Jesse Stein, Global Head of Real Estate at Airbnb
Welcome to Integrated Projects’ newsletter, Buildings 2.0.
Every week, we interview the brightest minds – from chief innovation officers to architects to owners – about the technology and trends reshaping the structures we live and work in, then write up a summary of the top actionable lessons you can learn from them.
In our first edition, we dive into our interview with Jesse Stein, Global Head of Real Estate at Airbnb. Here are the top takeaways from the interview.
1. Expanding your business model to include new audiences takes effort, but it can work.
"One of the things that we're really trying to do is empower renters to monetize the benefits of Airbnb, like those that own homes. And when you look at who owns the housing stock and the rentals, it was somewhat concentrated to a lot of these larger players. ...
“We've launched Airbnb-friendly apartments, which is really a partnership with the largest landlords in the country. We started with groups like Equity Residential, Graystar, Brookfield, Starwood Capital, so on and so forth. We launched 175 buildings across the US in roughly 25 cities.
“Consumers can now go to Airbnb, find communities across the US that allow them to host, get in contact with those buildings, move in, and if they so choose, host their primary home part-time."
Actionable Takeaway:
Don't walk away from potential customers or segments. Instead, look for ways to expand your business model to new customers, create buy-in, and move into new markets.
2. Overcome customer hesitation by creating benefits and buy-in.
"There's really three core benefits to the landlord. One, we are marketing their properties to our consumers for free. So there's not an expense to get lead generation from Airbnb. We are very blessed with the amount of consumers we have. ... We are very fortunate with the number of eyeballs. So we are now coaching those eyeballs to be able to find their next twelve month rental on Airbnb and we are sending those consumers to our partners for free. So we are helping the top of the funnel, number one.
“Number two, we've built all the software and the tech on the back end to ensure the fabric of the community stays residential. ... So the tools really help ensure that the individuals that are hosting live there, first and foremost; they live there, it's their primary home and they're hosting part time.
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“The third opportunity is when they host, our partners are able to take a percentage of the revenue, and that flows partially to the bottom line. So there's a rev share component for the landlords as well."
Actionable Takeaway:
If you need a particular segment's buy-in for your business model to work, create irresistible benefits that will help increase their confidence in your initiatives.
3. Leverage your data to help consumers make better decisions.
"On Airbnb-friendly apartments, we've integrated with all the property management systems so we have real-time data into what your unfurnished rent cost on a monthly basis. We at Airbnb have so much data on what historical ADRs, average daily rates, have been for a short-term basis.
“So on Airbnb-friendly, we've built a custom calculator that outlines what your unfurnished rent would be and then below it gives you the option, Do you want to host one night? Do you want to host two nights? Three nights? It can show you what the ADR has been over the last twelve months. ...
“So historical ADRs aren't indicative of future ADRs, but it gives you a snapshot, a history, and it shows you if you host five nights, seven nights, you can basically cover half your rent or whatever the numbers may be for the market you're in."
Actionable Takeaway:
Create tools for your customers that leverage the data you collect so that they can make more informed decisions — in this case, on the best time to rent their apartments or homes.