Who rents out properties on Airbnb?
Joyce Park stashed this in Tech biz
Mostly it is NOT people who rent out a room in their home in the manner of an actual BnB. Overwhelmingly it seems to be people who are in a position to offer a complete apartment or house. So this isn't "sharing empty bedrooms" as much as it is "subletting the whole property by the day". I'm sort of amazed that there are so many people who are apparently willing to vacate their own home on a moment's notice! Where do they go?
Why does all of this matter? Airbnb portrays their typical renter in a way that seeks to reduce burdensome regulations and taxes: hardworking people who occasionally rent out a room to help make ends meet. But the reality might be much more like "property management companies can undercut hotels because they don't pay the very high taxes meant to be levied on travellers, and they take housing stock out of the system".
Also at least during the period of this study, there was a LOT of churn... which the author interprets as people deciding the cost-benefit of renting on AirBnb was not working out for them. Remember that the sky-high valuation of the company is not just because they are going to steal vacation-house listings from Craiglist... it is based on the premise that there is a gigantic hidden market of renters and rentees who prefer private homes to hotels. Maybe that's the case, but you know... the last big example of the "sharing economy" was that everyone used to buy and sell stuff on Ebay too, then it got to be too much work for too little payoff.
The massive growth of Airbnb has mostly hidden this fact until now.
When they raised their money at a $10 billion valuation they alluded to the need to be more than rentals.
Airbnb CEO Brian Chesky wants to be around for 100 years:
Our culture is the foundation for our company. We may not be remembered for much after we are gone, and if Airbnb is around 100 years from now, surely we won’t be a booking website for homes. We will be far past this in our evolution (not to mention that kids 100 years from now will be asking their grandparents what websites were).
The thing that will endure for 100 years, the way it has for most 100 year companies, is the culture. The culture is what creates the foundation for all future innovation. If you break the culture, you break the machine that creates your products.
His rant about culture has been viewed on LinkedIn more than 250,000 times:
Note that Uber is "sharing economy" but it does seem to work for people who don't want to own cars.
Note also that TaskRabbit is "sharing economy" and it just built a proprietary messaging system:
i have to participate because this is so close to home. :)
i was the very first booking on airbnb. i was an artist, with a small condo in austin, and i had an ad on craigslist that said, "support a starving artist—send her camping!" (i had a texas state parks pass and i would literally go camping with my dog when my place rented out.) the two founders of airbnb, brian and joe, found me on craigslist and asked that i join. after becoming the first airbnb listing, i also became their first booking. and for me, it was the first time i rented out only a portion of my home (my living room futon, in this case). my guest was a student from minnesota. she and i are still friends.
in my case, it was just as cute and folksy as airbnb wants it to sound. but later, i started renting out my condo more like a hotel, all dressed up, without my personal belongings in it, while i lived elsewhere. and i learned, as the article implies, the cost of running a hotel is high. the damages are many, the cleaning is extensive and expensive, you still have to cover the rent and bills, and in the end, it is actually a job—not just a fun little way to make money on the side. it requires a great deal of communication via email and when you add it all up—the time, the money, the stress—you're actually working a pretty high-level job for very little pay. you're running a business. and in many cases, you're losing money. i can see why they lose 30% of their hosts every year. it's all fun and games until you realize it's work!
Thank you for this story, Emily. It DOES sound like a lot of work!
it was definitely more effective as a side-income for a starving artist who was willing to share her space or leave it to go camping. the "folksy tale of regular people renting out their homes to make ends meet" is the most lucrative model in terms of cost-benefit for airbnb hosts because there is no money lost. when not booked, you live in your own hotel; there are never any vacancies.
That's true. But it seems like that use case is actually pretty rare.
indeed. and that phase in life is actually pretty short! hopefully, we aren't in a perpetual state of needing to make ends meet.
I share that hope but it seems like, since 2008, there are more people whose lives have turned toward a perpetual state of need.