Airbnb co-founder and CEO Brian Chesky often says he doesn't see his company as a direct competitor to the hotel industry, but he does believe his company is poised to deliver some traditional hotel amenities in ways that are better and cheaper.
During Airbnb's first-quarter 2023 earnings call Tuesday, Chesky said one of the key growth opportunities for his company will be leveraging artificial intelligence — which he called "the biggest revolution" in tech since he arrived in Silicon Valley — for customer service and even inspiration during the early stages of booking, serving as both a virtual front desk and concierge.
"Ultimately, what I think Airbnb is building is not just a service or a product, but what we are in the largest sense is a global travel community," he said. "The role of Airbnb in that travel community is to be the ultimate host. Think of us with AI as building the ultimate AI concierge that can understand you. We can build these world-class interfaces in our model."
He noted his company is using OpenAI's ChatGPT4 as the basis for its own AI efforts.
In a more practical and straightforward way, Chesky said using AI as the entry point to customer service will elevate both experience and cut costs for his company.
He noted Airbnb's biggest strength and biggest weakness are the same: The uniqueness of each stay.
"It's historically less consistent than a hotel," he said. "I think AI can level the playing field from a service perspective relative to hotels. Hotels have front desks; Airbnb doesn't. But we have literally millions of people staying on Airbnb every night. Imagine they call customer service. We have agents that have to adjudicate between 70 different user policies. Some of these are as many as 100 pages long. What AI is going to be able to give us is better service, cheaper and faster, by augmenting the agents. I think this is going to be something that is a huge transformation."
International and Urban Travel Return
A more immediate positive for the company, Chesky said, was a notable rebound in both international travel and travel to urban markets.
Chesky said a return of those demand streams represents a best-of-both-worlds scenario for Airbnb.
"It's important to note that Airbnb is more than double the size that it was before the pandemic, and most of the travel industry is only a little bit larger than they were before the pandemic," he said. "There's been a major mix shift share toward Airbnb. I think we're starting to see some of the old ways of traveling recover, specifically urban and cross border, but ultimately, we're really focused on innovating and on playing our own game."
The company's first-quarter shareholder letter noted "high-density urban nights booked increased by 20%" year over year. Airbnb also saw a 40% jump in nights booked in the Asia-Pacific region, driven by a 160% increase in travel from other regions.
First-Quarter Performance
Airbnb recorded its first-ever profitable first quarter with $117 million in net income, up from a $19 million loss in the same period of 2022.
The company had $1.8 billion in revenue for the quarter, up 20%, with adjusted earnings before interest, taxes, depreciation and amortization of $262 million.
Airbnb executives said bookings pace has been solid, with $20.4 billion in gross booking value in the first quarter and a 19% increase to 121.1 million nights and experiences booked. The company also had $1.6 billion in free cash flow, the highest on record.
As of press time, Airbnb's stock was trading at $127.07 a share, up 49.7% year to date. The Nasdaq Composite was up 17.3% for the same period.