Airbnb has a new CTO. The company said today that Ahmad Ali, who previously was a top AI executive at Meta, is taking the job. I sat down with Airbnb co-founder and CEO Brian Chesky to talk about how he plans to further integrate AI into the Airbnb platform and how he's thinking about the future of his business as the stock has basically been flat over the past few years. I also got some details about the current state of Airbnb's experiences, services, and hotels business lines, which he is betting on to reaccelerate topline growth at the company. Here is that conversation.
Brian Chesky, welcome to TITV. It's great to have you here.
Well, thank you for having me.
So, look, you wrote a memo to employees introducing Ahmad Ali as your new CTO. And before we get going, the first thing that jumped out to me was that you wrote he grew up in Winnipeg, Canada, one of the coldest places in the world. And I just wanted to share I was also born in Winnipeg. So I can confirm.
Oh, it's true. I mean, it is cold, but the coldest place I've ever been was Calgary. I got off the airplane in Calgary, the jacket. My friend picked me up and gave me a jacket to put over my jacket. And I've heard Winnipeg's colder than Calgary. They have to plug in their cars at night. That's how cold it is. But it's a great hockey town and I know you're a hockey fan.
I love hockey and I grew up a place not quite as cold as Winnipeg in upstate New York, but it was kind of near Buffalo. So kind of familiar with snow and cold and hockey.
There you go. Great. Okay. Well, let's get into it. So, I want to understand how Ahmad fits into your vision for AI at Airbnb because you've said publicly that you want Airbnb to be the real-world connections app in an AI world. You've also talked about how models will become commoditized in the long run, will become something like electricity. And you're already using AI in many of your customer service tools on your platform. And so the question I want to start off with is how is Ahmad going to help you extend AI throughout the rest of the company?
I mean three things. Number one, the most fundamental thing is AI is this great workflow technology to make everyone more efficient doing their jobs. And I think obviously software engineering is being revolutionized by AI, but basically every single function of the company from legal to finance to design to marketing could be benefited from AI tools. So I wanted to be one of those companies that started before generative AI where we're not an old school company. We're a new school company and we're using the latest and greatest tools. That's number one. That's just fundamental. Number two, a lot of people talk about AI and one of the most common use cases is travel, a travel agent, right? We decided to start with the hardest part of AI with Airbnb, which is customer service. And so now 15% of our, you know, we were able to reduce our contacts in English by 15% by having the AI do customer service. That's really, really hard to do. It's one thing to say, 'Where should I travel?' It's another thing to say, 'I'm locked out. Can you help me?' And so we want to take that customer service agent and bring it up-funnel. And ultimately, I don't think we're going to live in a world where you just use one agent, one chatbot to do everything. I don't think you're going to want a thousand agents that just like you don't want to, you can't have a thousand friends. You don't have just one person in your life. And so I do think some specialization will benefit and not too much specialization. What we're going to specialize in is traveling and living. If you want to travel or live somewhere, you're going to go to Airbnb and we're going to be able to use the same models as the frontier model companies because we can license those models, but we're going to specialize. We're going to tune them and train them for our use case. We're going to design these really great interfaces that marry Airbnb's design with frontier technology to be able to help you travel and live anywhere. The other point I'll just say is a very small percent of Airbnb is the app that you see and you book. A large part of Airbnb is managing 5 million hosts, having 5 million hosts in our community. Handling over approximately a hundred billion dollars going through our app in nearly every country in the world trying to keep people safe every night. Handling tens of millions...
What are some of the things that you could see AI automating on that vector of working with the supply?
Well, creating a listing is probably the most obvious one, right? You can in the future basically just add your address or even just say my current location is I'm home. We can then scrape an MLS. We could basically create your listing for you. If there aren't photos, you could take photos. AI could use computer visioning to then take the photos, write the description. It could verify the amenities exist at that property. So creating a listing would be significantly easier. That's just one example. There's like dozens and dozens of examples like that.
And so I wonder how you think about ROI in this AI area. Is it quantifying time savings either for your own workforce or for the people who are putting their homes up to be listed on the platform? Is that something you quantify? Do you think about increasing revenue if you're getting more bookings, being able to use a chat interface? I mean, how do you quantify ROI for AI?
Probably three things. First is just being able to move faster and deliver more features. You know, if for example, if every engineer is using AI tooling and you create like double the efficiency, then you can essentially ship features at twice the rate and that will of course lead to a lot more growth. So that's on the tooling. On customer service, you can reduce customer service contacts. That of course, if an AI agent can essentially handle a ticket that saves a lot of money in the workforce but also if it can respond faster you can recover the customer and pass the savings on to the customer. The third thing is just essentially making it a better store for you. So making it easier to find the right booking increases conversion for supplies. So as conversion increases of traffic revenue goes up. So, shipping features faster, reducing customer service, increasing revenue by increasing conversion. Those would be kind of like three really big ROI metrics. Again, there's probably dozens. Those would be probably the three most important.
So, it leads me into sort of a broader discussion I wanted to have with you about the business at large. I mean, if you look at the growth trajectory for the business, you guys have no problem with profitability. It's very strong there. Growth is decelerating and the stock has very much been flat. And the solution to this you've said is experiences, services and hotels in the long run could be multi-billion dollar businesses. Where are those businesses right now in terms of revenue?
Yeah, one thing I want to say is growth had been decelerating and now it's reaccelerating. In our most recent Q3, we showed acceleration from Q2. We haven't reported our Q4 results yet, but I'm very optimistic. Q4 was guided to 7 to 10% around the same as the current quarter, right? Yeah. And I can't obviously comment on the results. Our earnings call is in I think four weeks. But we are optimistic that over the coming years it'll be able to accelerate growth in Airbnb. And how are we going to do that? A few things. Number one, creating new businesses. So you ask about experiences. Experiences we are really optimistic could be a multi-billion dollar business. Services. There is no Amazon for services. Whether you want a chef or you want a personal trainer or masseuse, we think that could be very popular for travelers and eventually locals. Hotels, people don't realize how big the hotel industry is. Google and Meta are essentially advertising companies. They're in the advertising industry. The advertising industry is smaller, I believe, than the hotel industry. So, we do not need a large market share of hotels to have a huge business. Hotels will absolutely be a multi-billion dollar business. One example, there were over 400 million searches for New York City on Airbnb last year. 400 million. Airbnb is essentially banned in New York. Adding hotels, we can make quite a bit of revenue in New York. So, there's a lot of these businesses and what we want to do is release more and more businesses every year. So, we think there's a lot of growth of our core of those new businesses. But our core business, just one more comment, 70% of our business in our core business is in only five countries. US, Canada, Australia, UK and France. There's a couple hundred other countries in the world that everyone can still grow in our core business. So there's still a lot of growth and for that reason I think we can reaccelerate.
So I'm just trying to get a picture of where those businesses are right now. I mean we look at experiences. I mean how much revenue is experiences generating for the company right now?
They're all very, very early. We don't report on a segment basis so I can't share what those are but I would say that experience is a little ahead of services, a little ahead of hotels and I think each of them will take a few years like we basically put a horizon of three to five years for these to be multi-billion dollar businesses.
