Airbnb CEO Brian Chesky Exclusive Interview Global Dialogues CNBC TV18

17 years since its inception, Airbnb has been the biggest disruptor in the global travel and hospitality industry. The company has built a travel empire by leveraging people's homes, spare bedrooms and vacation houses and now it wants to push beyond accommodation with a renewed push into what it calls Airbnb experiences. It's introducing new social features on its app to help guests connect with other travelers. It's also introducing a new smart search feature to help guests discover new destinations powered by artificial intelligence. Geopolitical crises and the tariff wars have not managed to dent Airbnb and the company has continued to post steady growth. But the Airbnb stock has been on a roller coaster since the pandemic. Wall Street is hoping for the bet on experiences and services to pay off as it could unlock new revenue streams. Joining me now to discuss all of this and more is the co-founder and CEO of Airbnb, Brian Chesky. Many thanks for joining us here on The Global Dialogue. It's great to have you join us on a day that India is celebrating. It's Diwali here in India, so which is why you can see all the lights behind me. It's great to have you with us today. Well, thank you for having me. Happy Diwali. Happy Diwali to you as well, Brian. But let's get started with the ambition and the aspiration that you now have for Airbnb. Brian, as I pointed out, the move and the sort of pivot to services, to experiences, I was in L.A. when you launched the experiences part of Airbnb's chapter. Do you now want to position yourself as the Amazon of services? Well, I think that's a pretty good analogy in the sense that there really is no one-stop shop for all these different services. And it's pretty wild because I think people thought of Amazon as the everything store. But Amazon is really the everything that comes in a cardboard box store. And it turns out there's other part of the economy of services. And there's really no Uber Eats or DoorDash or Airbnb for you can tap a button and a service provider can come to your house like a chef, a masseuse, some of you do like beauty, a personal trainer. And we think this is just the beginning. We think these services are going to be popular with travelers. They're really starting to take off. But we also are starting to see people book them in their own city. And so I think this is a really big opportunity for us. You know, can you quantify the opportunity for me, both between experiences as well as services, Brian? And, you know, I'm asking you this in the context of the fact that we've just had a company that's doing exactly that. The business model is based on providing services at home. And it's just listed here in India on the stock market. What is the headroom for growth that you believe you have at this point in time? What could this mean in terms of potential revenue enhancement for Airbnb going forward? Yeah, I mean, I'll talk about experiences and services. So conservatively, you know, there are companies that do nearly a billion dollars in revenue on experiences, and those companies don't have the Airbnb brand distribution. So you can imagine that conservatively, it's at least a billion dollar revenue opportunity, and it's probably many billions of dollars for experiences. And then we think services are probably significantly larger, because there are just so many categories of services. We launched with 10 categories of services, but there are dozens and dozens of categories. And we also think service can be very popular in your own city. So I think the opportunity for services is at least as large as our core business. So certainly the opportunity is tens of billions, potentially greater in GBV, gross booking value. We'll see how much we get, but it's a huge opportunity. And I think the service economy is going to rival retail in the coming decades. So this is a really, really big bet. It's a really big bet that you're making. But what's the initial response and the feedback been? Because you launched in May, experiences you launched before that, what's the market telling you? What are customers telling you? What are the learnings in the initial phase? Yeah, really a couple things. Number one, satisfactory experience and service is higher than homes. The average home has about a 4.8 rating out of five stars. For experience and services, it's around a 4.93. So the satisfaction is higher. Part of the reason why is because we vet every single service and experience for quality in addition to reviews. We don't do that with homes. We decided that we just really wanted to be much more hands-on with this product. Number two, we've also learned that we need to really focus on a few cities and really get it right. So we focused on LA and Paris. We're starting to get a lot of momentum. And then we want to take that playbook and then bring it to other markets. You said it's 10 categories to start with, Brian. Are there things that you believe you're not going to do? Is there a to-do list and there is no to-do list for you at this point in time in terms of what you're willing to explore? Yeah, I mean, well, there's a not right now list. There's an old saying, you can do everything you want, just not at the same time. And so we have to prioritize. So, you know, there's a lot of types of services that we looked at, like car rentals or equipment rentals. These are going to be very, very popular services, but they require partnerships with other companies. And we said, we're going to start with host-led services. So that's what we're focused on. But never say never. I think there's a lot of services we could go to. I mean, you know, you could say, like, we're probably not going to, like, allow you to have, like, we're probably not going to do basic service, like non-hospitality services, like an electrician coming to your house. Then again, we are starting to see opportunities for host-led services. We have co-hosting services where we can match a host with a co-host to help you host your property. We are starting to look at services for host as well. So I think we're going to see where we're going. We're going to start with our core business of really core hospitality services, and then expand out from there. And we'll see. You know, I don't think when Amazon launched books, they thought they would do, like, outdoor, like furniture and outdoor equipment. They started with books. Then they went to CDs, DVDs, when people were buying those, and media, and then, like, electronics. And they kind of went from one adjacency to the next. And pretty soon they were selling things that had nothing to do with electronics or media. I think that's similar Airbnb. We're starting with travel. We're starting hospitality. And we'll take it from there. You know, hotels, Brian, you know, you've, in a way, to put it crudely, been the anti-hotel company, in a sense. Is that part of the bucket that you're looking at in the soon-to-do or could-do list? I think when Airbnb started, it really was, like, very much an alternative to hotels, generally. At the same time, something big has happened in the last 17 years since we started Airbnb. One of the things is there's been this huge independent and boutique hotel movement that's really gotten some legs. A lot of these companies provide great hospitality. And I don't think we're anti-hotels at all. I think we're probably anti-mass-produced hospitality, cookie-cutter hospitality. And I do think that a lot of boutiques and independent hotels provide great hospitality, and they belong on Airbnb. And so we are looking at hotels, especially independent hotels. And we would love to have the best independent hotels on Airbnb. And so we'll have some updates soon on that. How soon, Brian, can we have an update on that front? Well, let me put it this way. When we do, I'd love for you to be one of the first people to talk about it with. Wonderful. I look forward to that. But let's talk a little bit about India, because your international plans and your international markets have actually done much better than your core markets, growing twice the rate as your core markets are concerned. Let's double down on India and what you have lined up for the Indian market and how the Indian market is doing for Airbnb. I think India, we think of as probably like a 10-year bet or longer. So we think it's going to be one of the biggest markets in the world. You just have to have a long horizon on India. I mean, we know that it's a huge market, the largest population in the world. It will eventually, I imagine, be the largest middle class in the world based on the GDP growth. Right now, it's primarily domestic travel, 90%. It's primarily young travelers, domestic travel. So 90% of our business are Gen Z or millennials, and about 90% of business is also domestic travel. Eventually, I see that there's going to be a lot of outbound travel. I think Indian travelers are eventually going to leave India and cross borders. That will happen when the Gen Z and millennials kind of age and move up the economic ladder, and they are able to travel internationally more and more. You're going to see more business travel as well. So I think it's going to be a huge bet for us. It's a long bet because we're really betting on the next generation. We think this next generation is going to want authentic travel experiences. Additionally, we also think we want to bet on India as a destination. We think eventually millions of people, maybe tens of millions of people, are going to travel to India. So I think that's going to be a huge opportunity for us in the coming decade. So this is a really big bet for us. I was just going to ask you that, from an experience point of view, do you see India playing a role at all as far as the Airbnb plans are concerned? Absolutely. I think that India is going to be massive, not just for our core market, but for also services, experiences, and anything else we want to do. I see India as early adopters and a lot of new services and experiences. You know the market a lot better than I do, but one thing I do know is that I think that they want authentic experiences. They've got an incredibly rich culture, and I think that plays well with Airbnb's strengths. Brian, let's talk about what's happening globally. I know your numbers are going to be out next month, but what are you picking up at this point in time? Growth has been steady. You've guided for about $4 billion in Q3. What are you reading into at this point in time? The headlines are screaming uncertainty, but that hasn't really percolated down to spending behavior and spending patterns in the way that one would have imagined. I think that travel is incredibly resilient, and that's something I've been surprised by since really the pandemic. When we went into a lockdown, we lost 80% of our business in eight weeks, and people were predicting, is this the demise of Airbnb? It wasn't. Part of the reason it wasn't was not just that travel is adaptable, but Airbnb is inherently adaptable. When there's economic uncertainty, people also look at affordable ways to travel. I think Airbnb is very resilient, as is the travel industry. I think one of the things we're noticing is that people cut back their spending, but one thing they don't want to cut back is their travel, and that's what we've seen. Are you satisfied with the growth rates that you are seeing? Do you believe that you can do better, and what will it take for you to do better? I am not satisfied at all. No one in the company is satisfied. We would like to be growing significantly faster. I think we will, and I think there's a lot of ways to do that. I think our core business, homes, short-term rentals, is just beginning. I do not think we are reaching any level of saturation. Let me give you an example. 70% of our business is essentially in five countries, which is the US, Canada, Australia, UK, and France. There are a lot of other countries around the world, including India, where we can get a lot of growth. Then you have services. Services could be a massive, multi-billion-dollar opportunity. We talked about this idea of the Amazon of services, experiences. Then there are hotels. Then there are all these other businesses we want to launch as well. I think we are just at the beginning of the next chapter of Airbnb, and that chapter is going to be including an accelerated growth rate. When you speak about this next chapter, Brian, you are pivoting into a whole host of areas that you do not have the experience in at this point in time. From a bandwidth point of view, from an organisational structure point of view, how are you positioning yourself to be able to deliver to the promise that you are going to be making to the customers across each of these very different verticals? That is a really good question. We do not want to go into a business and do a bad job. We want to go into a business, and the day we launch, we want to make sure that people know we are as good or better. I will make a bold statement. I actually think the customer experience for services and experiences is better, not inferior, to our core product. The reason why is because, first of all, services and experiences are not totally different. What they all have in common is these are host-led businesses. We know a lot about hosting. We know a lot about online marketplaces. These are adjacencies. In these adjacencies, we started really small, and we tried to take lessons from our core business. One of the lessons is we should do more vetting up front. That has worked really, really well. We are much more hands-on with these new marketplaces, and we only go into things if we think we have a contribution to deliver, if we can do a better job in the industry. I think that we are limiting our bandwidth to the things we can do a great job on. That is why we think we are doing services and experiences really well. Let us talk about what everyone will eventually get down to having a conversation on is the use of AI and how you are using AI. For a company that believes in building real-world connections, you see technology or AI as more isolating. At the same time, it is also providing you the solutions to be able to address that problem. How do you balance that within the organization? I think that AI is a tool. The question is, is the world going to be better off with AI or worse off with AI? The answer to that question is, of course, what we do with it. I think most people can agree that while phones are this incredible tool, we probably collectively spend a little bit too much time staring at a piece of glass. Thank God, I feel lucky that I was not a kid growing up with a phone because I got to go outside, play with my friends, and do things in the real world. I think the phones are these magical portals to these digital worlds, but a lot of life has to happen in the real world. The real world, real connections, real communities, real people. I want to be the kind of company that gets you off your phone into the real world. This is not to say phones are bad. I rely on them. But it is to say that life has to also be experienced off your phone. I think we can all agree that it's getting more and more difficult to meet people in the real world. More and more of life is experienced through a device. The more you experience life through a device, if there's not a balance in the real world, you're going to probably be more lonely, more isolated, a little more divided. We want to help you get into the real world. I think AI can be, instead of a destination, AI can be a way station to this magical real world. No matter how magical AI is, it's never as magical as the real world. You know, but how do you do that, Brian? Because you are sort of asking people to get off their devices and live in the real world, and yet you want them to be on their devices to get into Airbnb and try and find a better way to experience the real world. So what are you doing on the app today to try and kind of, you know, get people, nudge them to get into the real world and do it smartly and efficiently while they're on their phones? Well, first of all, we don't need to get them on their phone. They're pretty much most people are on their phone all the time, probably a little bit too much. So they're already there. So we just need to make sure that our application is really wonderful. It's delightful. That's why we made 65 updates to the app today. And we need to make sure that, you know, what we present is so compelling that it's worth spending money getting off your phone into the real world. And so the homes, the experiences, the services, they have to be really compelling. By the way, it should be noted that if you look at Gen Zers, their adoption of social media is actually starting to go down. I think there's a new generation that is actually yearning for real experiences in the real world. That's not to say social media is dying. It's not. But it is saturating. And I do think people are starting to realize there's this other world, the real world, that people want to live in. And I think they're starting to see a reaction to being glued to devices. So I think a lot of the updates that we're making to make me more delightful, to make it easier to find great things to do. That's our answer. And also making our app more social. I mean, we are launching social features for experiences. You can now see who's going on experience. You can message people after you can stay in touch with them. This is a little bit like a social network in the real world. And I think that's the next next wave of social media is really in the real world. But you know, speaking about this next wave of social media in the context of what AI is likely to do, and you said it can be magical, it is a tool, it depends on how you use it. But in the near term, say over the next three to five years, what is the transformative impact that you believe AI is likely to make? I mean, we have all kinds of people saying all kinds of things about the magic AI is going to create. But from from your perspective, how transformative is AI going to be in the real world? Not B2B, not, you know, what companies like OpenAI etc. are doing for themselves. But in the real world, how transformative is it going to be in the next three to five years? I think there's an old saying that people overestimate what they can do in a year and underestimate what they can do in 10 years. I think that's true of AI. I think people are overestimating how much the world's going to change in the next two or three years. It's not going to change dramatically in the next two or three years. I think people are massively underestimating how much the world's going to change in the next 10 years because of AI. So it's one of those things where it's going to happen slowly and then all of a sudden. I think that the last three years since the launch of Chachapiti, the world hasn't changed that much. The narrative has changed, the investment thesis has changed, the way kids do homework has changed. But most of daily life hasn't changed. My evidence to this is if you look at the top 50 apps in the app store, the top three are AI apps. Sora now, Chachapiti, Gemini. The apps four through 50 are essentially not AI native applications. I think in the next three to five years, they're going to be all AI native applications. And once this happens, I think that's the beginning of daily life truly changing. Now, this will still mostly be the online world or getting the real world. The actual real world changing because of AI is going to probably be the next decade and it's going to probably take quite a bit of time. We're just at the very beginnings of AI. I think there's this narrative that it's already happened or it's happening. This is like the first page of a very, very long book. This is going to play out over the course of decades. If this is the first page in your view of a very long book when we talk about AI, where do you believe Airbnb finds itself on the AI book? I think that right now there's AI companies and there's non-AI companies. I think you have OpenAI's AI company, Anthropics' AI company, Google's very much an AI company, and then startups are AI companies. I think eventually all technology companies will be AI companies or they're not going to survive. I think Airbnb is going to become like everyone else in AI company, but we want to be a leader in applied AI. We're not intending to build our own models, but on top of models, there's a lot to do. On top of these models, there's the architecture, the tuning of the models. We launched the AI customer service agent. We had to use 13 different models. We had to train these models on tens of thousands of conversations. Then we had to build a custom interface for these models. Then we had to build a service layer on top of the custom interface. There's a lot to do on top of the models. I think that Airbnb is one of the best design teams in the world. We have one of the best product development teams in the world. I think we become a leader in what to do with the models, the applications. We want to be a leader in AI applications. I think that's going to be our contribution to this narrative. I think Airbnb is one of the most humanistic companies in technology. I think this is coming at a time when people wonder what's going to happen to the world in the age of AI. Is AI going to displace people or is it going to provide economic opportunity for people? What is real? It is becoming hard to discern what is real on a device. Pretty soon, I think it will be indistinguishable. I can tell you something. It will not be hard to distinguish what's real in the real world. We're going to know that. Just like a lot of jobs will be automated, a lot of jobs will be safe. Most of hosting is not going anywhere. I think that Airbnb is a bet on AI because number one, I think we're going to have one of the leading AI native applications. Number two, our business in the real world is pretty insulated from the disruption of AI, at least for the next decade. What do you make of the AI evaluations that we're seeing at this point in time, Brian? Any thoughts on that? I think things are frothy as an understatement. I think that the thesis on AI is correct, but I think people's expectations need to be moderated from a timeline standpoint. Everything everyone's saying is going to happen, it's going to happen in a longer period of time than people think. If you look at the dot-com bubble, all these apps that crashed during the dot-com bubble, they eventually all worked. Those companies didn't survive. But eventually, 10, 15, 20 years later, all these applications did eventually work. It wasn't that what happened in the dot-com bubble was wrong, it was just early. Probably a lot of that's the same. It's not exactly the best analogy. The AI applications are useful. But if you look at the largest AI company in the world, Chachapiti, they do our revenue. When companies are making literally hundreds of billions or trillions of dollars of commitments, they require trillions of dollars of revenue or sales. I think this is all going to happen. I think AI is going to deliver trillions of dollars of revenue. But we just need to be realistic about how many years this is going to take. It's going to be next decade, not this decade. That's my prediction. Well, that's a prediction that we'll hold you to. But Brian, how different is the Valley since you moved there in 2007? It's certainly gotten a lot more political. But how have things changed in the Valley since you were there and founded Airbnb? Oh, it's totally different. When I came to Silicon Valley, tech was kind of this warm, fuzzy brand. We were kind of the underdog. We weren't this giant monolithic industry like, say, the financial services industry. It was not very political. It was kind of moderate, center-left. And I don't think there was a lot of attention on us like there is today. So I think it was really quite different. I think today, it is one of the largest industries in the world. The companies with the largest valuations are technology companies. There's a huge amount of scrutiny on technology companies. It has gotten more political, a little bit more divided. It's just more mature. And I think there's a lot of positives to the which is there's a lot more investment, a lot more ideas, get oxygen to thrive. But I think that there is something we need to be wary of. And maybe this is true of the AI frenzy, which is there is such a thing as raising too much money. There is such a thing as having too much hype, I think, and having unrealistic expectations of time horizons. And I think we just need to remember that startups and companies need time to grow. And I do think that we need to be careful about having a frenetic kind of hysteria around these technologies. I think that's not a good environment to build. I think you really want to remember that Airbnb is a 17-year-old company. All these exciting AI companies are emerging. They're going to take decades to play out. I mean, maybe AI is going to accelerate it, but a great company is always going to take decades. You know, you're speaking about taking decades. It's taken you 17 years to get Airbnb to where it is today, with the bet that you're making both on experiences and services. You know, how different is this company going to look five years on? It's going to be completely changed. So what I will say is, though it took us 17 years, AI and technological revolution we're under is going to mean that every company is going to change a lot more quickly. So a lot's going to change. And we're going to be, obviously, like probably every other technology company, AI company, we're going to have our unique contribution to it. But maybe the more important way to answer the question is, what won't change? What won't change is Airbnb is going to be the company that tries to get you off a device into the real world. Or if you're on a device, it's going to be augmenting the magic of the real world. We believe the most magical thing is connecting with another person, another place, another culture, walking in their shoes, and having life experiences that you'll never forget. You ever notice when you dream, devices aren't usually in your dreams. Most people don't dream with devices. They dream of real experiences. And as magical as AI is, it is not as magical as human connection in the real world. And I think the most magical use of AI is to make possible the most meaningful experiences in the real world. So that's what we're going to be focused on. And that's what we've been doing since the very beginning. The first weekend we started Airbnb, it was about connecting with other people. That's what we're still focused on. That will be true five years from now. Brian, my final question, you talked about dreams. What is the dream that you have, not just for your company, but as someone who's watching the world be reshaped by AI, by technology? What's the dream that you have today as a co-founder and CEO? It's a great question. One of the things I've noticed is some of the people, the strongest opinions about one another are people without passports. This is a world today that's pretty divided. It's a world where more and more people are feeling lonely and isolated. And my dream for the world is that more people have passports, more people travel, more people experience different cultures, more people have experiences, whether on Airbnb or not. It's not about Airbnb. It's about the world feeling smaller. Here in the United States, our country's name starts the word united. And I think that's a good mission for the world, to be more connected. The promise of the internet was we'd be all more connected. But some of that connection has led to more division. And I really think that travel and connecting with other people is a huge antidote to some of the division that happens online. So my dream is that the world can be brought together to feel smaller, and that we can make a small contribution towards that. Brian Chesky, it's been an absolute pleasure as always. Many thanks for joining us. We hope to see you here in India to experience India as well. Thanks for your time and look forward to another conversation with you. Thank you very much for having me. Thanks very much. With that, it is time for us to wrap up this edition of the Global Dialogue from all of us here on the team. For now, goodbye and many thanks for watching.