Airbnb Becomes “AirAnB” – It’s now a two tier system that may kill millions of host businesses.
This is a guest post from Alan Egan of HiChee, (original article here) discussing Airbnb’s new ‘Guest Favourite Badge’ – and the potential implications of it.
At a glance
Airbnb has introduced a Guest Favorite badge, which splits all listings into haves and have-nots. Only 2 million properties have the badge. That’s around one-quarter of Airbnb listings.
But here’s the kicker, Airbnb’s CEO Brian Chesky says, “he can’t imagine that there are a lot of use cases where you (a traveler) wouldn’t want to book a guest favorite. “
Of the location search results I checked, guest favorite badged listings account for 60% of the listings displayed.
Those listings without a badge make up less than 9% of the displayed properties.
Your property will struggle for exposure if you don’t have the new badge.
This guest article by Alan Egan of Hichee looks at the full details.
The winter release changes are already in place, and this article will take a deeper dive into the new ‘Guest Favorite’ badge that could destroy half or more of Airbnb host’s businesses.
For those who don’t know, the guest favorite badge is awarded to individual listings depending on several criteria.
The badge is based on a combination of high guest ratings (above 4.9 stars on average), a significant number of positive reviews (at least five), and a track record of reliability (with Host cancellations and quality-related issues being very low, around 1% on average).
https://news.airbnb.com/en-uk/airbnb-introduces-guest-favourites/
To cut a long story short, 2 million listings have been awarded the guest favorite badge.
This badge also trumps the Superhost badge – awarded to individual hosts instead of individual properties (no matter how many listings a host may manage).
So, Airbnb is now operating a two-tier system—listings with the guest’s favorite badge and those without.
The impact of badges
Before we dive in, it’s worth looking at the impact of badges in marketplaces, as they have more impact than you may imagine. You can see the monthly sales numbers on the four kettles above. Those with badges are outselling the others by 4 to 6 times.
The Airbnb Superhost badge
The Superhost program was created in 2014 to celebrate and reward the top-rated and most experienced Airbnb Hosts. Earlier this year, Airbnb announced that there are now over 1 million Superhosts worldwide.
But here’s the shocker…
The typical Superhost earns 64% more than a regular Host.
This statistic is from Airbnb themselves.
As you can see from the above statistic, badges make a difference. That’s the point of having badges.
But the downside is that badges divert attention away from non-badged listings.
So, let’s look at the impact and the reality of this new badge
In an interview on Lenny’s podcast on YouTube, Airbnb founder and CEO Brian Chesky talks about the difference between hotels and Airbnbs. He says, “You know what you’ll get when you book a hotel but don’t know what you’ll get when you book an Airbnb”.
The guest favorite badge is meant to indicate rentals with hotel reliability.
Chesky, stated that
Airbnb looked at 370 million reviews, plus millions of customer service tickets, plus all of the host cancellation data, and they used all of these signals to create the top two million homes.
Airbnb has around 7.8 million listings. He didn’t say they took these signals and determined the bottom 5.8 million homes. Because, like it or not, that’s the other side of the coin.
That’s a whopping 74% of existing listings – Deemed second-best properties.
Chesky also said (at the 38 minute mark in this video):
“He can’t imagine that there are a lot of use cases where you wouldn’t want to book a guest favorite.”
So, based on Chesky’s comments, he can’t imagine why guests would book 74% of the properties on Airbnb. THAT’S A GAME CHANGER FOR A LOT OF HOSTS.
What does this look like on the platform?
I carried out spot checks to see how this change affects listings. I choose one area near Disney, one city center location, and one beach location.
First off, I looked at properties in Kissimmee for four guests.
The first page of the results shows 18 listings.
11 of these (61%) have the Guest Favorite badge.
2 of the 18 (11%) are SuperHost listings.
2 of the properties (11%) are new to the platform.
That leaves 3 established, non-badged listings (just 16%) that have neither badge.
On the second page…
Of the 18 listings…
14 (78%) have the guest favorite badge.
2 (11%) are Super Host listings
Leaving room for only two established, non-badged listings. That’s just 11% of the listings shown.
On the third page…
Of the 18 listings…
9 (50%) have the guest favorite badge.
4 (22%) are Super Host listings
4 (22%) are new listings
Leaving room for only one established, non-badged listing. That’s just 6% of the listings shown.
The red sections in the graphs below show the exposure of existing listings without a badge.
On the upside, if you have the new badge, guest favorite listings account for 63% of the listings shown on those 3 pages. 25% of Airbnb’s inventory is getting 63% of its screen real estate.
Non-badged listings are only getting 11% of the available screen real estate.
The first page of the results shows 18 listings.
11 of these (61%) have the Guest Favorite badge.
2 of the 18 (11%) are SuperHost listings.
2 of the properties (11%) are new to the platform.
That leaves 3 established, non-badged listings (just 16%) that have neither badge.
On the second page…
Of the 18 listings…
14 (78%) have the guest favorite badge.
2 (11%) are Super Host listings
Leaving room for only two established, non-badged listings. That’s just 11% of the listings shown.
On the third page…
Of the 18 listings…
9 (50%) have the guest favorite badge.
4 (22%) are Super Host listings
4 (22%) are new listings
Leaving room for only one established, non-badged listing. That’s just 6% of the listings shown.
The red sections in the graphs below show the exposure of existing listings without a badge.
On the upside, if you have the new badge, guest favorite listings account for 63% of the listings shown on those 3 pages. 25% of Airbnb’s inventory is getting 63% of its screen real estate.
Non-badged listings are only getting 11% of the available screen real estate.
Next, I looked at the first page of listings for downtown Boston for 2 guests.
Of the 18 listings…
10 (56%) have the guest favorite badge.
4 (22%) are Super Host listings
2 of the properties (11%) are new to the platform.
That leaves room for only 2 established, non-badged listings. That’s just 11% of the listings shown.
On the second page…
Of the 18 listings…
13 (72%) have the guest favorite badge.
4 (22%) are Super Host listings
That leaves room for only 1 established, non-badged listing. That’s just 6% of the listings shown.
On the third page…
Of the 18 listings…
10 (56%) have the guest favorite badge.
3 (17%) are Super Host listings
2 (11%) are new listings
That leaves room for only 5 established, non-badged listing. That’s just 27% of the listings shown
The yellow section below shows listings with guest favorite badges. On average, these equate to 63% of the listings displayed.
The red sections in the graphs below show the exposure of existing listings without a badge. They make up a mere 9% of the listings displayed.
Lastly, I look at Panama City Beach listings for 6 guests:
Of the 18 listings…
9 (50%) have the guest favorite badge.
7 (39%) are Super Host listings
1 of the properties (6%) are new to the platform.
That leaves room for only 1 established, non-badged listing. That’s just 6% of the listings shown.
On the second page…
Of the 18 listings…
10 (56%) have the guest favorite badge.
5 (28%) are Super Host listings
2 (11%) are new listings
That leaves room for only 1 established, non-badged listing. That’s just 6% of the listings shown.
On the third page…
Of the 18 listings…
10 (56%) have the guest favorite badge.
5 (28%) are Super Host listings
2 (11%) are new listings
That leaves room for only 1 established, non-badged listing. That’s just 6% of the listings shown.
The yellow section below shows listings with guest favorite badges. On average, these equate to 54% of the listings displayed.
The red sections in the graphs below show the exposure of existing listings without a badge. These listings are getting only 6% of screen real estate.
Notes;
I used a US-based IP address, and recreating these searches will differ slightly each time properties become booked.
It’s not possible to assess the numbers precisely. We know that there are 2 million listings with a guest favorite badge. We know that there are 1 million superhosts. We know that the average host has 1.65 listings. So, we can presume that 1.65 million listings have a Superhost badge. But we don’t know how many Superhost listings have been awarded a guest favorite badge.
I estimate that between 50 and 70 percent of existing listings have neither badge.
I also checked out a couple of categories as that’s Airbnb’s main search parameter.
I started with the cabin category.
These listings carry no badges, but when I clicked through, of the 20 listings shown, 15 (75%) were guest favorite listings.
I also checked the Amazing Pools category, and 18 (72%) of the 25 listings were Guest Favorites.
Interestingly, I also found guest-favorite properties with less than 4.9 ratings
So, like it or not, if you currently have a review score of less than 4.9/5 you only have a very small chance of showing up on the first pages of the results.
Even if you have been awarded a guest favorite badge, you aren’t out of the woods. One bad review or one cancellation could cause you to lose your badge and your exposure on the platform.
In the past (pre winter release), a bad review was an inconvenience. You may have lost your Superhost status. Now, you may lose a large proportion of your future rental income.
If you don’t get any exposure, you won’t be able to get better reviews (if any), so you have very little chance of earning/being awarded a guest favorite badge in the future.
To Conclude
Airbnb in now a two tier system with the haves (exposure and bookings) and the have-nots.
Airbnb has a filter that literally points out their two-tier system. If they have a top tier, and you’re not in it – That makes you a bottom-tier host.
In the past, the company had an upper level, a select category called Airbnb Plus. They now have, in effect, Airbnb Minus. If you aren’t a guest favorite, you will be buried by the algorithm, struggle with exposure, and miss out on bookings.
When Chesky says that “he can’t imagine that there are a lot of use cases where you wouldn’t want to book a guest favorite” (property), he’s also saying that he can’t imagine people wanting to book non-guest-favorite listings.
Chesky doesn’t have to answer to hosts; he only has to answer to board members and investors. It looks like he has abandoned around 4 million hosts because he wants an Airbnb experience to be more aligned with a hotel experience than an actual Airbnb experience.
If you are a host and you don’t have the guest favorite badge, you can check your listing views here.
The gig is up for many in this particular gig economy.
- During high season, once guest favorite properties have been booked, there will be more room for non-badged properties in the listings.2. There are only two upsides that I can see for hosts without a guest favorite badge. Airbnb can tinker with the algorithm and display more non-badged listings (never say never)
Feedback
How do you feel about these changes? Have you received guest favorite status or not? Have you seen a drop-off in views on your dashboard? Are you getting more or less bookings?
Alan has been working in the vacation rental sector since 2004, when he first created a listing site for his property management company. He has been helping short-term rental owners and managers to stand out in an over-saturated marketplace for over 12 years and has written thousands of articles in that time.
He has written books on vacation rental photography and was the first in the industry to create online marketing courses for hosts.
He has given keynote presentations across various subjects at The Vacation Rental World Summit, VRMA, VRMintel, Host, and The Book Direct Summit.
