Airbnb’s average home prices have risen, so it’s now refocusing on rooms to provide users with more affordable alternatives.

Airbnb started with the idea of ​​renting out extra beds and rooms in private homes to individuals as an affordable alternative to hotels, but as it has scaled up, it has spent years moving up the ladder, evolving into a broader platform for any private accommodation type, with a heavy emphasis on travelers taking entire houses, not just rooms. That helped the company post its first profitable year in 2022, but there’s a looming problem: Airbnb homes are becoming more expensive to rent, with average prices rising. 36% since 2019 — and with the current state of the economy, travelers are once again looking for more affordable alternatives. So today, Airbnb is changing tack: It’s bringing out a new option for individual room rentals, once again making it a more prominent part of the search stream for would-be travelers.

“Everyone is talking about the economy. And, you know, we know that people want to travel,” co-founder and chief strategy officer Nate Blecharczyk said in an interview. “We also know that affordability is on people’s minds. And that is why we believe that the rooms are, once again, very relevant”. He added that 300 million guests are expected to use Airbnb this year.

Airbnb said it has about 1 million rooms listed on the platform right now along with its entire home inventory. Now, to help you find those individual rooms, a dedicated search category has been added; And from our own experience, it seems the company’s search algorithm is also driving more options for private rooms as the default in city search results.

At a time when people are looking for more affordable options, Airbnb said that more than 80% of private rooms are under $100/night, with an average room rate of $67/night. And perhaps as a carrot for travelers who may not yet be sold on the idea of ​​staying in a house with complete strangers (probably one of the reasons Airbnb, as it’s scaled, pushed the idea of ​​entire houses instead of rooms), is making some of the “private” features more prominent.

Now, you get more details about the privacy status of these rooms: would you have a shared or separate bathroom; if there is a lock on the door; information about shared public areas; and who else might stay on the property.

The new private room experience is being rolled out as part of the company’s regular semi-annual product release cycle. The room upgrade is probably the most notable of these: it speaks to a new on-site experience, and also underscores how the travel industry is trying to get the right size at a time when people definitely want to travel again. , after the peak. -Covid-19, but they are also aware of their account balances and broader economic issues.

Meanwhile, the largest version has no less than 50 new features and updates to existing features.

Among them are more tweaks to improve transparency about a guest’s stay, both from a pricing and rules perspective. These are being implemented to better compete with hotel bookings, where users are not charged separate cleaning fees, nor are they expected to complete a long to-do list before paying.

To that end, it displays the total price: which was first introduced last year – will be rolled out more widely across Airbnb’s footprint. Prices are shown here before taxes, but including other charges, such as cleaning fees. Instead, hosts can see how much guests are paying after taxes, so they can adjust their rates accordingly to fit their property into certain set price filter ranges when users search for places.

Additionally, to address payment complaints, Airbnb updated its host app with a set of basic, fixed instructions, such as returning the key, throwing out the trash, and turning off the lights. Hosts can add any other specific requirements, and guests can provide feedback on the checkout experience.

Along with the company’s new focus on rooms, Airbnb is also turning its attention to improving the long-term stay experience, a growing segment for the company. Blecharczyk said that about 20% of the nights booked are part of a longer stay (28 days or more).

The travel platform will start charging lower service fees for stays longer than three months. He did not expand what is “less”. In addition, the company will allow US consumers to pay by bank transfer for stays longer than 28 days.

On the financial services front, Airbnb has partnered with Klarna to allow users in the US and Canada to request four interest-free payments over six weeks. Additionally, US users can use this feature to pay monthly for reservations over $500.

In March, Bernstein sent a note to his clients with a positive outlook on Airbnb saying that more than 90% of listings on the platform are posted by individual or small-scale owners. The analysts added that most of these small-scale property owners use Airbnb exclusively, giving the service an advantage with its uniqueness.