Airbnb

“In addition to our proprietary technologies, we use AI and ML Technologies licensed from third parties.”

“Developing, testing, and deploying AI and ML Technologies also increase associated computing costs.”

“Other items primarily include expenses and costs related to data hosting services, insurance, customer relations, and software and equipment.”

“The great thing about Airbnb is two points. Number one, we do not need to make any major capital investments. We are not buying up a whole bunch of GPUs. Second, the inference costs of Airbnb are de minimis relative to the ROI of our business model.”

“I think that what you're seeing is the cost of tokens to develop products and the inference costs to run the models pales in comparison to the incremental revenue we generate and the incremental output or throughput we're seeing. I'm sure we could always be a little more efficient, but I think we're really, really disciplined. We're not so-called token maxing, which I think is this thing where I think all these CEOs at the beginning of the year have this mandate.”

“I would just add tactically, in the updated guidance that we provided, it obviously does assume a material increase in terms of the AI spend over the course of the year. I would note that, yes, we are expanding margins while absorbing that increased cost.”

“Across some of our key initiatives, we've reduced the time from concept to launch by as much as 60%. Compared to the same six months last year, we've increased the number of features and improvements we shipped this year by nearly 80%. The acceleration from AI allowed us to make hundreds of improvements across Airbnb for hosts and guests.”

“I think that what you're seeing is the cost of tokens to develop products and the inference costs to run the models pales in comparison to the incremental revenue we generate and the incremental output or throughput we're seeing. I'm sure we could always be a little more efficient, but I think we're really, really disciplined. We're not so-called token maxing, which I think is this thing where I think all these CEOs at the beginning of the year have this mandate.”

“So now we're going much bigger on generative AI. I think we're gonna see. I think we're gonna see the biggest impact is gonna be on, you know, customer service in the near term.”

“It incorporates sophisticated AI into key areas, from fraud detection, to personalized listing matching and enabling customized and real-time community support.”

“Development, maintenance and operation of AI and ML Technologies requires additional investment in the development of proprietary datasets, machine learning models, and systems to monitor and test for accuracy, bias, and other variables, which are complex, costly, and could impact our profit margin as we expand the use of AI and ML Technologies in our offerings.”

“First of all, like, you know, we've been using AI for a long time. In the last 12 months, we've made a lot of progress. I'll just give you three examples of things we've done with AI. You know, we made it easier to host. We have a computer vision model that we trained on 100 million photos, and that allows hosts to, like, the AI model, to organize all their photos by room.”

“Product development expense primarily consists of personnel-related expenses and third-party service provider fees incurred in connection with the development of our platform, and allocated costs for facilities and information technology.”

“This is a culmination of changes we've been making over the last several years. We've rebuilt Airbnb from the ground up to be an AI-native company.”

“First, we hired our CTO, Ahmed Abdalla. He was the leader of Meta Llama models. He came in, I think we went from a company that was a middle-of-the-pack company for AI to a leader in AI, at least amongst companies that are not frontier labs or hyperscalers.”

“I would just add tactically, in the updated guidance that we provided, it obviously does assume a material increase in terms of the AI spend over the course of the year. I would note that, yes, we are expanding margins while absorbing that increased cost.”

“We’ve rebuilt Airbnb from the ground up to be an AI-native company, and it’s showing up in our results. AI, combined with an exceptional team and better execution, is why we’re building and iterating faster than ever before.”

“Product development expense increased $62 million, or 10%, primarily due to a $62 million increase in payroll-related expenses resulting from an increase in average headcount.”

“As of December 31, 2024, we relied on a global network of approximately 11,000 third-party workers to handle the vast majority of our community support contacts.”

“Operations and support expense primarily consists of personnel-related expenses and third-party service provider fees associated with community support provided via phone, email, and chat to customers”

“The cost of maintaining robust community support is expected to rise, and efforts to reduce support requests may not offset these costs, materially adversely affecting our business, results of operations, and financial condition.”

“So now we're going much bigger on generative AI. I think we're gonna see. I think we're gonna see the biggest impact is gonna be on, you know, customer service in the near term.”

“It incorporates sophisticated AI into key areas, from fraud detection, to personalized listing matching and enabling customized and real-time community support.”

“We currently use AI and ML Technologies in our offerings, for example with respect to fraud detection, search, enabling customized features and enhancing community support.”

“Over time, we're gonna bring the AI capabilities from customer service to search and to the broader experience, and the end game is to provide basically an AI-powered concierge. So that's where it's going, but it's really focused on customer service at this very moment.”

“Our AI assistant is now available in more than 50 languages. Nearly 45% of issues that start with our AI assistant are now resolved without a human agent, while delivering much faster resolution times. Later this year, we will begin introducing AI voice support, extending the experience to phone call.”

“AI isn't just making the product better, it's also making Airbnb more efficient. In Q2, customer support costs per booking declined about 16% year-over-year, driven in part by improvements by our AI assistant. We expect those costs to continue to decline as our AI assistant resolves more and more issues, and of course, as we bring it to voice.”

“Our adjusted EBITDA margin expansion of over 100 basis points compared to last year was driven by strong revenue growth and cost efficiencies in operations and support and product development, partially offset by continued investment in sales and marketing.”

“On the flip side, the early offsets that we're already realizing, one is obviously the improvement in our customer service cost. We call that out in the letter. The customer service cost per booking is down about 16% year-over-year, in large part due to the AI agent. Second, what we're seeing is that we don't need to grow our head count at levels that we did in the past because we're getting so much more output and speed from our existing workforce, which obviously, also creates efficiencies over time.”

“AI is also transforming customer support. Our AI assistant, now available in more than 50 languages, has 3 been rated the best AI support assistant in travel. Nearly 45% of issues that begin with our AI assistant are now resolved without a human agent, up from Q1, while delivering much faster resolution times.”

“In Q2, our customer support related cost per booking declined approximately 16% year-over-year, driven in part by improvements to our AI assistant. We expect this cost to continue declining as our AI assistant resolves a broader range of issues and we introduce new capabilities.”

“Operations and support expense increased $29 million, or 9%, primarily due to a $27 million increase in payroll-related expenses driven by higher average headcount, a $10 million increase in customer relations costs driven by higher make-good payouts and related case reserves, and a $7 million increase in insurance costs driven by higher host liability insurance premiums. These increases were partially offset by a $17 million decrease in third-party service provider costs due to lower agent contact volume resulting from increased use of artificial intelligence (“AI”) in community support.”

“These increases were partially offset by a $15 million decrease in third-party service provider costs due to lower agent contact volume resulting from increased use of AI in community support.”

“Product development expense primarily consists of personnel-related expenses and third-party service provider fees incurred in connection with the development of our platform, and allocated costs for facilities and information technology.”

“So there's an opportunity to, at the margin, add more personnel over the course of the year to allow us to accelerate that roadmap, and you would see that on, in particular, on the product development line item.”

“These continued technological investments aim to create a robust platform that allows us to more quickly adapt to the needs of our hosts and guests around the world and increase the productivity of our product development organization.”

“Across some of our key initiatives, we've reduced the time from concept to launch by as much as 60%. Compared to the same six months last year, we've increased the number of features and improvements we shipped this year by nearly 80%. The acceleration from AI allowed us to make hundreds of improvements across Airbnb for hosts and guests.”

“AI is accelerating this work across search, sign-up, checkout, and payments. By reducing friction across the guest journey, we are converting more traffic into bookings, and that's become one of the biggest drivers of our growth. We improved search and discovery, making it easier for guests to find and book the right home, hotel, service, or experience, and it's meaningfully improving conversion. We also introduced AI-generated listing highlights so guests can quickly understand the key details about a home. We also launched AI-powered review highlights, surfacing what guest reviews say about a home's location, amenities, and more.”

“Our adjusted EBITDA margin expansion of over 100 basis points compared to last year was driven by strong revenue growth and cost efficiencies in operations and support and product development, partially offset by continued investment in sales and marketing.”

“On the flip side, the early offsets that we're already realizing, one is obviously the improvement in our customer service cost. We call that out in the letter. The customer service cost per booking is down about 16% year-over-year, in large part due to the AI agent. Second, what we're seeing is that we don't need to grow our head count at levels that we did in the past because we're getting so much more output and speed from our existing workforce, which obviously, also creates efficiencies over time.”

“We’ve rebuilt Airbnb from the ground up to be an AI-native company, and it’s showing up in our results. AI, combined with an exceptional team and better execution, is why we’re building and iterating faster than ever before.”

“Product development expense increased $62 million, or 10%, primarily due to a $62 million increase in payroll-related expenses resulting from an increase in average headcount.”

“It's a combination of stronger execution, a world-class team, and an innovation model that is accelerated by AI. This is what's creating the momentum across our business.”

“We are seeing, again, we're able to develop products more quickly. We're able to attach a lot more products and services.”

“First of all, like, you know, we've been using AI for a long time. In the last 12 months, we've made a lot of progress. I'll just give you three examples of things we've done with AI. You know, we made it easier to host. We have a computer vision model that we trained on 100 million photos, and that allows hosts to, like, the AI model, to organize all their photos by room.”

“Number two, we launched last week, AI-powered Quick Replies for hosts, so basically predicts the right kind of question or answer for a host to pre-generate, to provide to guests, and this is, you know, been really helpful.”

“So we created a tool called the Compare Listings tool, where people can see how much other people are charging in the neighborhood, and they can actually see people who are getting booked and not getting booked.”

“It delivers deep business intelligence insights to manage our marketplace, including pricing insights and occupancy optimization for our hosts.”

“We partner with hosts throughout the process of setting up their listing and provide them with a robust suite of tools to successfully manage their listings, including scheduling, merchandising, integrated payments, community support, host protections, pricing tools, and feedback from reviews.”

“AI is also making it easier to host. We know that as hosts are more successful when they have the right price, the right insights, and the right tools, and AI is helping us improve all three. We made it easier for hosts to set competitive prices and get more bookings. We also gave hosts more actionable insights to help them improve their listings and increase their earning potential. We're rolling out AI tools that help new hosts get started faster and better understand their pricing and earning opportunities.”

“We are essentially building an entirely new pricing model. No surprise, it will be powered by AI. AI is able to take in a lot of data sources.”

“For hosts, we’re rolling out AI-assisted tools that make it easier for them to create a listing and understand pricing and earning opportunities.”

“Building AI into every part of the trip As part of our 2026 Summer Release, we introduced AI tools that make Airbnb easier to use at every stage of the trip.”

“I don't think anyone is going to be better than AI at doing this. I think that our models are going to be very, very powerful, and I hope in the future, hotels can even use that.”

“We currently use AI and ML Technologies in our offerings, for example with respect to fraud detection, search, enabling customized features and enhancing community support.”

“And we, over the last year, the last twelve months, we've likely driven at least a few hundred basis points of incremental growth just through optimizations of the search flow, because we just get so much traffic.”

“Over time, we're gonna bring the AI capabilities from customer service to search and to the broader experience, and the end game is to provide basically an AI-powered concierge. So that's where it's going, but it's really focused on customer service at this very moment.”

“AI is accelerating this work across search, sign-up, checkout, and payments. By reducing friction across the guest journey, we are converting more traffic into bookings, and that's become one of the biggest drivers of our growth. We improved search and discovery, making it easier for guests to find and book the right home, hotel, service, or experience, and it's meaningfully improving conversion. We also introduced AI-generated listing highlights so guests can quickly understand the key details about a home. We also launched AI-powered review highlights, surfacing what guest reviews say about a home's location, amenities, and more.”

“To the second point on AI search. Good news, we are beginning to put it in test this month. That test is going to be a very small % of our traffic, and based on those results, we are going to then begin to expand it to more traffic over the course of this year.”

“You see the entire journey, not just AI search, is going to be powered by AI. What this will feel like is it's going to feel as, or almost as conversational as a chatbot. Hopefully less chatty, in fewer words, because we think travel's more visual. Very personalized. What this will mean is much higher conversion rates.”

“For guests, our AI models can now generate highlights from host listing descriptions and guest reviews, making it easier to quickly find information about the things they care about most, like location, amenities, or whether a home is family friendly.”

“Building AI into every part of the trip As part of our 2026 Summer Release, we introduced AI tools that make Airbnb easier to use at every stage of the trip.”

“The way we're initially going to roll it out is the default is going to still be the core search. Above, you'll see a toggle. Once you've turned the toggle on, you're going to be able to try the new AI search. We'll have to see how it converts.”

“It incorporates sophisticated AI into key areas, from fraud detection, to personalized listing matching and enabling customized and real-time community support.”

“We currently use AI and ML Technologies in our offerings, for example with respect to fraud detection, search, enabling customized features and enhancing community support.”

“we compete on inventory uniqueness, value and all-in cost, brand and reputation, platform usability, search relevance and personalization, trust and safety, and customer support.”

“AI is accelerating this work across search, sign-up, checkout, and payments. By reducing friction across the guest journey, we are converting more traffic into bookings, and that's become one of the biggest drivers of our growth. We improved search and discovery, making it easier for guests to find and book the right home, hotel, service, or experience, and it's meaningfully improving conversion. We also introduced AI-generated listing highlights so guests can quickly understand the key details about a home. We also launched AI-powered review highlights, surfacing what guest reviews say about a home's location, amenities, and more.”

“We have really, really good personalization, and we know now with our personalization, and really driven by AI, whether someone wants to see just homes, just hotels, or both.”

“If consumers become less reliant on search engines for travel searches and instead incorporate AI and machine learning and other channels, we may not be able to optimize for searches on these emerging channels and may risk losing traffic to competitors.”

“I think, you know, primarily that is because the majority, you know, 90% of our traffic is coming to us through direct or unpaid traffic”

“internet search engines, such as Google and those powered by AI, including its travel search products;”

“If consumers become less reliant on search engines for travel searches and instead incorporate AI and machine learning and other channels, we may not be able to optimize for searches on these emerging channels and may risk losing traffic to competitors.”

“We also face competition from search engines like Google, which can influence search traffic and promote their own travel services, potentially disintermediating our platform.”

“Last year, I told our company that AI is an existential risk to us. It was the only existential risk to this company. Now, policy is a risk, but it's not an existential risk.”