ZEITGUIDE TO AIRBNB
In a blog post this week titled #weaccept Airbnb promised to work with its hosts to supply short-term housing for 100,000 refugees around the world in the next five years—an attainable goal for a company with 2 million property listings in 191 countries.
Originally a website in 2009 that helped people rent out inflatable mattresses in their living-rooms during conferences, today AirBed and Breakfast (known as Airbnb today) has been used by more than 80 million people since its inception to connect with a host who will rent you a place to crash. From communal apartments to entire houses available, there is plenty for guests to choose from.
The platform earns revenues by charging hosts a 3% fee and guests 6% to 12%. Last year, its revenues increased more than 80%.
Not only do 58% of millennials love it, business travellers who usually stay four days at a hotel are now booking six nights through Airbnb and account for 10% of all its bookings.
The company is now valued at $30 billion by private investors and many expect a stock IPO this year. Hotels are trying to catch up to this major shift in travelers’ desires: In its experimental Charlotte City Center hotel, for example, Marriott placed a focus on communal spaces, local products and on-demand services such as Netflix—features many Airbnb hosts already provide.
But Airbnb’s biggest challenge comes from housing regulators and cities upset about its impact on rents and vacancy rates. One study found it reduced rentable units in the housing available for rent in New York City by 10%.
As ZEITGUIDE friend and author of “The Airbnb Story,” which will be released next week, Leigh Gallagher told us, “Airbnb’s fundamental business goes against the law in many places where it operates. Fighting these battles has taken up a tremendous amount of time and resources over the years.” Recent (and ongoing) battles have been in Washington D.C., Singapore, Oakland, San Francisco and New York City.
Just last year, New York State legislators updated a 2010 law that prohibited anyone from listing an entire apartment as a short-term rental, which seems likely to cut into Airbnb’s largest market, New York City. Already, some property managers have been hit with $1000 fines.
Airbnb meanwhile is finding other ways to grow. It’s currently in the process of adding a flight-booking feature to its platform and recently acquired restaurant booking app Resy. Last November Airbnb co-founder and CEO Brian Chesky introduced Trips, a platform for users to arrange for local guided experiences and services as well.
Truffle-hunting in Italy, anyone?