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Beyond the sharing Economy hipsters hype - the Real Airbnb Effect

(News Item #0293, Published: 02/07/14)

If I had an apartment or a house in a popular tourist destination, Airbnb would be my dream come true.

NB: This is an opinion from Steve Brenner, co-owner of the Cross-Pollinate information site, owner of the Beehive and ex-member the STA Travel team.

I’d let them send me a photographer at their expense to take some overexposed, wide-angle shots, then have them deal with all the marketing of my place while I sit back and either accept or refuse requests based on whether the potential guest meets my aesthetic criteria.

I’d make some cash on the side, probably without worrying about paying taxes, because, you know, I need the money in this slumped economy, and then if I ran into legal trouble, or too many complaints from neighbors, or simply decided I couldn’t be bothered hosting people anymore, I’d cancel all my future reservations with a click of a button and simply ignore any angry messages by disgruntled guests.

Think about it - Airbnb is a paradise for owners who don’t want to invest time or money in the "business" of renting out their flat.

There’s no listing fee (like on VRBO or HomeAway). There’s no commitment, no overhead, and no responsibility.

This, of course, is part of the genius behind the Airbnb model – by creating an environment that’s so lenient and risk free to the host, they’ve unlocked loads of amazing inventory that has changed the perception of accommodation for many people.

The trouble is that for every wonderful host, creating an unforgettable, local experience for wayward travelers at bargain prices, there’s another host who is unprofessional (or simply inexperienced) and can’t relate at all to standards and procedures that until recently were the industry norm.

I call it “the Airbnb effect”, and my estimation of how these inexperienced hosts are changing the industry norm isn’t an exaggeration.

Some examples

In 2000, a year after opening a hotel in Rome, and a number of years after working in hospitality and as a travel agent, I started a vacation rental booking site that focuses on apartments, spare rooms, guesthouses and bed & breakfasts.

We now operate in eight European cities and have about 500 properties, all of which have been vetted to some degree or another.

All our owners risk being removed from our site if they prove to be unprofessional or untrustworthy or their accommodation doesn’t meet our standards.

Many of our owners have been in business as long as we have while some are new to the scene. Of those who are new, we are always cautious about owners who have started in this business as an Airbnb host, as their sense of responsibility is often limited.

Take for example, the property owner in Paris who nine months ago contacted us, insisting that we were the “experts” and that he really wanted our advice in terms of figuring out his pricing and policies.

He was eager to get started and open to any and all of our suggestions of how to be a better host. Flash forward to the other day when this same owner, now having hosted a number of our guests with mixed results, had a guest complain about the level of cleaning in his flat.

At first he told the guest that he’d waive his cleaning fee, which the guest accepted despite their claim that the place was filthy and overflowing with his personal items.

However, later on, a bit emotional about the situation, the owner sent an email to the guest, having decided instead that if the guests weren’t paying his cleaning fee, they would have to leave the flat clean on departure (linens washed and pressed, etc.) so the owner wouldn’t have to clean or pay a professional before returning home.

The guest, not wanting to do housekeeping and laundry while on holiday – especially for a place that was below his quality standard, was upset.

The exchange between the two became heated and the owner was so irate and so aggressive, that he insulted the guests and insisted we change all his policies and raise his prices (some 2-3 times what it was at).

Needless to say, he’s off THE site - but still hosting on Airbnb.

Or there’s the example of the property owner in Venice, who has a reservation that happens to fall on the week she’s finally managed to schedule some long overdue medical exams. She’s sorry but she has to cancel the reservation.

As per our policy, we’ll rebook the guest somewhere similar, and if there’s any difference in price, it’ll be covered by us (and passed on to the owner).

Fair enough policy in the old days, and easy to enforce when someone knows they won’t be getting more guests in the future if they don’t comply - but not for an owner inoculated in the Airbnb ethos. She can’t understand why she should pay any difference at all.

Surely, the guest can just find something else, right? After all, there’s plenty of time. She insists that when she does this through Airbnb or Wimdu, it’s not a problem.

Wider impact

Some may see these as isolated cases, but I assure you, they are on the rise. Some might argue that the power of the marketplace and the "trust created through honest user reviews" will cast these less than stellar owners into obscurity.

But Airbnb needs a vast portfolio of properties and depends on being attractive to owners.

No matter what their efforts are to become a hospitality company with nothing but amazing experiences, the reality is that when you are a legitimate hospitality provider who has to pay taxes, get authorizations, and do things above board, you take your business much more seriously and behave professionally because you truly do have something to lose.

Before Airbnb, I was occasionally surprised to find people who entered this business with the wrong attitude - people who were a bit misanthropic or had no sense of good customer service.

Now, post-Airbnb, I’m literally amazed at the amount of people who truly suck at being hosts, and yet despite their terrible approach to customer service and hospitality, can continue to thrive (at least in major markets were there is always a shortage of cheap, central places to stay).

And if you get too many bad reviews on Airbnb, you can always sign up for the next one on the list, starting with Wimdu.

Apart from issues of quality control, many communities both large and small are seeing the effects of the sharing economy and applying them across the board to vacation rentals.

I propose that the issue isn’t necessarily the business of renting one’s property. After all, vacation rentals have existed for decades without much attention.

The legal problems and the quality issues are a result of carelessness by owners – created out of an environment where one has no real reason to care.

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