Airbnb’s Chesky Talks Icons, Paid Memberships, and Who Benefits From His Billion-Dollar Payday: Full Interview

Airbnb’s Brian Chesky has entered his next innovation era. He sat down with Skift this week at a product event in Los Angeles for a wide ranging interview on AI, loyalty programs, Airbnb for corporate travelers and his billion-dollar pay package. We also talked about the company’s launch of almost a dozen immersive, experience-based homes that they’re calling ‘Icons.’

The Icons build off the overwhelming success of the Barbie house last year – which Chesky notes got hundreds of millions of impressions on social media and over twice as much attention as the company’s blockbuster IPO.  

These houses won’t be a classic revenue generator for Airbnb. They’ll either be free or low cost to guests – and are meant to act as an alternative to advertising. 

More importantly, Chesky calls them a “gateway” into the experiences category, something Airbnb has been trying to break into for some time. He stressed Icons isn’t a traditional business, but “more like a really cool thing we’re doing, but it’s a stepping stone to where we’re taking Airbnb.”

The Up House, Airbnb Icons

Chesky also opened up about overpromising to Skift last year on the timing of Airbnb’s AI revolution. The possibility of a paid Airbnb loyalty program with an Amazon Prime-like membership structure. The tension between Guest Favorites vs. Super Hosts. And what he is doing with his potential multi-billion dollar pay package. 

A partial transcript of the interview is below. It has been edited for clarity. 

Kopit:  You said last May that in a year’s time we would see a whole new Airbnb – and AI would be at the center of it. ‘Icons’ obviously isn’t AI driven. It’s almost completely the opposite. It’s very front-of-house. So have you changed your thinking there?

Chesky: No, no. We’re going pretty deep on AI. I think we made a really important acquisition with GamePlanner. We have the founder of [Apple’s] Siri on the team. We’re bringing on board great talent.

The basic idea is, eventually, we think the app is going to feel more and more like a concierge, that’s going to get to know you, learn about you. We’re starting with customer service. I think that’s the best place to start. So we’re working on AI-powered customer service that will augment the agents or take some tickets off their hands. So it’s going well but yeah, we’re not ready for a new app. 

[Chesky starts looking through his phone] Is there a single app in the world that has been transformed by AI, like, generatively? No, there’s not. There hasn’t been one yet.

So it’s all taken a while. I mean, basically, the way I think about it is you have the models and a lot of vision models, but the application layer, like let’s just take our phone: Go through the apps and point to the ones that are totally affected by AI.  People say, Oh, the algorithm of TikTok – that’s pregenerative. That’s not a generative interface. So I think that it’s taking a little bit longer for a lot of companies. But I think I’m as bullish as ever about it.

Loyalty: Looking At Rewards and Paid Membership

Kopit: When I flew here yesterday, I flew American. I got points. I’m staying at the Marriott downtown, I got points. You’ve talked a little bit way in the past about having a loyalty program for Airbnb. Are you going to have one?

Chesky: Probably, eventually, we’ll eventually have something. But I don’t think it will be, … it definitely won’t be a points program. I don’t like those. I think I’ve said repeatedly that the best loyalty is people loving your product and the best thing we can do to get people to come back to make sure the stay they had was great.  

I do think there’s a number of things you can do. 

Number one, the product needs to be awesome, needs to be great. Number two, I think the product can be more personalized. And we can get to know you. So every time you use us, we can learn about you, understand you, know you. 

You don’t need a loyalty program to do that. 

I mean, you know, a lot of hotel companies have loyalty programs because otherwise, you can book the ticket anonymously. They don’t even know who you are. So a lot of times those loyalty programs are just even to get your account information. You need an account to book with us. 

But I do think, down the road, there could be two different possibilities. One is, do you get rewarded the more you use it? I think that’s a fascinating idea. I don’t know if a subsidy is the right way to get rewarded. 

And I think a paid membership is also interesting.

Kopit: So a paid membership for Airbnb?

Chesky: Like a [Amazon] Prime. We’ve been looking at it for a while and we think that’s also compelling. So those are the two models. But one is quite literally errotive to your financials, right? It’s quite literally a subsidy. And so you’re taking your most valuable people and you’re making them a little less valuable. And the other is, like, you get a little more money, and you can provide an even better service. So they’re both interesting. What’s not interesting to me is points.

Corporate Travel: ‘Guest Favorites Are More Reliable Than the Sheraton’

Kopit: What about corporate travel? Any change in your thinking on that? Have you done anything about getting road warriors, like all of us, to come and use Airbnb?

Chesky: There’s making the product compelling for corporate travel and then there’s selling to businesses, enterprise.

Making the product compelling to business travelers is very interesting to me. 

And we have Guests Favorites, which have been hugely popular – 2 million the best-loved listings. Since we launched that product, we’ve seen a huge shift towards higher quality listings. And I think the reason I bring this up is business travelers especially have a lower tolerance for error. They’re kind of in and out. 

If you’re going on a week-long vacation and you have a snafu the first night and you are on vacation, you have all day, maybe you can deal with it. You’re on business – you’re in and out, you don’t have a second to spare, you can’t deal with a problem. So you need that reliability. 

Kopit: ​​Do you stay at an Airbnb when you travel? For business? 

Chesky: Yeah. I do. And I love it. 

Kopit: I never would.

Chesky: What do you get out of a hotel?

Kopit: Reliability.

Chesky: Guests Favorites are more reliable than the Sheraton. You can quote that – “Guest Favorites are more reliable than the Sheraton.”  We don’t have all the services. And that will come down the road. Guest Favorites are more reliable than any midscale hotel. We have more data. We have data from half a billion reviews.

Guest Favorites vs. Superhosts

Kopit: I’m curious about Guest Favorites. Some hosts that we’ve talked to have told us that the Superhost designation is less valuable to them now because of Guest Favorites. Any thoughts about that? Talk to me a little bit about how those two programs coordinate with each other?

Chesky: It’s a great question. So the first thing I would say is that the vast majority of Guests Favorites are Superhosts. And a large percentage of Superhosts are Guests Favorites. So there’s like a Venn diagram overlap. 

I’ll give you a couple examples. 

Here’s one  – you have two properties. And you’re a Superhost. But you put on a new property and Airbnb and the new property isn’t as good as the prior one. But because you’re a Superhost, they’re all labeled Superhost. And that is a bit of a flaw in the system for Guest Favorites because the host might be good. Maybe they’re managing someone else’s property. And we don’t know if that property is independently good. We don’t know how much people love that property.

So what Guest Favorites does is it puts the reputation at the listing level. Superhost puts it at the account level. It’s also the Guests Favorites is a little more of a stringent level. And it’s much more about reliability than Superhost, which is what guests tell us. 

So, I like to think it’s mostly accretive. Where it’s taken a little value away from Superhost, it’s meant to. 

If a host has other properties that are new, or aren’t as high quality and therefore don’t qualify, they’re not going to be as prioritized as Guest Favorites. And that’s how it’s designed. 

It’s all about answering your question – would I use it when I’m traveling for business? Do I find it very reliable? So Guests Favorites, we really want to retain the uniqueness and the quirkiness that Airbnb is known for. But we want to make sure there’s a collection of properties – 2 million – that you can count on, that have the reliability of a hotel and I do stand by them.

On Donating $100 Million to the Obama Foundation

Kopit: When you received your pay package in 2021, you said that you were going to donate $100 million in stock to the Host Endowment Fund. And then, if earned, the rest to various charities. I’m curious what you’ve done so far? And if you could tell me any of your favorite charities that you plan to give to or have given to already?

Chesky: Yeah, I donated $100 million to President Obama. I guess it was two years ago. And this is in addition  – so I made a bunch of private donations. I donated tens of millions of dollars to airbnb.org. 

When Ukraine broke out, I made a pledge that we would house 100,000 Ukraine refugees. I wanted to announce it without having to get board approval. So I told the board I will backstop this up to $100 million of my own money, if we don’t get the donations. 

I ended up putting in tens of millions of dollars, I believe, I don’t remember the exact number – not $100 million – but I backstopped it. So I said I’m on the hook if we can’t raise the money, but we ended up raising a lot of money. 

Then the big thing I did was I donated $100 million – $20 million a year over five years – to the Obama Foundation. 

He and I created the Obama-Chesky scholarship for public service, which I’m really, really proud of. 

So the basic idea where this came from. So President Obama once told me, I knew him very well, we had a relationship, he was a bit of a mentor to me in his post-presidency. And I remember him telling me that he had student debt until he wrote his book, “Audacity of Hope.” So basically he had student debt almost up to the point he ran for president. 

Kopit: I still have them too.

Chesky: So he told me: I could have gone to corporate law, but I became a community organizer. But a lot of people don’t become community organizers, and then don’t go into public service, because they feel like they can’t afford to. And so they end up going to tech in Silicon Valley. 

And that’s great. And I do a little bit of investing, but like they don’t really need me. There’s tons of money in the Valley. So I wanted to create, based on this conversation, a scholarship for kids who want to go into public service, but feel like, “well, college is really expensive. I just don’t know if I can afford to.” And by the way, my parents were social workers – and so I was really passionate about that. 

And we want to add a travel component, because I feel like kids well, I feel like a lot of people are getting more and more tribal, more and more insular. And I’m like, if you’re gonna serve others, like the best education is travel and we’re a travel company and the best way is to walk in someone else’s shoes. So, we did that. That’s $100 million. 

And then I have $100 million that I am intending to give to the host endowment. And then I have more large gifts I intend to make to airbnb.org 

And then I’ll definitely do others, but those are probably the big ones So airbnb.org, the endowment, the Obama-Chesky scholarship, and then I’m probably going to do something … like I’ve been a little heads down … but I want to do something significant every so often.

‘Okay, Now We’re Ready.’

Kopit: Has it been hard to make the kind of transition from back-to-basics to, we’re going to try to expand and do new and exciting things?

Chesky: I think any organizational shift is massively hard. So I think the hardest one was when we were this hot hyper-growth company, and all of a sudden, the pandemic occurs, and we’ve got to do a layoff. We’ve got to like shutter all these things. That was way harder. 

There was a moment last year, where I was making upgrades, making improvements, making improvements, making improvements, and we’re like – you know, there’s a lot more to improve about the service. But we think we’re now ready to do things again. 

And I told the team, I said, we don’t have the permission yet. People kept saying when [will there be] something new? I said we don’t have permission yet. Because when I launched all the stuff I launched the first time around: We launched the experiences. We attempted to launch services, we attempted to launch flights – we shuttered it out during the middle of pandemic. We had a travel magazine, we ended up shutting down. We launched the deluxe service, which is a great service, but it never really scaled. 

And the lesson of all this was, we, back then, weren’t ready. And I learned the hard way that we weren’t quite ready to launch our services. 

I said, ‘If I ever do something new again, it’s going to work and it’s gonna be like –  it’s going to be a sensation.’ And that’s only going to be because we’re ready. 

And so we’re gonna go back to the basics for a few years. We had to rewrite the technical stack. We hired this incredible team. You can go to all the release pages, we made 400 upgrades and improvements and I said, ‘Okay, now we’re ready.’ 

So we’re working on about a half a dozen new things. And this was the first one and this is not technically a business, but this to me is more of a brand thing. It’s a gateway. But stay tuned. Got some stuff later this year. Next May will be crazy. And then beyond that, it gets crazier and crazier.