In case you hadn’t already heard, there’s a massive Airbnb revolt in the making.
Over the years, the sharing giant became so popular that hosts struck up their own Facebook groups to compare notes, ideas and even frustrations. With tourism in bloom, the groups reached five, or even six figure heights in readership.
But as covid-19 swept across the land, forcing cancellations en masse, hosts because increasingly frustrated by the response, or lack thereof from Airbnb, and a clear direction for the future emerged.
It’s important to consider first just how wonderful Airbnb has been, for the most part, before taking it down. Overnight, hosts gained a wildly popular search platform with millions of fans, allowing them to turn excess space, or a second home into a bonafide second, or even primary income.
I, for one, have benefited from Airbnb in my travels massively, and can’t imagine a world without it, or at least something similar. The arguments for and against are never ending, and for side reading, I recommend this deeper piece before we lose focus.
Airbnb grew into something no one could ever have fully imagined, even exceeding those corny investment presentation decks of just how big and booming a business could grow, in the best of circumstances.
With founder dreams of becoming liquid billionaires and appeasing wall street IPO hawkers came fees and restrictions which created an unfriendly environment for hosts, and a frustrating level of extra costs for guests.
Just about everyone’s searched for a place on the sharing economy platform and seen $150 a night and thought “great”, only to then see it’s actually more like $300 by the time you add in cleaning fees, taxes, Airbnb’s massive booking fee and other considerations.
When you start to strip out some of those elements, there’s huge room for price drops within the travel accommodation market, because Airbnb eats from both sides. It’s precisely why hosts are planning a revolution in direct booking, or low fee platforms owned and run by hosts.
For travelers, it could be great news.
Take a recent booking I made for Los Angeles, which advertised $261 per night, for a five night stay, where Airbnb claimed a princely $203 booking fee. It’s not until the booking page that a prospective guest sees that $261 per night is actually $378 per night after taxes and fees for a total of $1841.
Hosts enjoy virtually no benefit from that Airbnb booking fee, which in this $203 instance averages out to a price increase of $40 per night alone. Of course, Airbnb takes a percentage off the host as well, which eats into their initial $261 per night charges.
Imagine a world where hosts could start fresh, creating smaller, better platforms without those vanity fees.
In the short term, you don’t even need to imagine. Whereas hotels must protect shareholder value and revenue management for property owners and beyond, sharing economy hosts like those on Airbnb are more interested in simply covering the mortgage. Until travel rebounds, they’ll be more nimble in creating value and compelling deals to get people on property.
In my booking example alone, where Airbnb takes up to 20% from the host, and charges me $203 to make the sale, it could drop the net room rate down to $208 per night ($261 minus Airbnb’s 20% cut), for a total of five nights, and drop the $203 booking charge from the final tally too.
State taxes on this reservation still added $201, and cleaning fee added $130, but you’d be looking at an all in comparable cost of $1371, instead of $1841.That’s a $500 price drop, and it’s precisely why this trend could take off with support from hosts and guests alike.
A major question about “how” here involves visibility, and for most hosts, they’ll never fully leave Airbnb, they’ll just seek outside opportunities wherever possible.
Airbnb provides a large scale, plug and play audience the size of which is hardly matched by anyone. Going it alone would mean fewer eyeballs than before, but for some who’ve been in the business long enough to earn repeat guests, a network to build out from already exists.
Leaving the listing on Airbnb keeps a flow of visitors coming in, but branching into direct booking websites and new channels will allow hosts greater control of their inventory, and better pricing for guests.
Lodgify is one of the many tech based solutions looking to empower hosts to take control of pricing and opportunities across platforms. The online software enables guests to set pricing across the major current players like Airbnb and Booking.com, but helps create a robust e-commerce platform for direct booking, so that hosts can offer better pricing and perks for direct bookers.
Ultimately, brewing competition is great news for hosts and guests alike. Lower fees often translate to lower prices, and with opportunities to maintain visibility, hosts don’t miss out on key eyeballs. They’ll just look to keep them in their own booking channels after that first purchase…
Every time I’ve used AirBNB, (5-6 times, all in different countries), it has been just disgusting.
Dirty house, personal junk all over the place.
It was like sleeping on a friends couch, it was just… creepy.
Each time I said, well, every says this thing is great.
So, I will try again.
Then a place with no hot water.
And on and on.
So, yeah, I book hotels now, or serviced apartments.
I wouldn’t touch AirBNB with a 10′ pole, it’s just… gross.
I looked yesterday, for a long term rental in Portugal.
AirBNB – I even checked it.
Yup, still the same.
I think mostly people who like to *talk* about travel use it still.
They like to tell friends and social media ‘omg, I got an AirBNB… I’m sooo authentic’
I think people who travel frequently, realized it was a silly gimmick.
For people who travel, want a CLEAN place, with hot water or wifi. Yeah, we aren’t using AirBNB anymore. It seems like an internet bubble/fad thing.
Hmmm… Airbnb is driven by ratings, which suggests those listings would fall out of favor. That said, Airbnb itself has never policied listings so there could easily be artificial/fake listings. We’ve stayed at 60+ listings since 2011 and have never had a “bad” experience. Some were just an “extra room” in which case cleanliness can be lower than my standards, but I wouldn’t say I’ve had a “gross” experience that would make me want to clean the place myself. 90% of the time cleanliness has been good. But cleanliness and “gross” is subjective. It’s not a hotel and never will be to those standards (yet hotels can also be pretty gross sometimes). My biggest gripe in the past few years has been a massive increase in rates both from hosts and AirBnB fees. It’s getting to the point where it is still advantageous for families, but just barely. AirBnBs in Sedona, AZ were $300+/night…. Yes it’s a marketplace and supply/demand, blah blah blah, but my gosh. I’m hoping this COVID event rebalances the marketplace and puts many of those Airbnb based businesses that were truly disrupting local rental markets and ignoring local rules out of business – there will still be enough to support travel demand (knowing that there will likely be fewer travelers as well, and perhaps fewer willing to stay in non-traditional lodging).
I like the idea of direct booking and it save money for both sides, but who provides the customer service in case things go wrong? Hosts do not exist? sometimes they just cancel on the day of arrival etc? And what happens someone destroys someone’s apartment? It would be hard for an individual host to fight and get the value because deposit is usually like 200-300 usd but furniture can cost a lot more.
Some are banding together to avoid exorbitant fees charged by food delivery services. 30% commission from restaurant, and consumer still pays.
This is in Singapore though, do not know how it can scale in somewhere like the US
I don’t see these new consortiums as solving the problems with Airbnb and similar platforms for most parties. Sure, it can be great for the property owner but doesn’t really do a thing for the customer or the city/area. Realistically the customer is still often left with indifferent-to-hostile customer service in the event of the host not offering what was promised and the city or area still loses out because regular people are still being driven out of their area by an increasingly semi-regulated (at best) industry indifferent to anything but making a quick buck. Ironically I was a big fan of the model when it hadn’t yet grown into a giant monster. In its’ current incarnation I believe the industry deserves to be demolished. I think that the model just might be saved through regulation with real teeth, such as requiring that no more than say 5% of living units could be rented out, and that there could be no more than 2 units held by any common person or group to keep a small number of companies from cornering any specific market. There should also be a viable way to get relief from the company in the event of substantial problems. Finally, make these rules applicable to any market that the company does business with in any way, including affiliates, common ownership, subsidiaries, etc. and if the company refuses, they are banned from doing business in your country.
The best days of Airbnb have passed. The cheap, friendly and fun stuff has peaked. The good news is that the old school traditional small hotels have found that by holding their charges down they are competitive again. Cheaper to stay in 2star hotel in central Amsterdam, than a comparable Airbnb. Business as usual.
I have been hosting and traveling with Airbnb since 2012. I have stayed in over 70 places on all continents. I had 2 bad experiences but all the others were either good or excellent. I had 3 places cancel on me at the last minute which was very frustrating but managed to get ok alternatives for 2 of them. The experience in Mumbai was horrible. My hosting experience has been good also. You mention Airbnb charges up to 20% to hosts. Thy always charged me just the same 3%. They charge other hosts more than that? But as a traveller they charge me about 13%. I am not saying that Airbnb is perfect by any means. When you have a problem they can take too much time to resolve it.
My husband and I have stayed in around 50+ airBnBs since 2015 and, until recently, were happy with the service. Places were clean and as-advertised 90% of the time. Prices great. I was SHOCKED at the exorbitant fees the last 3 times I tried to book. It was cheaper to stay in a Marriott or a local boutique-hotel, so we did. I think Airbnb has lost my business for good, and I am sad, as I enjoyed the experience of living in a house or apartment–even for a moment– in whatever city/state/country we were staying. A note to Gordon Gekko and Milton Friedman: Greed is Not Good.
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