Airbnb adds hotels, car rentals. Chesky says app can become an 'Amazon for services'

Dado Ruvic | Reuters

Airbnb CEO Brian Chesky said the rental platform could become an Amazon for travel as the company adds hotels and new services in its latest push to become an everything app for vacationers.

"I imagine one day we'll have dozens, possibly even hundreds of categories, just like Amazon," CEO Brian Chesky told CNBC's Andrew Ross Sorkin. "I think we can build a little bit, like an Amazon for services, at least for traveling and living."

Airbnb on Wednesday added independent hotels and services such as car rentals, grocery delivery and luggage storage to its app, in its latest expansion beyond home rentals.

Guests can also book boutique hotels on Airbnb, and the company is incentivizing users with up to 15% back in platform credits.

Chesky said the new additions build on the growing services needs in a "very fragmented" travel and living market. He told CNBC that the company would also consider adding equipment rentals for activities like surfing and skiing, and gym passes down the road.

Courtesy: Airbnb

Airbnb is in the middle of a multi-phase redesign after dialing back initial expansion plans during the Covid-19 pandemic. Last summer, the company launched a services business with 10 categories, in a major app design overhaul.

Since then, Airbnb has brought social features to the platform and an updated artificial intelligence chatbot.

The company's AI strategy is also getting another upgrade this year.

Airbnb said its chatbot tool can now fix booking issues within the chat, and the company is adding an AI feature that summarizes guest reviews. Later this year, the company plans to bring AI voice assistant to its chatbot and AI-generated summaries for listings.

Business chief Dave Stephenson said Airbnb is using a combination of tools from open-source and large language model makers for its AI features.

"We're very judicious in using the right model for the right purpose, which is again why I say we end up using this mix," he said.

Chesky said the market for AI is moving much faster than he expected, but there's a concentration of companies competing in the same market. He believes consumer AI is the "next frontier" as people change the way they live.

"I would caution everyone plowing all their money in right now, thinking there's just a couple winners," he said. "I think the biggest winners of AI may not have even emerged yet."

Courtesy: Airbnb

As the summer season gets underway, the travel industry is grappling with a spike in fuel prices, spurred by the ongoing war in Iran.

Earlier this month, Airbnb said cancellations were "slightly elevated" in Europe, the Middle East, Africa and the Asia Pacific regions due to the war. The company also expects a 100-basis-point headwind to nights and seats booked during the current period.

Chesky said Airbnb is one of the "most resilient" travel companies in the world because the company is exposed to many geographic areas and traveler groups, and is typically more affordable.

"What we are seeing is when there's economic uncertainty, people plan their travel a little bit more last-minute," he said.

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