Airbnb unveils new category of rentals rated by inspectors

SAN FRANCISCO -- Airbnb is dispatching inspectors to rate thousands of the properties listed on its home-rental service in an effort to reassure travelers they're booking nice places to stay.

The Plus program, unveiled late last month, is aimed at winning over travelers who aren't sure they can trust the current rating system drawn from the opinions posted by past guests. The misleading pictures drawn by Airbnb's rating system have become a big enough problem to spawn a website devoted to horror stories spanning from an overcrowded, dirty "hippy commune" in Pasadena, California, to a Paris vacation ruined in a moldy, bug-infested apartment.

"You realize over time that you do have to take more responsibility for your platform, you have to be hands on, you have to make judgments," Airbnb CEO Brian Chesky said in an interview.

The hands-on touch built into the Plus program comes 10 years after Chesky and his former roommate started Airbnb in a San Francisco apartment in hopes of bringing in more money to pay their own rent.

Airbnb's internal surveys have found nearly three-fourths of the travelers on its service are willing to pay more for inspector-certified properties, allowing homeowners and apartment dwellers to quickly recoup a $149 fee to participate in Plus.

Airbnb co-founder and CEO Brian Chesky speaks about all the new features and programs unveiled during an event Feb. 22 in San Francisco.Eric Risberg ~ Associated Press

Human inspectors will review properties based on a 100-point checklist covering everything from the speed of the Wi-Fi to the comfort of the bedding. Properties that fail still can be part of Airbnb's regular listings; the company also will offer advice on improvements to qualify.

The program initially will cover about 2,000 properties in 13 cities -- Austin, Texas; Barcelona, Spain; Cape Town, South Africa; Chicago; Los Angeles; London; Melbourne, Australia; Milan; Rome; San Francisco; Shanghai; Sydney; and Toronto. That's a small fraction of the roughly 4.5 million properties listed on Airbnb in 81,000 cities worldwide. By the end of the year, Chesky foresees verifying 75,000 homes in 50 cities.

Airbnb is shaking things up at a time its growth has been slowing, a trend the company would like to reverse before it sells its stock in an initial public offering expected within the next two years. Despite its popularity, Airbnb remains unprofitable, with a loss of $75 million on revenue of nearly $2.6 billion last year, according to financial statements reviewed by The Wall Street Journal.

During a presentation in San Francisco, Chesky announced other steps designed to make Airbnb more like a traditional hospitality company instead of an industry renegade that has siphoned business away from major hotels. Frequent travelers will qualify for discounts and other perks. The company also is adding other rental categories, including bed-and-breakfast inns and boutique hotels.

A major hotel industry group slammed Airbnb's expansion as a sham.

Airbnb co-founder and CEO Brian Chesky talks about a new Plus program during an event Feb. 22 in San Francisco.Eric Risberg ~ Associated Press

"Airbnb's latest scheme is just further proof the company is trying to play in the hoteling space while evading industry regulations," said Troy Flanagan of the American Hotel & Lodging Association. "If Airbnb wants to enter the hoteling business, then it needs to be regulated, taxed and subject to the same safety compliances."

Airbnb's success since its inception a decade ago has drawn fire from city officials upset about lost revenue from hotel taxes. It also has stirred protests from long-time renters of homes that are being converted into short-term places to stay instead. Airbnb's critics contend the latter trend has been making it even more difficult to find a place to live in cities such as San Francisco, where housing is already scarce and expensive.

"There are things that we have done that have had negative impacts on cities and we need to confront that," Chesky conceded. But he said he still believes communities have mostly benefited from Airbnb's existence because it has helped people stay in their homes, thanks to the additional money brought in from renting some of the space whenever they want.