Good morning,

Here’s what’s going on in the vacation rental world this week:

Casago's founder Steve Schwab hands off the reins after building one of the biggest STR management companies in the game, Airbnb's Q4 numbers have a few things hosts should really pay attention to, and guests worldwide can now reserve an Airbnb without paying a dime upfront.

Lets dive in. 

NEWS

Headline Roundup

• Casago founder Steve Schwab steps down as CEO, shifts to chairman role (The Host Report) 

• What hosts need to know about Airbnb's Q4 results (The Host Report) 

• Airbnb rolls out reserve now, pay later to guests worldwide (Airbnb) 

• Why so many STR owner-property manager relationships fall apart (The Host Report) 

• Deloitte report predicts increased STR demand for LA 28 Olympic Games (Airbnb) 

• Tripadvisor investor calls for "meaningful change" (PhocusWire)

• Airbnb launches global host training to help identify human trafficking (Airbnb)

The #1 Priority for 84% of people booking a place to stay is The Location!

INTERESTING INSIGHTS

What Airbnb Told Wall Street This Week, And What It Means for Hosts

I know most hosts tune out when they hear Airbnb’s multi-billion dollar revenue figures. That's fair. But the earnings call is where Airbnb tells investors what's working, and what it plans to change next. Those changes directly impact the profitability of our listings. 

So it's worth tuning in, because the hosts paying attention here can adapt faster than the ones reacting after the update rolls out.

Reserve Now, Pay Later

Airbnb’s $0 upfront booking feature reached 70% adoption among eligible guests.

When it rolled out, hosts were concerned about an increase in last minute cancellations. According to Airbnb’s CFO Ellie Mertz: the aggregate cancellation rate only increased about 1% (from roughly 16% to 17%), 

This means that Airbnb will keep pushing Reserve Now, Pay Later. The company’s stance is that the booking lift outweighs the cancellation cost.

Fee Structure Changes

Turns out that most hosts didn't raise their rates after the host-only fee migration, so the price guests saw dropped slightly. Airbnb framed that as better affordability and higher conversion. But for hosts that didn't raise rates, it represents less revenue per booking.

Here's the line worth flagging: Mertz called the fee restructuring a "foundational move" that lets Airbnb be "more dynamic with our pricing tools as well as our fees." Read that again. It's a signal that the current Airbnb fees will change, and likely go up in the future.

Hotels Are Growing Faster Than Homes

Hotel bookings are expanding at nearly 2x the platform growth rate.

The hotel pilot is live in four major markets (New York, LA, Madrid, San Francisco) with over 20,000 rooms available in New York alone. Airbnb wants Hotels to be a significantly bigger part of the business by the end of 2026. 

Experiences & Services

Airbnb says Experiences and Services are growing, applications are up, ratings are strong, social engagement looks great. 

What they haven't shared for three earnings calls in a row: 

• Attach rate: tells you what percentage of guests are actually booking an experience or service in addition to their stay. 

• Paid seats: tells you how many people are paying to participate in an Experience or Service.

Those are the numbers that would prove real demand. Airbnb poured ~$250 million into these new business lines, and it's unclear if it's actually delivering results. 

I'm guessing here… but if the conversion numbers were really good, I think we'd know by now.

AI Integrations at Airbnb

Airbnb's AI agent is resolving about 30% of North American customer support tickets without a live agent. 

AI-powered search is live for a small percentage of users and still being tested, Airbnb CEO Brian Chesky described it as conversational search that will eventually become full trip planning. 

Airbnb also touched on upcoming listing optimization and pricing tools powered by AI.

Bottom line: 

I believe that the hosts who pay attention to what Airbnb tells Wall Street (not just what it tells hosts) will be the ones best positioned as the platform keeps changing around them. Hope this helps!

MARKET INSIGHTS

Mortgage Rate Snapshot

Mortgage rates defied a strong jobs report and dropped through the week on tame inflation data, ending the week near three-year lows.

Regulations Update

• Idaho House passed a bill preventing cities from regulating STRs more strictly than other residential properties, with Coeur d'Alene's mayor pushing back on the measure 

• Pittsburgh held its first public hearing on STR regulations after multiple shootings at Airbnb properties, with proposed zoning permits for non-owner-occupied rentals 

• Placer County, California (Lake Tahoe), is reviewing a 180-day waiting period for new owners, tiered permits by bedroom count, and a permit exchange program for workforce housing 

• Folly Beach, South Carolina, plans to revisit its voter-approved STR cap throughout 2026 as a council race reignites the debate

See this weeks full regulations report here: (The Host Report)