Airbnb's Latest Milestone: 1 Million Homes, and Hardly Anyone Noticed
Geege Schuman stashed this in Airbnb
How is it that Uber can't catch a break, while Airbnb can quietly announce a major, if largely psychological, milestone? It might be as simple as culture. In a column for Harvard Business Review last month, Arun Sundararajan, a professor at New York University's Stern School of Business and expert on the sharing economy, observed that Airbnb has invested in "creating community and a feeling of partnership" whereas Uber "unfailingly appears to place distance between the platform and its providers." Put another way: Airbnb tries to come to cities as a friendly new neighbor, Uber more often than not as a conquerer.
It will be interesting to see if, in the long run, Uber's approach does not hurt them.
Same crowd, different company? The heat is on Uber so they focus on their other over valued gem?
Airbnb shares, Uber zero-sums.
Geege, well said.
Airbnb listers seem to be paid better than Uber drivers.
And Airbnb listers make money when they're not there, whereas Uber drivers have to work for their money.
True enough. But you don't hear squat about VRBO/HomeAway who has been successfully in the vacation rental space for years. (And is known and used by everyone outside of Silicon Valley.)
Is Airbnb competitive with them or complementary to them?
I'm pretty sure it's the same thing. (Except for couch sharing which I don't think AirBnB does much of anymore, right?) We use VRBO for almost all of our business travel including our annual employee gathering in Hawaii. We took a peek at AirBnB's options for this year's event but there wasn't much to choose from compared to VRBO.
PS. Our team had to figure out where they were staying in Survivor/Amazing Race style.You can read about it here:
It was lots of fun!
VRBO and HomeAway seem more focused on renting entire single-family dwellings. They're a great deal if traveling with a family or group of friends. Airbnb does this too, but their focus seems more on renting a room within a dwelling. Often, there are other rooms for rent, and the owner is on-site in a room of his/her own.
My experience with VRBO/HomeAway is that you only interact with the owner when checking in and checking out. Many Airbnb hosts on the other hand actually do it to meet new and interesting people coming to town as much as for the money. They are often around during your stay, and true to traditional bnbs, most prepare breakfast at least one morning during your stay.
While they are all competitors, I would consider VRBO & HomeAway more directly competitive than either is with Airbnb.
Airbnb has received more bad press than VRBO & HomeAway due to both its impact on rental markets and on Hotels. Since Airbnb caters to individuals/couples which would previously have had to rent a hotel room, that industry has attacked Airbnb (especially in NYC), but has not targeted VRBO or HomeAway to my knowledge. Whether true or not, Airbnb is perceived to have a much larger impact on local rental markets as well. HomeAway and VRBO are perceived as properties which were not on the market (vacant vacation property when an owner is at their primary residence and vacant primary residences when an owner is vacationing) and have been added to the market. Airbnb is perceived as rooms which were on the market for full-time leases / rentals being removed, marked up in price, and now only occupied for a handful of days a month.
Christopher, thank you for that distinction.
And Beth, thanks for your writeups. The second link is missing the last L:
It's interesting to think of the impact Airbnb has had on rental markets and hotels.
I would have thought it would make the markets more liquid, but it sounds like some members of those industries genuinely dislike what Airbnb is offering.
I don't have too much pity for the hotel market. In NYC for instance, it is hard to find a hotel room under $300 a night. So when you could suddenly stay for say $100 or less in a neighborhood you want to visit, this is a no-brainer. I would say that it has made the industry more liquid. I don't know what a hotel's margins are or occupancy rates in NYC, so I don't know if lower prices are sustainable, but I suspect that hotels could lower prices to compete. It's certainly a more efficient and less wasteful market, and hotels are still necessary for high capacity draws such as conferences and sporting events.
Airbnb has certainly been a factor in the rising rental prices in San Francisco. Many leased units have come off the market and owners can often earn what they would have made in a month in only a couple of weekends. It's reasonable to say that this is a more liquid market, but housing/rental prices are a much more complex issue (too complex to suss out here). We're dealing with a limited resource, and there are reasonable arguments that unconstrained capitalism and liquid markets are not ideal and must be regulated when resources are limited.
Personally, I'm a big fan of Airbnb and try to use it when traveling. But I'm not blind to the impact in a city such as San Francisco which is at capacity (no vacant housing stock). It's great when someone rents that spare bedroom they've always kept vacant in the past, but it's a problem when 10% (made this % up) of the leased apartments turn into vacation rentals. I don't have a good solution or regulatory plan to reconcile the two, but I certainly don't think banning Airbnb is the proper solution.
I see your point. Not sure what a proper solution would be.
And yeah, it does seem unfair when rent controlled apartments are put on Airbnb for profit.
My beef with Airbnb was in it's early years when it was encouraging RENTERS to sublet their apartment for a week or two here and there to make money. Most leases do not allow sublets because long term tenants are pre-screened and there is a security risk of having anyone have keys to your house/apt. I have had tenants in the past and I would be very upset if I found out they had rented out the units on a weekly basis to joe schmo. At that time Airbnb was similar to Uber in terms of flaunting the laws.
Today however Airbnb has morphed into being the same as VRBO/HomeAway. The hotel industry has taken aim at the entire vacation rental industry not just Airbnb. They do so on a local basis by encouraging communities to enact laws against short term vacation rentals without special permits. The permits are then very difficult to attain or only available in certain locations. Some home owners take a risk and rent without a valid vacation rental license. (I live in Hawaii so of course this is a BIG issue.)
VRBO/HomeAway take away from the hotel industry as much as Airbnb. (Probably way more than Airbnb since I think they do significantly more business than them and have been doing so for years.) As mentioned, my company has used VRBO for years in place of hotel rooms when our employees travel. (My favorite was a lovely condo in Washington DC that we stayed 7 or so years ago. It was the former home of one of the supreme court justices.) We like having the opportunity to spend time together in a condo or house and cook meals together rather than be in hotel rooms. Prior to the vacation rental market really opening up online, we would have stayed in hotels.
The B&B market has been nicely served by bedandbreakfast.com for even more years. We used to give gift certificates to them for holiday gifts back in...errr....the late 1990s?
Recently Airbnb has tried to take on this new pivot of acting like a hotel. They are training home owners on how to be hotelier-type owners and concierges. Personally I think this is a mistake since the folks who like to stay in vacation rentals rather than hotels do so because they DON'T want the hotel experience. There as an interesting write up on it in Fast Company or Inc. The thing that strikes you when you read the article is the exorbitant amount of money that the young CEO of Airbnb has at his disposal. It's not really like living in the real business word when you can spend millions and millions on various pivots. That's Silicon Valley for you, eh?
Yeah, the more Airbnb grows, the less they'll be able to encourage that illegal subletting activity, and the more like the incumbents they'll become.
Fascinating that they could insert themselves into the industry, only to become like the industry.