Airbnb’s Winter Update Shines a Spotlight on STR Operations—Here’s How It Affects Investors

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Airbnb’s 2023 Winter Release is making waves. Promising an improved, more satisfying guest experience for browsing listings and booking stays, the platform is also poised to shake up every host vying for visibility, bookings, and profitability.  

The release includes several expected enhancements, plus a few surprises. Some features place the guest at center stage, designed to help consumers understand exactly what to expect before they book. Other tools are built to help hosts improve their listings and better manage their back-end businesses. All are billed by Airbnb as a win-win.

According to Airbnb co-founder and CEO Brian Chesky, the platform’s newest features are designed to elevate the guest’s “moment of truth—when you find out if the home you booked meets your expectations.” What’s not to love about more property details, better imagery, transparent pricing, improved reviews readability, and detailed ratings data? Sounds like a guest’s dream.

Specifically, two features are sure to quickly become much-used and appreciated consumer tools: the new Guest Favorites badge and the revamped Reviews and Ratings board. 

For hosts, property managers, and Superhosts, however, these recently unveiled features deliver a mixed bag of promising opportunities and nerve-racking challenges. Who’s positioned to benefit most from the front-end features? Who’s likely to feel the pain of reduced visibility, stalled bookings, and lower profitability? 

The answers are neither universal nor simple. Some hosts will immediately benefit, some hosts will pivot and course-correct, and some hosts will struggle in 2024. 

Ultimately, it will come down to who can assert the operational excellence required to consistently drive booked calendars, glowing reviews, and five-star ratings. 

Guest Favorites Badge: Prestige and Prominence to Influence Visibility and Bookings

The Guest Favorites badge is already upping the ante for hosts. Added to 2 million of the platform’s over 7 million listings, according to Airbnb, these properties have earned near-perfect reviews, with an average rating exceeding 4.9 stars. 

These properties excel in the key guest-rated areas: check-in ease, cleanliness, description accuracy, host communication, location, and guest value. Additionally, they demonstrate top-tier reliability, with an average cancellation rate of 1% or lower—the cream of the crop.

Airbnb says that the Guest Favorites badge will allow guests to “know a great stay when you see one.” The operative word for hosts and property managers is “see.” Listing visibility is crucial.

In search results, the Guest Favorites badge appears prominently in the upper corner of the listing, so it’s impossible to miss. Guest Favorites is also included in filter options, replacing the Superhost filter. Additionally, when a guest continues to the listing page, the Guest Favorites designation is prominently displayed throughout. Visibility issue solved. 

Thanks to the badge’s high-profile placement, consumers will quickly learn to recognize its presence (or lack thereof) and associate the badge with property excellence and desirability. 

To be booked on Airbnb, your property must first be seen. Hosts should expect that the visibility of the new Guest Favorites badge will influence the guest booking journey, from first-page impression rates and daily impressions to click rates and book rates. 

Revamped Reviews and Ratings: Lifting the Operational Curtain 

With over 371 million guest reviews, Airbnb has accumulated an immense dataset of guest and property information. However, accessibility and readability for the common user were lacking. Airbnb’s redesigned Reviews and Ratings boards are built specifically to help guests digest the cumulative experiences of previous guests. 

This overhaul introduces several elements to enhance the booking experience. New sorting options enable guests to filter reviews based on recency or ratings. Reviews also now include comprehensive insights about the reviewer, trip duration, and the makeup of their party (solo traveler, family, pets, etc.).

Perhaps most significant is the introduction of the rating distribution chart. This board visually displays individual ratings on a scale of one to five stars for each reviewed attribute. Simple to understand, the chart provides a clear look under the property’s hood. 

Previously, guests saw only the overall rating for a listing. The detailed breakdown was for hosts’ eyes only. This new graphic spotlights precisely where a property hits the perfection mark and where it falls short. For example:

• Ideal location rating but subpar cleanliness review? That may certainly dissuade a guest from booking. 
• Easy check-in and great host communication, but guest-rated as a bit overpriced? A lackluster value rating might encourage a guest to keep looking for lower-priced options. 

Unpacking Opportunities and Challenges for Hosts, Property Managers, and Superhosts 

Greater transparency and more detailed information will certainly improve the guest booking experience. Simultaneously, the practical effects of Guest Favorites and the revamped Reviews and Ratings boards will generate uncertainty as hosts and property managers navigate the impacts on both their property-level marketing and broader business strategies. 

Here’s a look at how these features impact hosts, property managers, and Superhosts. 

Hosts

Single-property and small-portfolio hosts stand to gain increased visibility and booking opportunities with the introduction of the Guest Favorites badge. Prominently displayed in search results, the badge signals reliability and quality to potential guests, enhancing trust. 

Additionally, Airbnb’s Winter Release includes new pricing tools to help hosts monitor and compare prices. While this will help smaller hosts with market-specific value insights, these pricing tools may also exert pressure on hosts to lower their rates in search of a better value rating, impacting profitability. 

Furthermore, as listings compete actively for the Guest Favorites badge, brand-new properties may find it hard to gain the bookings needed to earn the badge, further intensifying local competition and potential pricing-cutting battles.

Property managers

For professional property managers, the Guest Favorites badge offers an opportunity to highlight the premier listings within their portfolio. Conversely, by placing the Guest Favorites carrot at the end of the stick, the designation will motivate property managers to evaluate their portfolios. Some will choose to invest in improvements at lower-performing properties and tighten up operational requirements and systems; others may shed properties least likely to attain the coveted status. 

While property managers have various options to evaluate and improve their portfolios, they face the persistent challenge of achieving those high-touch, personal guest experiences needed to drive near-perfect reviews and five-star ratings. 

Superhosts

Not surprisingly, nearly two-thirds of early Guest Favorites come from existing Superhost accounts, according to Airbnb. These hosts demonstrate service excellence, productivity, and staying power, and as such, they run top-performing properties. However, the removal of the Superhost search filter, plus the diminished placement of the Superhost title on the listing page, raises questions about its long-term significance. 

As STR professionals, we recognize that Superhost and Guest Favorite designations represent distinct accolades—Guest Favorites are awarded at the property level and Superhosts at the account level. We also acknowledge the different bars and requirements set for each. 

But for the average consumer browsing Airbnb, these labels present an interesting dilemma. Guests may logically prioritize properties marked Guest Favorite, as feedback from previous guests likely holds greater weight than the status of the person behind the property. Airbnb’s active promotion of the new feature may also boost this inclination, further influencing booking decisions in favor of Guest Favorites. 

The Spotlight Is On—Operational Excellence for Every Airbnb Listing 

Arguably, the Guest Favorites badge is neither easy to attain nor simple to keep. Not only are the high-bar measurements intended to signify the best of the best, but the designation itself can be fleeting. 

Whereas Superhost status is evaluated each quarter, Guest Favorites are updated daily based on the latest reviews and ratings. A listing that appeared as a Guest Favorite last week might fall from its perch after a negative review with low guest ratings. 

Thus, one very poor guest review or rating set can generate a potentially damaging effect. Properties with less-than-perfect reviews will face heightened scrutiny from potential guests. And as many students have learned through experience, one bad grade can tank a GPA, but the climb back up takes much longer. 

My Advice: Act Early

Here is my advice:

• Evaluate every listing with an honest, critical eye. 
• Look closely at your guest reviews and each of the six rating areas. 
• Make improvements. 
• Invest in good automation systems and management tools. 
• Sharpen your STR operations and prioritize exceptional service. 

Here are five places to start: 

1. Actively earn and collect positive reviews 

Encourage guests to leave positive reviews and five-star ratings. Ask for detailed feedback on both your property and service. If you think a negative review might be coming, get ahead of it. Communicate and correct as quickly as possible. 

Remember, the Guest Favorites badge is awarded on both high ratings and the number of positive reviews, all earned through action.

2. Prioritize cleanliness and inspect regularly

High cleanliness ratings are crucial. It’s the first rating on the new distribution chart, visible at a glance. 

Invest in professional STR cleaning services and track their performance. Implement a comprehensive checklist and inventory management system so nothing is overlooked during a turnover. Conduct routine inspections to identify maintenance or cleanliness issues and address concerns promptly, as even minor issues can impact guest satisfaction and reviews.

3. Leverage the new listings tab

This set of host tools, announced in the Winter Release, enables hosts to comprehensively showcase and accurately detail your property. According to Airbnb, listings with more details can achieve up to 20% more bookings. 

Your competition will take advantage of these new tools, so you should, too. As further encouragement, listing accuracy appears second on the rating distribution chart. 

4. Price competitively and conscientiously

While useful pricing and comparison tools are available, carefully consider your pricing strategy. Competitive rates may attract guests initially, but be mindful not to underprice your property or services. 

Strive for a balance that offers excellent value without compromising your standards or profitability. Never forget: You’re running a business. 

5. Manage cancellations cautiously

Minimize cancellations and quality-related issues, as these can significantly impact your eligibility for the Guest Favorites badge. Ensure that your listing’s availability is up-to-date and accurate, and if you must cancel a reservation, do so only in exceptional circumstances.

Final Thoughts

Achieving—and maintaining—the highest standards across every aspect of the guest experience is the newest must-run playbook on Airbnb. With greater guest accessibility to reviews and ratings details, consistency in service and quality is crucial for every listing. 

Operational excellence will lead to make-or-break reviews. Whether you’re owner-operated or part of a large portfolio, recognize that meeting guest expectations is an ongoing process. Commit to staying updated with guest feedback, adjusting your hosting strategies accordingly, and committing time and resources to continuous improvement. 

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.