I really loved the way Brian described it as - this is how it used to be, go to a place and stay with a local. I don't like the formality, isolation, or artificiality of hotels so Airbnb has been a wonderful opportunity.
Recently, though, I've found more and more properties managed by one person. It's hard to be sure I'm staying with a local making some cash off their spare room, rather than someone "farming" a bunch of cheap properties. I wondered if Airbnb were permitting or encouraging this; the article suggests it is the latter.
For me, this ruins the whole point of Airbnb. Long-term it will devalue the experience by turning it into a substandard, impersonal distributed hotel. I really hope they change direction. If not, I expect a new startup to come along providing "what Airbnb was supposed to be."
What I find most puzzling is how such great founders could lose sight of the wonderful vision they had.
The next step was then to have companies take over this missing segment. Landlords can now give their property to a AirBnB management company that makes sure it always get reposted, the key given to the right person and so on. Profit is still higher than what the landlord would make through normal renting out.
I worked for a real estate startup and we had A LOT of overseas investors solely wanting to buy properties for renting them out on AirBnB.
In the past I also ended up in one of these managed places by accident once. It was a big house with a bunch of walls put in between rooms to rent out each little part of the house as a separate AirBnB room. The avatar and description made it look like it's the house of a young woman trying to make an extra buck.
I don't like it either and think it's a little bit sad that things progress this way, but it was unavoidable. I'm crossing my fingers that this won't harm the normal renting and guesthouse/hostel market too much.
AirBnB shouldn't be a machine too make rich people even richer and the apartment search for the normal guy harder and harder.
First, it is at least somewhat avoidable. Banning management companies would be one solution. Only allowing users to post their homes for a fraction of a rolling 12 month period would be another. Only allowing users to have 1 or 2 simultaneous postings with different street addresses would be another. These are the things Airbnb should do and doing so honestly probably would have prevented them from getting totally screwed by NYS/NYC legislatures, which leads to my second point.
Of course it harms the normal rental market. What else could it possibly do besides that? Not only that, but the backlash against the system harms those of us who do wish to actually legitimately rent out our homes while we're not in them. Airbnb should've been more proactive about this from the get go, but I don't think it's necessarily too late. With this news, though, it seems they don't even think this is a problem despite getting them outlawed in the largest city in the US.
It's really a bummer, but it's not unavoidable and not unfixable.
In many cases by circumventing hotel regulation. We seem to like flouting the law, provided it happens in Silicon Valley and not Wall Street.
AirBnB is no longer my go-to; it's just another place I check along with travel and hotel aggregator sites. But at least with hotels I know what I'm getting.
Wow, so people who don't even live in the country are buying housing to rent to other people that don'e live in the country or city.
Meanwhile people who live, work and pay taxes increasingly can't afford rents in their hometowns.
In general, look and see who is making the money off of a service. They are the ones who will be listened to -- not because of any evil on the part of the company, but simply because they have a greater incentive to scream louder and coordinate.
So they naturally gravitate toward transaction types which create the greatest volume. Which tend toward the repeatable, industrialized, consistent, etc. In other words, the opposite of selling handmade goods, renting a spare bedroom by an owner who is only around between 3pm-4pm, or doing a one-off attic decluttering.
I imagine, right now, there are many wealthy people, companies/REIT's buying up residential properties; and using Airbnb to making a healthy ROI. If I had the means, I would probally join the money making hootenanny.
It kinda bothers me because essentilly all these low interest loans are going to wealthy people, with assets. In my warped world, I still think homes should be available to the middle class, and even the working poor. I just heard today it's practically impossible to get a loan if you're self-employed. Sorry, if I sound bitter--I am. I really wish they would raise interest rates. I only see the wealthy benefitting from this historically low interest rates. And to be honest, I don't want to have a bunch of random Airbnb people as temporary neighbors. Sorry about the rant. Oh yea, I just got a cc offer for 29 percent today--yea! I'm just in a bad mood today.
Even normal folks making thousands of Euro from their flat, making housing unreasonably expensive as speculators snap up any reasonably priced real estate.
You are searching for a certain feel or experience, which is fine. Personally, I'm more interested in just saving money, a savings which arises from the taking advantage of previously un-rented space and the part-time labor of folks who aren't able to work full time for hotels. Both of us can co-exist on AirBnB. Just read the reviews, and perhaps petition for AirBnB to include a formal metric (or prompt reviewers more for their opinion on the personal feel, etc.).
A full-time AirBnB landlord doesn't ruin the whole point or lose sign of any wonderful vision. I want a "substandard, impersonal distributed hotel", because I don't want to spend on money things I don't care about.
That's an exaggeration but not much of one.
By way of analogy, I know some tech events that the organizers keep deliberately small to maintain the feel of the event. But it's a lot easier to do that when you don't have investors looking for hypergrowth.
Until that one time when you encounter a problem with an Airbnber, Airbnb customer service try to help, give you hope, then completely pull the rug out from under you. Terrible experience overall.
If there are any Airbnb employees on here who care about customer service and could help, please drop me a line?
The big problem in a lot of places is that these properties are far from cheap.
I live in Stuttgart, one of the most expensive real estate markets in Germany (and maybe Europe?). House/apartment prices continue to climb past the level of absurdity for most residents, and when new "cheap" properties, for the low price of 250-350,000 Eur, hit the market, they're often recently snapped up by wealthy property speculators in the city who turn them around and run them as Airbnb properties at 150-300 Eur/night. It prices folks with middle class incomes right out of the city.
It's to the point that the state is planning laws that would prohibit short-term leasing schemes for whole flats if the flat isn't zoned as commercial property. People will still be able to rent out a room in their flat, but it will have to be a place where they live.
I personally love the fact there is no money exchanged on there and that people participate for the conversations/experiences.
You're complaining about how things scale. If there's an opportunity to make money by doing more of something, people will pile in and do more of it. That's how markets work.
Thanks to them it will be harder for you to rent or buy a place to live. At the same time they are putting registered businesses out of business thanks to the marketing of "sharing" economy, which is a huge sham (see Uber).
I hope that countries protect the regular Joe's living in cities and demand payment for professional renting services, just like any regular apartement / hotel.
Thanks for ruining it for everybody else, so you can make a boatload of money.
I think it's a lot of naiveté about the nature of financial markets. If you find something that is truly better, the "no arbitrage" principle pops up. First, it's small players renting out a small number of apartments, but once they prove that the business model works, big money in the form of hundred-billion dollar REITs step in and blow everyone away with scale. These REITs already existed; but they were primarily focused on commercial and multi-tenant buildings where hiring a professional management company scales well. Guess what? Airbnb made it scale well to individual properties.
I'll put it this way -- I have significant holdings in various REITs because of Airbnb. At a minimum, they will drive property prices in an area up, which is the entire point of an REIT (find an undervalued area, invest like hell and bring property values in the whole area up). It's just that they can now have very low management fees because of all the ROI they're seeing from Airbnb rentals. It's a great investment if you can find the right local markets. Even locally where I live, there are at least 3 Chinese REITs snapping up dilapidated houses on the cheap, renovating them, and putting them on Airbnb.
A big problem with wealth is that you can't just let it sit in a bank account. You're losing literally millions of dollars a day that way, so you have to find some way to invest that money into assets with growth. Real estate (I'm not talking mortgage-backed securities, but literally owning a large, diversified portfolio of land) has traditionally been considered "safe" -- you're unlikely to totally lose your ass on the property value alone, and any rental income you get covers upkeep of the property and offsets the interest rates on the loans (REITs are in the game for capital asset growth; not operational income).
Airbnb is, in my opinion, a real-estate investment site first and foremost. It provides management (until recently through a network of local management companies, though this article shows airbnb getting into the game themselves) and rental services to investors.
I don't see any way to allow the original vision of "what Airbnb was supposed to be" without also allowing the real estate investment crowd in. The only way would be extensive screening of rentals to ensure they're actually what they say they are -- and this would need to be provided by Airbnb because property managers are really good at deceiving short-term renters. And that would totally break their business model.
IMO it's yet another case of a tech Animal Farm -- we strip an industry down to its core components in an attempt to simplify, but once you try to scale it up you see why the original iteration of the industry had the rules it did: often to protect unsophisticated customers from slimy professionals who cut corners to increase their margins. In some cases, local regulation / corruption was a real issue (see Uber) but in others I'm not sure there really was much of a problem to begin with (Airbnb in most places outside major cities with artificially restricted hotel capacity).
One group I haven't seen mentioned yet are the various startups aiming to offer property management services to AirBnB customers - yet another example of why building on someone else's ecosystem is always a potential gamble.
(Honest questions for thought. To the extent they're a bit leading, it's to make them interesting enough to think about.)
Is there some other highly-entrenched market that could be cracked this way that nobody's considered?
The "gig economy" as exemplified by Uber and AirBNB primarily seems to be a way for businesses to circumvent the regulations on existing markets, giving them a competitive advantage over 'traditional' players.
Uber wouldn't be investing in self-driving cars if they thought they were going to have to buy taxi medallions for them and offer fixed fare prices, the way legitimate taxis do. If there were a way for AirBNB to just run hotels without having to comply with the usual hospitality laws, they'd be doing that instead of crowdsourcing.
There is a reason we gave had hotels for 100 years. Kinda nice to get consistent quality with no big process to find a room.
Uber would have never gotten off the ground if it had to finance ownership of its own cars. AirBnB wouldn't be profitable (Or, more specifically, would be in an extremely risky line of business) if it had to own all the property it rents. They both capitalize on inefficiencies in driver/host use of their vehicles/homes, essentially borrowing them at a discount, compared to owning the asset + paying their own employee to drive/host.
I can already get consistent quality with no big process to find a room. I go to any hotel's website, and book a reservation.
Said hotel will also let me check in at 3 AM, will happily extend my stay, and will assist me with any travel emergencies.
That claim is even more absurd in the case of Airbnb, which is a pure marketplace. They are no more "freeloading" than your local newspaper is/was freeloading on the posters of classified ads for renting.
The point of the gig economy is to circumvent regulations both on existing industries and the hiring of labor that reduce the returns to capital (in the latter case by providing greater security and returns to labor).
Now, allowing the working class to think that they are being made able to better leverage their meager capital is part of the leading wedge and marketing image of many gig economy ventures, but even there the trend is to transition away from use of working-class-owned capital to capitalist-class-owned capital. Which is really the only way ventures can scale, because of the working class had the kind of capital to support scaling ventures up, then we wouldn't call them "working class".
You see this transition to capitalist-owned-capital in the trend discussed with AirBnB increasingly listing big and multiple property owners, not extra rooms in some working-class person's home, in Uber moving to offer vehicle leases to drivers, to move beyond driver-owned vehicles, etc.
Say they own an apartment complex and allow people to either purchase units or lease long-term, with the option to rent out their place to short-term AirBnb users when they aren't there.
AirBnb and its users would benefit from having on-site staff as well as standardized units, reducing unpredictability for everyone involved and making it a hotel-like experience, while still profiting off of capital owned by the working class.
What I'm imagining is probably closest to a time-share property but re-branded to lose the stigma and with slightly more standardized units.
I just like the idea of something that allows remote workers to easily move between multiple cities, for varying intervals of time, with similar, predictable accommodations.
No idea if there's actually a viable market or if it's even in the realm of what AirBnb are trying to do.
As someone who has moved an aweful lot, I always imagined such an option should exist and was always frustrated to know it doesn't.
Barring a large corporation offering a seamless option, I'd like to see hostels tackle this problem by being built to offer several rentals (rooms) per location, perhaps with a 2-3 month limit. In a large enough city, one could just do a search for these types of rooms via Hostelbookers et al. At least such an offering would take care of the "I just moved here and want to figure out the lay of the land first" problem.
Can you elaborate?
If a hotel has bedbugs or you find something nasty, it makes the morning news and headlines. There are usually regulations that kick in, procedures that must be followed. The hotel goes out of their way to compensate you, yes probably even prevent you from making a big deal about it by offering you a free booking or two. If something happens on an airbnb, they get a bad review.
Airbnb is worth it if it's significantly cheaper than a hotel, but once the prices became similar imo totally not worth the hassle. With a hotel you know what you are getting upfront.
For business trips or similar, yeah, hotels are perfect.
I brought up the issue when I was checking in and they claimed they'd never had bedbugs which is clearly a lie.
Airbnb actually has more incentive to fix the issue for you because you'll stay with them again (same as some large hotel chains) whereas in this case I was never coming back to Newark Airport Hotel so they didn't care
Details can be worked out by someone other than me.
Not bed bugs, but mold, same concept - http://wncn.com/2016/08/25/raleigh-hotel-has-black-mold-prob...
Google news for "hotel bed bugs" yielded a plethora of results.
I stayed at a best western in the Philippines and it was pristine. I also stayed at local places and quality varied, because who was going to know/care?
The lesson here is that big, reputable places have incentives, whether traditional (best western) or alternative (airBnB).
That said, this is the nice thing about Airbnb. The reviews would have warned me.
Because many hotel chains don't even do that - they simply franchise. The end goal for many of these things is to become a directed-fund: investors bring money (to buy property), the company adds their secret sauce and takes a significant margin.
If I as a person own a house, and I want to rent to out to other people when I am away, how do I do this in an easy way?
This is free supply that SHOULD be on the market, but wasn't until airbnb came along. Sure there was craigslist, ect, but airbnb really made the process much easier.
There's no particular reason that wouldn't be successful, but it makes about as much sense as them branching out into the ketchup-making business.
Being a Marriott hotel means you have access to Marriott customers on Marriott.com and other sites through their systems. That's not much different than AirBnB.
They may as well take that money, and invest it into <Insert non-core competency of AirBnB>. Or, alternatively, partner with an existing hotel franchise.
Managing other people's properties, on the other hand, is a natural extension of their core business.
What'll someone's happen is that the building and management don't change, yet the hotel brand will change.
Well, the end game could also be apartment/house/hotel market, rolled into one.
IE, the unification of the short and long term housing markets. With each person having an opportunity to monetize ancillary tasks - cleaners, arranger, cooks and so-forth all could be available on the market.
If hotels have some amount of inefficiencies/fraction in their markets, apartment rent and home buying has much, much more. All for somewhat logical reasons but sharing-economy is pretty much a stampede to price everything at market value, externalities be damned.
If might be a bit inconvenient to have to decide on a weekly or daily basis whether you could afford your current digs but hypothetically you could take comfort in getting the best deal possible, I suppose unless you wind-up the sidewalk, a location of limited comfort.
Now, this isn't to say an investment is safe because it's accountable and transparent -- but the mechanics that govern the organization is now something that can be put on autopilot without human intervention.
The only thing that reduces risk is proper due diligence. Relying on the SEC would be a mistake and I expect this market to be filled by some kind of prediction market (see augur).
Troll somewhere else bro. You add nothing to the discussion. Write a fortune cookie or something.
This is yet another area where Airbnb seems to be skirting close to breaking the rules.
But many states are cracking down on what "short-term rentals" mean and who falls into this transient tax category. Here in CA, the DRE recently released the following:
>>>First, while the Code refers to “transient occupancies”, the language that is most often used with
reference to such occupancies refers to “short term rentals” and “vacation rentals”. As mentioned
above, the maximum time period of such rentals cannot exceed 30 days.
>>>Second, the exemption refers to those who handle transient occupancies as agents on behalf of
“another or others”. It does not refer to what is commonly described as VRBOs or vacation rentals by
And anytime you get local departments of real estate involved, they'll go down kicking and screaming and make it as difficult as possible for Airbnb, VRBO, etc.
Companies like the National Multifamily Housing Council, National Apartment Association, National Association of Regional Property Managers, and various Realtor affiliated groups spend tens of millions of dollars each year lobbying to pass legislation that makes it incredibly difficult for non-property-owners and non-agents/brokers to do anything involving managing other people's property in many states.
Legitimately curious to know how Airbnb plans to get around this in the US (and several other countries with similar laws).
From the article, they're starting this as a pilot in Japan (and not sure about the laws there), so maybe the short-term only involves more loosely regulated housing markets.
I didn't see the part about piloting this in Japan, partly because I'm on my phone and the linked article has a terrible layout on my browser. I don't know what laws govern this sort of thing there, so my comment about skirting the law doesn't necessarily apply there.
Sadly, some Japanese unwelcome to foregin traveler. My friend says everyday "Oh, lots of Chinese!" at Akihabara. However, he never complains to white and blacks. It's a real Japanese attitude(not my own).
If more Chinese come to Japan with Airbnb, Japanese will hold a serious discussions on Airbnb.
Are these all "illegal hotels"?
People have been renting out spare bedrooms in their house for centuries.
They will go after the guy running a forgery-on-demand service, though.
Craigslist is a general classified service. It's at about five arms lengths' away from property-related transactions. AirBnB, on the other hand, is very intimately involved in these transactions. Courts aren't stupid, and they will interpret the two situations quite differently.
I can't possibly be breaking the law if all I'm doing is introducing people to each other.
Since courts aren't stupid, I don't think it would pass muster either. Even if it did have a karma system, and a sweet app.
Sounds like a legal fix is in order to get that down to a $600 threshold as applies to traditional 1099 reporting, but I'll assume a fix won't be made as the threshold was most likely set high as a compromise to enable such reporting to occur.
Luckily, AirBnB will collect occupancy taxes and can remit them to taxing authorities directly.
Curious that a technology company can't manage something that low-tech property management companies can handle without issue. This type of tax reporting is very easily automated, so AirBnB doesn't really have any excuse not to do it properly.
VRBO/Homeaway does collect tax for you.
So I pay the tax out of my own airbnb earnings (it is regulated here so I have a license).
Which sucks because hotels can add the tax, after their daily rate. I just earn 10% less.
It could be very different in other countries or across borders though.
The result is that you don't have to worry about your homeowners insurance covering damage as its already covered.
Usually a hotel has many guests at a time, and multiple employees.
Airbnb operators are usually run by the host, and typically only have a single spare room.
There's going to be a watershed moment where a "host" offering 10-20+ properties is going to get the hammer of the law on them for running an unlicensed hotel and quite probably for some form of tax fraud as well (hotels often have many extra taxes.)
I still prefer staying at airbnb, even when its more of a company than an individual. Its still much better than a typical hotel.
This is fascinating. I wonder how one becomes involved...