Good morning,

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

Airbnb added an insurance exception to its new house rules policy (hosts can use a guest contract if their insurer requires one), Tripadvisor’s CEO and CFO are both on their way out, and we break down what Airbnb told Wall Street on its Q3 earnings call (and what it means for hosts).

Lets dive in. 

NEWS

Headline Roundup

• Airbnb adds an insurance exception to its new house rules policy (The Host Report)

• Airbnb sells IP to Brian Chesky’s private AI lab for $7.1 million (The Host Report)

• Breakdown of Expedia (Vrbo’s parent company) Q3 earnings call (TipRanks)

• How to protect your property as Airbnb limits guest agreements and ID checks (The Host Report)

• KeyData’s holiday pacing shows Thanksgiving and New Year’s RevPAR up double digits (KeyData)

• Booking takes $1 billion hit to Q3 results as the FTC looks into allegedly deceptive practices (Reuters)

• Tripadvisor’s CEO and CFO are both on their way out (PhocusWire)

• OpenAI acquires Odessia, the AI travel agent from Sonder founder Francis Davidson (X)

• LocalVR acquires Wilson Peak Properties in Big Sky (Nearsight)

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INTERESTING INSIGHTS

5 Insights From Airbnb’s Q3 Earnings Call

#1 The Financials

Overall, this was one of the best quarters that Airbnb’s had in a while:

#2 - RNPL Cancellations are Rising

Reserve Now, Pay Later is working for Airbnb. It added about 3% to nights and seats booked growth this quarter (16% vs. 13% without it). 

But the cancellations are starting to catch up.

In February, Airbnb said RNPL had pushed its overall cancellation rate up only about 1%, from 16% to 17%. Mertz called it “not hugely material”. 

On this call, she said the cancellation rate is now about 19% (up 2% to 3% from a year ago). She called that “very healthy” (for Airbnb).

Mertz also said Q3 was “the peak in terms of net impact of RNPL.” The booking lift shows up first and the cancellations come later, so the net boost to nights booked will shrink in Q4.

Increasing cancellations from RNPL is a scary trend for hosts and PMs.

#3 Will AI Agents Cut Airbnb Out Of The Transaction?

Brian Chesky clearly had AI on his mind during this earnings call.

He brought up the threat of AI agents 4 different times. His main point was: general AI agents are great for simple tasks, but travel is too complex, so specialists will win. And he didn't just answer questions about AI’s threat to Airbnb… he brought it up on his own twice, including in his opening remarks, and again as a tangent when an analyst asked him something else. 

Then, after the earnings call, he got into it with a stock analyst account on twitter. 

The analyst basically said that AI agents could threaten Airbnb's long-term profitability in three ways:

• AI can compare the same property across Airbnb, Vrbo, Booking.com, and direct booking sites, making it easy to book wherever it's cheapest.

• Travelers may start their searches with AI instead of Airbnb, weakening Airbnb's competitive advantage.

• AI could help hosts list and manage properties across multiple platforms, reducing Airbnb's supply of exclusive listings.

Chesky jumped into the replies to push back:

“You presume we could never offer a price-match guarantee.”

A price match guarantee means that Airbnb could offer to match a lower price that a guest finds on the same property. 

Consider this for a second: if Airbnb ever implements a price-match guarantee, and spots that your house is $50 cheaper on your own direct booking website, who pays the difference to match that price?

Airbnb’s not going to take that money out of its own profits. That means you’d match your cheaper direct price, but still have to swallow Airbnb's 15.5% fee on top of it.

To be clear - Chesky didn’t announce an official policy, but public slips like that tell me they’re thinking about it internally at Airbnb. 

#4 - Sponsored Listings

Chesky confirmed Airbnb’s developing Sponsored Listings, built into its AI agent (slated for the first half of 2027). Airbnb hasn’t revealed a timeline or pricing for sponsored listings yet. 

Two months ago, Chesky called sponsored listings “a pretty easy straight shot to $1 billion incremental high-margin revenue.” That revenue would come from hosts and PMs paying for increased visibility on the platform.

#5 - The 15.5% Fee: “Simple” for Hosts, “Foundational” for Wall Street

As of October, nearly all hosts have been moved to the 15.5% host-only fee. Airbnb pitched that change to hosts as a “simplification” of its fee structure. 

But Wall Street’s getting told a different version of the story. On this call, Mertz named the single fee as one of two things propping up Airbnb’s take rate (the other was guest travel insurance). In plain English, that means the host-only fee is helping Airbnb keep a bigger cut of every booking.

And Airbnb’s been telling investors a different story for a while. Back in February, Mertz called the fee a “foundational move” that lets Airbnb be “more dynamic with our pricing tools as well as our fees.”

Basically, hosts were told the fee was about simplicity, but Wall Street’s being told it’s the foundation for future fee changes. I wouldn’t count on 15.5% being the final number.

MARKET INSIGHTS

Mortgage Rate Snapshot

Mortgage rates fell to their lowest level since late September by midweek as tech stocks kept sliding and fuel prices dropped. Rates held there even after a much stronger-than-expected jobs report Friday and a stock market bounce Monday. But a hotter-than-expected inflation report yesterday gave rates their biggest one-day jump in over a month, though they remain well below early October’s highs.

Regulations Update

• Tulsa, Oklahoma voters raised the lodging tax from 5% to 9.9% starting January 1, covering STRs with five or more rooms

• Clark County, Nevada ended its STR license lottery, set a 45-day review and moved to a countywide cap of 1% of housing units

• Collier County, Florida voters raised the bed tax on stays of six months or less from 5% to 6%

• Fresno County, California voters are rejecting a new 12% lodging tax on hotels and STRs in unincorporated areas

• Dunes City, Oregon voters rejected a measure that would have banned new STRs

• Eureka, California voters raised the lodging tax on stays of 30 days or less from 10% to 12%

• Gilroy, California voters are letting the city raise its lodging tax from 9% to as much as 13%, with 11% planned for January

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