Airbnb CEO: 'There's no way... people are mostly going back to an office'

Airbnb Co-Founder and CEO Brian Chesky Tape joins Yahoo Finance Live to evaluate the reality of long-term hybrid work weeks, along with the hybrid living lifestyle his company enables for travel and homeownership.

Video Transcript

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- Airbnb co-founder and CEO Brian Chesky tells Yahoo Finance that we're in a travel revolution. Julie and yours truly sat down with Chesky to dig into his thesis.

BRIAN CHESKY: Now that you can work on-- via Zoom from home, CEOs are realizing they can get a lot of work done, there's lower costs, they can hire more diverse talent pool, and employees like working from home. In fact, many of them are saying if they have to go back to an office five days a week, they're going to quit and go to a different job. So I think remote work is here to stay.

If we believe Zoom is here to stay, then we must believe, I think, remote work is here to stay. And if we believe remote work is here to stay, then I think what we're saying is that for tens of millions of people, maybe hundreds of millions of people, they're not as tethered to one location. So now, they can travel nearly anywhere, nearly anytime. And when they do travel, they can stay longer. And we are seeing this in our data.

Mondays and Tuesdays are our fastest-growing days of the week for families. When they can, they're extending their trips. You know, we're seeing that people are going not just to the big hot spots. They've booked 100,000 destinations since the pandemic began on Airbnb, including 6,000 places for the first time ever.

But the most important trend is this third trend. When people are traveling, they're staying longer. One fifth of our business by room nights booked are monthly stays. That's not even travel. And that will probably continue to grow. So what it means is people aren't just traveling on Airbnb, they're now living on Airbnb. And this is because this newfound flexibility that's come from the pandemic.

Again, if you believe Zoom is here to stay, if you believe remote work is here to stay, then I think you believe this flexibility is here to stay. And I think that will create one of the biggest changes to travel since the invention of the internet or the invention of the airplane. That, to me, is a revolution.

- So Brian, I think we all think that remote work is here to stay. The question is to what extent, right? I've been watching the teleworking numbers from the government really closely, and in October, only 11.6% of people, full-time workers in the US were teleworking at some point during that prior month because of the pandemic. And that's down from something like more like a quarter of all workers. And so this is a number that has been trending downward. So what-- I guess how big do you think this trend is going to be? And at some point, aren't most people going to go back to an office?

BRIAN CHESKY: No. No way. There's no way I think people are mostly going back to an office. Let's break these down. The largest companies in the world-- PricewaterhouseCooper, Amazon, Procter & Gamble, Ford are just four that come to the top of my head-- have announced permanent flexible policies for a large percent of their employees. Most CEOs have not forgotten the lesson of all the money they're going to save from the lack of real estate they need. And the fact is that, if a company is only hiring people within 30 miles or [INAUDIBLE], they're at a disadvantage of people can hire from anywhere. That's number one.

Survey after survey-- we've conducted a survey, surveys I've seen-- show that if people are forced to go back to office five days a week, they're going to resign. I think it's part of the great resignation that we're seeing is a great reevaluation of work. I don't believe that we're going to live in a world where everyone's nomadic and no one's ever gathering in person in real life. I sure hope not.

That would be actually quite dystopian. It would be like us living in the movie "Wall-E." But I don't think that we're all going back to the office five days a week. I don't even think we're all going back in office four days a week. And all you have to believe is people aren't going back to the office four or five days a week to truly believe that everything is going to change.

The last thing I'll just say is this moment right now is the worst technology will ever be in our lifetime. You know, wait til satellite internet is completely ubiquitous and everyone has high-speed internet, that camera technology improves, bandwidth constraints, screen technology improves. We have to project forward. I think we're living in a revolution of work. And so that's what I think. I'm going to go on record saying that. We can revisit this in a number of years, but I'm going to go in on the idea that flexibility is here to stay. But that doesn't mean everyone's nomadic, it's just they're not going back to 2019.

- Gotcha. Well, I guess if we're going like "Wall-E." Maybe the next phase of technology will take us to Airbnbs in space. I don't know. I don't know where all of those threads go. I'm just curious for you personally how this is all playing out. I mean, obviously, you're at home, or in what looks like a home-like setting behind you.

BRIAN CHESKY: I'm at my home.

- Have you been traveling and working? Have you been going back to the office at all?

BRIAN CHESKY: I've not been going-- I've not gone back to the office. I think I went, like, once to do like a small little offsite, but I've not been back the office and worked in two years, or a year and a half. So let me break down. I'm in my San Francisco house. Last year, I spent a bunch of time living in New York.

I intend to start to live-- like, kind of I want to walk the talk and live anywhere, and so I'm probably going to go away and live somewhere else for the month of December, maybe even January, because I don't have to be in San Francisco. And as it gets cold, you know, I think Mark Twain is the one who said the coldest winter I ever spent was a summer in San Francisco. So I might go somewhere else for a little bit of time, as well.

As far as going back to the office, I do hope-- we are going to all regather, but I don't-- we're not going to go back five days a week or four days a week, probably not even three days a week. We're still figuring it out. We're not requiring people come back to the office till next September. But even when we do, we're going have to put out what our exact policy is.

The trend I'm seeing is you notice everyone said, oh, we're all coming back to the office. But then it was hybrid. Now hybrid is becoming hybrid, remote first, with a lot of exceptions. Now, manager discretion. Amazon said managers have discretion. I think you're going to see a world that's just going to keep trending to be more and more flexible.

But I'll just say one last thing. Human connection in the real world matters. There are limits to what one can do digitally. And I do think this digitization of the world, though exciting, efficient, fast, it's got a huge risk, because then that's like the movie "Wall-E." If we're all staring at the screens, I don't think anyone's ever changed someone's mind in the YouTube comments section.

I don't think offices should be only digital. I do think there's a reason why real human connection exists. But real human connection doesn't need to be in a office three, four or five days a week. I think there is going to be other solutions that will be more sustainable to how people want to live in the future.

- Brian, well, if you are traveling around this holiday season, is your place up for rental? Can I stay at it?

BRIAN CHESKY: I would like to put my place up. And now that we have AirCover, top to bottom protection free for every host, I have good reason to do it. So come on over.

- What is AirCover, Brian? Take us through that.

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BRIAN CHESKY: I had to do my like kind of shameless, like, pitch man plug for a second because I had to get a little corporate for a second. But let me just say, you know, this is a really important thing. We're seeing a record number of people wanting to become hosts. It makes sense why. A lot of people are quitting their jobs, they're reevaluating their life, and they're realizing supplemental income is a really nice thing that gives them more optionality.

But the big-- as we survey people and ask why aren't you hosting, the biggest reason we got was people were afraid that something was going to happen to their house. And though incidents are incredibly rare, we wanted to try to take this risk off the table. So we now provide $1 million of personal liability insurance, so the guest gets hurt. We provide $1 million of damage protection. We cover deep cleaning protection, pet damage protection.

So we're trying to provide as much protection as possible. We call it AirCover because we give you air cover. It's totally free, every single reservation. And we're the only ones that offer it. So I think this is going to help create a lot more hosts in the world.

- Brian, totally free for hosts. Not free for you guys. What's the cost associated with AirCover for you all? You did that big investment in marketing, and that's something that kind of comes and goes. Something like this doesn't come and go. Like, once you spend this, you're always going to be spending it.

BRIAN CHESKY: That's right. But the interesting point is this is an expense we've had for 10 years, because 10 years ago, we created the industry-first Airbnb guarantee, which was a $50,000 guarantee. That became a $1 million guarantee. We've been paying for this for years. What AirCover is, is built on top of this investment we made for the last 10 years. We've rebuilt the program top to bottom. It is incremental investment, but most-- the vast majority of the cost we've already bared, and it's already in our P&L.

- Brian, this comes at a good time, I imagine, as we have seen the travel ban lifted. What are you seeing in bookings right now, and then what are you seeing as we look toward next year?

BRIAN CHESKY: Yeah, great question. So really interesting, when the pandemic hit, we lost 80% of our business in eight weeks. And I think if you remember any headlines from April, a variety of headlines were like, is this the end of Airbnb? Will Airbnb exist? These were articles.

We had a big rebound. The reason why was because people were traveling longer, they were staying nearby, and they were booking entire homes. That covered the gap of people that weren't crossing borders and they weren't traveling to cities. We are now, before borders had fully reopened in Q3, above 2019 levels.

On October 15th, President Joe Biden announced that the US borders would be reopened to international tourists starting November 8th, which was two days ago. That week, we saw a 44% increase in bookings on our platform for people coming to the United States. If that's any indication, I expect that all the benefit we've had from the pandemic will stay because flexibility is here and people are going to keep living at Airbnb, but we're going to now add cross-border travel in the mix. And I think that's going to be a huge boon to travel. That's my prediction.