Pivoting a company: from Luckey to Airbnb Co-Hosting

The story behind


Yesterday, on October 17, 2024, Airbnb announced the launch of its new Co-Host Network. Hosts can now find someone on the platform to manage their place on their behalf. This can include cleaning, check-in, guest management, pricing—everything related to managing a home on Airbnb.


This announcement concerns the international deployment of the service along with some redesign, but the service has actually been available since 2021 in France and Spain. Before that, it was something else: Luckey, which was acquired by Airbnb in December 2018.


I joined Luckey in January 2017, prior to the acquisition. At that time, and for another two years, we provided homeowners with an all-inclusive short-term rental management service on Airbnb and other platforms. When Airbnb bought Luckey in December 2018, we didn’t know what we were about to become, and we continued for three years with the same model before we decided to pivot.


That’s the story I’m going to tell now.


The old and new business models


Old Model


Luckey provided a comprehensive management service to hosts (meaning that hosts had nothing to do except collect their revenue) based on two pillars:


City managers were like “franchisees” benefiting from the tools and the brand. 50% of the revenue went to them, 50% to us.


New Model


Airbnb Co-Hosting provides a marketplace where hosts can find someone (an individual or a company) to manage their place. Airbnb does not directly manage anything for the hosts but provides some tools to assist the co-hosts on the platform.


What was going wrong?


In theory, the old model was promising: city managers could easily launch a business with our support, benefit from leads and customers immediately without investing in advertising, and earn money from day one. This actually convinced many of them to join us. For us, it was an opportunity to scale the company rapidly because we didn’t have to inject investments to launch a new city; we just had to find a partner there.


In practice, though, our business model struggled to scale. Despite Airbnb's significant investment in advertising, acquisition was like a leaky bucket. The churn rate was almost as high as the acquisition rate, and we couldn’t scale beyond 3,000 hosts.


The reasons were multiple, but here are a few hints:



In short, the relationship was slightly unbalanced: city managers were offering more than they received, and cracks quickly appeared.


All of this led to the service quality dropping below 4.4 stars during certain periods, and we couldn’t exceed 3,000 customers despite considerable marketing efforts. Acquisition didn’t compensate for the churn.


How did we decide to pivot?


In spring 2021, leadership gathered, and we decided to test a new model. We didn’t know exactly what at the moment, but we knew we had to redistribute responsibilities to the city managers (along with a bigger commission share).


We had two main options:



We decided to test the first option.


Virtually, this meant we would become a marketplace of independent property managers since we weren’t offering anything to hosts except selecting people for them. To city managers, we’d become lead providers. This was a natural choice: running a marketplace is in Airbnb’s DNA.


Decisions:



How did we transition?


Test phase


We tested the new model with four partners during summer 2021. They operated in very different markets (a big city, a coastal city, and a rural area) with very different portfolios (3 properties, 10 properties, 30 properties, 80 properties). The only thing they had in common was their high motivation and quality. 


This was an opportunity for us to determine:


The test was a success. We learned many things:


Transition phase


In September 2021, we were ready to migrate all partners to the new model. This needed to be done smoothly. Here’s how we decided to proceed:


The partners who participated in the test were also available by phone to provide feedback and advice to other city managers who called them. We didn’t give any guidelines; we didn’t want other partners to think they were under our control. They were satisfied, so we knew their advice would be genuine. This helped significantly, and I’m very thankful for it.


The waves of migration were well-structured, and we didn’t relinquish all responsibilities at once. These were the steps:


By February 2022, the migration was complete.


What were the results? 


In a few words:


What happened after that?



Closing thoughts


It’s interesting how this was presented more of an operational change than a full-blown vision pivot- which it was in reality. As mentioned in “​​How Did We Decide to Pivot?”, we could have chosen to keep some responsibilities internally at that time. Even though top management didn’t really have a vision for the future, we made the right choice.


I’m very proud of the work we did and proud to have led it. I’m thankful to all the partners and employees who accompanied us. The Co-Host Network wouldn’t be what it is today without them. ■