With Travel on Pause, Airbnb Looks to Long-Term Stays

Faced with its toughest test yet, the home-sharing platform is looking to stays of 28 days or more

Airbnb logo on a calendar
Longer-term stays accounted for one in seven room nights in 2019 on Airbnb's platform.

Key insights:

For a brand that started out renting air mattresses, Airbnb’s business has grown substantially. It’s best known for its accommodation listings, ranging from an apartment in Downtown Brooklyn to Barbie’s Malibu Dream House. In recent years, it’s also developed an experiences business, which sends travelers on activities like accompanying cattle herders in Kenya or stargazing in California’s Death Valley.

Now, in the wake of Covid-19 devastating the travel industry, the “home and more” sharing platform is taking on a new role: landlord.

In April, after announcing new investors in the company, the brand made a passing mention that it would be focusing on what it calls “long-term” stays of 28 days or longer.

“From students needing housing during school to people on extended work assignments, Airbnb is a place where many have found longer-term housing. In the future, dreams of living in another community will become a growing reality—in homes that come with the benefits of Airbnb,” said the company in the announcement.

Although Airbnb declined to participate in an interview, it did tell Adweek that this shift had been in the works before the Covid-19 pandemic stopped most travel. The brand currently touts more than 7 million homes available on its platform.

A couple of days after its initial announcement, the company put out another statement reiterating the need for this sort of service due to the coronavirus outbreak.

“People are turning to Airbnb for long-term stays because they are looking for ‘primary’ housing that doesn’t feel temporary or transient, including six-nine month stays for work, students living somewhere for the nine-month academic year, [and] housing for people already living in that community,” the statement read.

So far, pivots to safeguard the brand from Covid’s impact include bringing its Experiences platform online and allowing its hosts to offer their empty rooms to frontline workers responding to the pandemic. It also has cut its $800 million marketing budget and boosted its cleaning protocols, following in the footsteps of many of the largest hotel brands.

But, like its competitors, these changes haven’t staved off the inevitable layoffs and furloughs resulting from a severe drop in both business and leisure travel. On May 5, Airbnb co-founder and CEO Brian Chesky sent a letter to staff announcing that roughly 25% of its workforce would be laid off, albeit with generous benefits and equity, plus 14 weeks of severance.

Long-term stays are a whole different industry

Although too early to tell what effects the shift to long-term stays may have on the brand, Airbnb said its decision was based on behavior it was seeing in reservations. In 2019, one in seven nights booked on the platform was for a long-term stay. Already, more than 80% of its hosts accept longer-term stays; about half of those offer a discount for stays of longer than a month.

To help with the new focus, the platform retooled its onboarding process for hosts to make it easier to turn a short-term stay into a long-term stay. It also will allow guests to select Monthly Stays when looking for a room. Airbnb usually charges hosts a fee of 3% for most rooms, and guests pay a fee of typically under 14.2% of the booking subtotal. Fees for longer-term stays are lower.

“There’s an apartment lane and a hotel lane, and they’re sort of straddling the middle of it: a hybrid of a classical hotel and an apartment,” explained Chekitan Dev, a hospitality branding professor at Cornell University, mentioning the brand’s extension into business travel. “When Airbnb first started, its unique position in the marketplace was leisure, long stay and local. Over time, they started spilling into every other domain.”

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