well you're you're calm before the storm uh has has ceased you're in it now uh this this feels like for me the last uh the last week of calm before the storm the the chaotic fall season kicks in. So I'm excited. It's, uh, it's always very energetic, inevitably going to get sick once or twice from various flights and time changes, but that's all right. It's fall.

29:10Brandreth Canaley: So we'll push through. B. Yeah, I'm, um, I'm heading back up one more time, uh, to the Adirondacks this weekend. Uh, we have to like take the dock in and we're redoing our kitchen. So I have to go and like take all the stuff out, but, um, nice to get one last kind of swim in the lake before the season comes to an end. And yeah. And then before, before conference season starts, I'm, um, I, you know, it's funny. I like, I am excited. It's going to be, it's like fun to see all your old friends again. And I think we have some really exciting panels that we're doing. Um, it's great that this kind of season, there's been a lot of really fun opportunities for interesting conversations.

29:47Brandreth Canaley: So I'm looking forward to that. Well, thank you everybody, including Paul as always coming in hot with the comments. Thank you for listening and tuning in and we will see you all next week.

30:25Thank you.