Ocotillo by Open Air Homes
Reflecting on Past Programs and Envisioning a More Inclusive, Host-Friendly Future
The curtain falls on Airbnb Plus, a program launched with fervor and promise in 2018, only to sputter and fade in the ensuing years. It sought to elevate properties that met nearly 100 meticulous design standards, with annual inspections and an exclusive listing commitment from hosts. But now, as Airbnb confirms the discontinuation of the Plus program, a reflective pause ensues among hosts and guests alike.
A statement from Airbnb reads, “Though guests will no longer see the Plus banner in their search, they will still be able to find and appreciate the unique design and positive reviews of these listings and their hosts.” The move speaks to an inherent challenge in balancing host incentives with guest expectations—a theme echoing through Airbnb’s various ventures, notably the Luxe program.
The Pitfalls and Shortcomings of Airbnb Plus
While the demise of Airbnb Plus might appear as a setback, it’s also a testament to the complex dynamics of the vacation rental market. Hosts found it to be a perplexing navigation, while guests often stumbled upon confusion regarding the exact benefits and guarantees of booking a “Plus” property. Hosts were quick to sign up and happy to be included, yet guests were often confused why certain Airbnb pages looked different from others, and what was the actual benefit of paying extra to book a Plus home.
As CEO of vacation rental channel manager RedAwning, Tim Choate, candidly put it to Skift: Airbnb Plus “never made sense for hosts,” citing the limitation of exclusivity as a potential dampener on property earning potentials. Furthermore, an unnamed executive at a property management company pointed out a fundamental flaw: “The Plus properties were great, but so are a lot of other properties, so it never made sense to consumers, in my opinion.”
A Hard Look at Airbnb Luxe: What Needs to Change?
The folding of Airbnb Plus nudges the spotlight onto another of Airbnb’s ventures: The Luxe program. It looms in the balance with its higher host fees and mandatory concierge services, sometimes placing hosts into unfamiliar and arguably inconvenient operational frameworks.
To give you some history, Airbnb purchased Luxury Retreats in 2017 for around 300 million dollars, and over the next year, turned Luxury Retreats into Luxe.
At Open Air Homes, we were excited to have our homes on this platform and excited for the future of Luxe. However, we were having success on “Airbnb Marketplace,” Airbnb’s traditional rental platform, and didn’t want to have our homes only on the Luxe platform for fear that we wouldn’t get the same traction, success and bookings. So we did what a number of hosts did, and added our homes to both platforms.
It was at that time that we learned Airbnb was charging a higher commission split to be a part of the Luxe platform than the Marketplace platform, and therefore, in order to make our homeowner partners the same amount of money per booking, we increased our pricing on Luxe so that their net revenue would be the same on both platforms.
Herein lies a crucial juncture for Airbnb to glean insights from the past and pivot towards a more equitable, transparent, and host-friendly Luxe program. The mandates for price parity, combined with the steeper commission rates, have caused hosts to balk or exit the Luxe platform altogether.
So, with the shuttering of Airbnb Plus, we have to ask, is Luxe next? Should all of the homes on the Airbnb platform be treated exactly the same? If Airbnb decides to keep Luxe, will they eventually offer price parity to us hosts so that we will want to rejoin the platform?
Forging Ahead: Recrafting Luxe for a Balanced Future
The path forward for Luxe, especially in the light of learning from Plus, is arguably simple: establish commission rates for Luxe that mirror those of the traditional Airbnb marketplace. Doing so could potentially usher back hosts who’ve departed the platform in search of fairer, more lucrative horizons.
At Open Air Homes, we advise our homeowners to forgo Luxe at this present time, unless they have a home that is at the 0.1% top of the market in Los Angeles or Palm Springs. We were having more success on the Airbnb Marketplace platform, and we were not willing to have our homeowners take home less money on the Luxe platform for a same booking through the Marketplace platform.
If Luxe can reinvent itself into a platform that honors the high-quality experiences offered by hosts without dampening their revenue with inflated commission fees, it might find a harmonious niche within Airbnb’s overarching ecosystem.
The Market Awaits: Adaptive, Equitable Solutions
As the global travel and hospitality landscape continues to ebb and flow, platforms like Airbnb have the opportunity—perhaps even the obligation—to sculpt programs and platforms that resonate authentically with both hosts and guests. They are equal shareholders, and for a while Airbnb was growing so quickly that they prioritized guests over hosts. We wait to see how Airbnb adapts over the coming years to really prioritize hosts and our ability to run, grow and create sustainable businesses on their platform, and are hopeful that the Luxe platform will transform to be something of use to hosts in the future.
With a considered, balanced approach, Airbnb can successfully cater to various market segments, from the budget-conscious traveler to the luxury seeker, while maintaining a robust, mutually beneficial relationship with its hosts. This endeavor, underlined by fairness and perceptiveness, will be crucial in forging a future where hosts and platforms thrive side by side.