Airbnb, Inc. Class A (ABNB.US) 2025Q3 conference call: There is still hope for the market size of the homestay market to double.

Airbnb, Inc. Class A held the 2025 Q3 financial report conference call. Airbnb, Inc. Class A stated that 2025 is a year of significant investment for the company. The company has launched new businesses such as services and experiences, and is driving its entry into the market and building awareness. Looking ahead to 2026, revenue from these new businesses is expected to achieve scalable growth, with investments continuing but not as substantial as the first year of launch. The company is able to undertake these investments while improving the efficiency of its core business, leading to an increase in net income and profit margins. Regarding its core residential business, the company believes that the business is far from mature. Taking Airbnb, Inc. Class A's market as an example, for every person who chooses a homestay, there are approximately nine people staying in hotels. The company believes that the scale of the homestay market still has the potential to double. With improvements in the supply system, pricing tools, and product quality, the company sees strong growth potential. There are reasons to believe that in the coming years, the core business will accelerate its expansion in more countries, especially as the new generation of travelers prefer homestays, presenting an important opportunity for the company. Q&A: Q: "Book Now, Pay Later" service How much growth in bookings for the US market has been contributed by this service? Has there been an increase in cancellation rates? Will there be more payment tools introduced in the future to drive growth? A: The service was launched in the beginning of the third quarter and is applicable to users who book accommodations within the United States and choose flexible or moderate cancellation policies, with about 70% of eligible users choosing the service. While there has been a slight increase in cancellation rates, through prior testing and monitoring, it has been confirmed that the net booking volume continues to grow, making a positive contribution to the overall business. In the future, we will continue to optimize payment tools to promote booking growth. Q: In the next two to three years, how should investors view the execution period and investment depth needed to achieve international market goals, as well as how to increase business density beyond the current core markets? A: Airbnb, Inc. Class A initiated a global expansion plan about two to three years ago, using a cautious localization strategy to ensure that products and marketing can adapt to local needs. Take Latin America as an example, the local market especially in Brazil has been deeply cultivated for many years, currently not only maintaining a solid market share but also expanding it continuously. Starting last year, we also launched a localization team for the Japanese market and have seen initial results. Overall, the progress in different regions varies, but the company always insists on steady and continuous investment to ensure substantive growth in key markets. Q: Has the Experience and Activities business already contributed to performance? Can it improve user retention or platform engagement? What are the future expectations? A: Since its launch in May, we have observed that about half of the experience bookings are made by users who did not simultaneously book accommodations, with 10% being first-time users of Airbnb, Inc. Class A, helping us attract a completely new user group; local demand is also emerging, such as 70% of original experiences booked by local residents in Paris. Although this business is expected to take 3 to 5 years to become a significant revenue component, it helps drive platform differentiation, and by displaying accommodation and experience content in the same ad, it enhances users' interest in accommodation bookings. Data related to retention rates still need to be verified over a 12-month period, but initial indications show that the Experience business has a positive effect on user growth, platform engagement, and competitive advantage. Q: As the US market accelerates its recovery, does Airbnb, Inc. Class A plan to restructure its hotel business, especially in areas it previously exited? A: The hotel business is one of the future opportunities that the company is clearly focusing on. Currently, we have piloted access to hotel resources in New York, Los Angeles, and Madrid, especially in markets where supply is tight or regulated, hotels can effectively supplement platform supply and attract Airbnb, Inc. Class A's existing high-quality customer base without additional demand stimulation. We believe that homestays and hotels are not completely substitutable, but complementary choices for different scenarios, such as families or long-term stays being more suitable for homestays, while business or short-trip travelers are more inclined towards hotels. As hotel resources are easily scaleable and the platform itself has strong traffic and conversion capabilities, this business will become an important complement to the core business in the future. Q: Besides filling supply gaps, does Airbnb, Inc. Class A see a path for hotel commoditization and booking experience expansion beyond just supplementary demand? And is there long-term development space? A: We aim to make Airbnb, Inc. Class A a top-tier one-stop travel platform, and to become such a travel service provider, we need not only accommodations, not only services, not only experiences - because Airbnb, Inc. Class A needs to create a comprehensive product matrix. The hotel business is a key part of this. In the long term, hotels are not only used to supplement shortages in homestay supply, but are also an important means to serve personalized travel needs. We will focus on accessing boutique and independent hotels globally, especially in markets like Europe that have yet to be fully covered. With AI-driven personalized recommendations, we will match suitable room types based on travelers' travel purposes, such as business travelers or short-term travelers being more likely to get hotel options, while users seeking local immersive experiences are more suitable for homestays. Q: Will there be new billion-dollar level products launched in 2026? Will the focus be on hotels, AI, and experience businesses, or are there other plans as well? A: Yes, we plan to launch at least one new business each year. This year we have officially launched experience services, and the hotel business has also entered the pilot phase. Both of these have the potential to grow into multi-billion dollar businesses. Looking ahead, we will adopt a more flexible incubation model, testing multiple new projects in a few cities before global rollout. Currently, we are not only experimenting in the hotel sector, but also exploring other potentially lucrative niches such as high-end luxury accommodations. While details have not been announced yet, it is certain that new businesses will be incubated and launched every year. Q: How is the progress of the AI search function testing? Has it changed the user experience of Airbnb? Additionally, what are the key milestones for the experience and hotel businesses in the next three years? A: The AI search function is currently in the testing phase, and we are working to enable users to describe their needs naturally, like having a conversation, and then the system generates structured and more personalized results. The goal of this function is to empower the entire user journey - from search to booking to check-in and review, and the progress so far is encouraging. In terms of the experience business, we are conducting in-depth testing in cities like Paris and Los Angeles and have seen strong demand from local users and repeat visitors. We are gradually verifying the product-market fit and expect that in the next 3 to 5 years, experiences and hotels will be jointly developed as scalable growth engines, replicating through a city pilot mode to more markets. Q: From the perspective of guests or hosts, what are the most urgent pain points that Airbnb currently needs to improve? A: Despite having completed 65 major optimizations, there is still plenty of room for improvement in the future. Current priorities include: continuing to enhance payment flexibility, such as features like "Book Now, Pay Later" and installment payments; optimizing cancellation policies and discount mechanisms to increase user stickiness; strengthening quality management to narrow the gap in consistent experiences with hotels; and continuously improving pricing tools to enhance price competitiveness. Additionally, we are turning map and location information optimization into a core competitive advantage for the platform, and all improvements are being pushed forward at a high speed. Q: Can you further explain the incremental investment plan for 2026? Also, what are the reasons for the accelerated maturity of core business in some markets over the past few years, and where is the future growth potential? A: 2025 was a year of significant investment for us, as we launched new businesses such as services and experiences and drove their entry into the market and awareness building. Looking ahead to 2026, revenue from these new businesses is expected to achieve scalable growth, with investments continuing but not as substantial as the first year of launch. We are able to undertake these investments while improving the efficiency of our core business, leading to an increase in net income and profit margins. Regarding our core residential business, we believe that the business is far from mature. Taking our market as an example, for every person who chooses a homestay, there are about nine people staying in hotels. We believe that the scale of the homestay market still has the potential to double. With improvements in the supply system, pricing tools, and product quality, we see strong growth potential. There are reasons to believe that in the coming years, the core business will accelerate its expansion in more countries, especially as the new generation of travelers prefer homestays, presenting an important opportunity for us. Q: Why did Airbnb, Inc. Class A not participate in the launch integration of the ChatGPT application? A: We felt that the integration proposal at the time was not mature enough, as users needed to download the application first to use it, which was not convenient enough. Also, we do not want Airbnb, Inc. Class A to be seen as a generic data layer or ordinary product display. We insist on highly customized integration methods and ensure that users understand the unique value of Airbnb, Inc. Class A. We may still collaborate deeply with chat-based products in the future, but it needs to be done in the right way. Q: Can you elaborate further on the expectations mentioned in the September Skip Travel conference for accelerating business growth? A: We will start by revitalizing our core business. Currently, for every person who chooses Airbnb, Inc. Class A, there are about 9 people choosing hotels; many people actually prefer to stay in homestays but we need to continue improving in terms of "price competitiveness, quality, services, supply volume". We are pushing more high-quality accommodations onto the global market, with the increasing supply, lowering prices, and improving bookings forming a virtuous cycle, we are confident in restarting the growth of the core business; except for policy restrictions, we have not seen truly mature global markets. Q: While developing the AI search internally, will third-party applications be allowed to build discovery experiences on Airbnb, Inc. Class A? Can these coexist with the internally developed AI search? A: We maintain an open but cautious attitude. About 90% of traffic comes from direct or non-paid channels, and we are confident in providing the best travel search experience on the Internet and believe that "specialization" will win out in the travel industry. We are willing to display inventory on other platforms, but it depends on the type of inventory and the value it can bring, taking a case-by-case evaluation of platform integration; in the future, Airbnb, Inc. Class A will appear in multiple platforms and application scenarios. Q: Will the focus areas and new testing modes for the next year impact the plans you've previously mentioned, such as loyalty programs or the advancement of advertising business? A: These projects can progress in parallel. For example, the service-oriented hotel business can be implemented city by city, and our new testing modes allow for the simultaneous incubation of multiple new businesses before selecting the best for expansion. Loyalty programs and advertising business are more platform-focused and are expected to scale more quickly. We are advancing both, with the loyalty program not following the traditional points system but aiming to create a customized, unique, and community value-aligned solution; the core of the advertising business lies in combining the AI search under development to fundamentally reshape the advertising model. We will not disclose specific plans in advance, but there will be more product launches next year.