Business Maverick

NEW RENTAL WAVE

Airbnb says many of its hosts report opening their homes to short-term rental has kept the wolves at bay

Airbnb says many of its hosts report opening their homes to short-term rental has kept the wolves at bay
(Photo: Cyril Marcilhacy / Bloomberg via Getty Images)

Inflation is eroding household incomes and Airbnb says the cost of living crisis has inspired a ‘new wave of people’ to consider hosting for the first time.

They’ve come a long way since their “airbed and breakfast” venture, started during the recession in August 2008, in a parallel time of financial distress.

In little more than 14 years, Airbnb’s four million hosts have welcomed more than a billion guests in almost every country across the world, offering accommodation and experiences to cater to just about every taste – from amazing views and castles to yurts and OMG! stays.

The accommodation marketplace has released its latest data for November, showing typical hosts in South Africa earned over R25,400 a year.

Globally, host earnings increased by 30% in Q3, year on year, and hosts were securing bookings quickly, with half of Airbnb listings activated in Q3 2022 being booked within three days.

Keeping the wolves at bay

More than ever, people are looking to find ways to supplement their income, says Airbnb founder Brian Chesky.

Mirroring the global economic crunch, almost half of Airbnb hosts around the world use the income earned through hosting to help them stay in their home, while 46% said they used the extra money to pay for food and other items.

This is no surprise, given that inflation is eroding household incomes and Airbnb says the cost of living crisis has inspired a “new wave of people” to consider hosting for the first time.

In South Africa, Airbnb accommodation offerings range from about R260 per night for a private room in Robertson, to entire villas in party central, Camps Bay, costing over R75,000 per night.

Allowing strangers into your home can be disconcerting, which is why Airbnb has announced new tools and specialised support to get started.

Chesky says that starting this week, Airbnb will be verifying every guest booking on Airbnb in 35 countries, which covers 90% of reservations. By next autumn, every guest booking on Airbnb around the world will be verified through reservations screening technology.

“This technology looks at hundreds of factors to block bookings likely to lead to unauthorised parties.”

Strangers in our midst

Airbnb’s entire business model rests on the premise that strangers can trust one another, which is why it has spent millions of dollars on improving its technology and staffing its safety teams.

It’s had a string of bad PR in recent years – from party houses, to sexual assaults, gas leaks and hidden cameras.

On 23 May 2019, Bloomberg reported that six Brazilian tourists died in central Santiago, Chile, from a carbon monoxide leak in an apartment they rented through Airbnb.

In November 2019, a Halloween party at an Airbnb left five people dead, forcing the company to overhaul its safety measures.

In August the following year, the company announced a temporary ban on all parties and events in listings globally, after reports of rowdy and destructive parties circulated.

Then there were the shootings: between March and October 2020, about 30 shootings were connected to Airbnb rentals in the US and Canada. In one high-profile case, Airbnb announced it was pursuing legal action against a customer in Sacramento, California, for hosting an unauthorised party in a rental home that ended in three shootings.

In June this year, it shut down parties for good, by codifying the ban as company policy.

Already launched in the US and Canada, “in the rare event that something were to happen”, Airbnb has tripled AirCover damage protection from $1-million to $3-million, which now includes protection for cars and boats and parts of your home, as well as expanded coverage for art and valuables.

The company’s reservation screening technology, aimed at reducing the chance of disruptive parties, will be expanded worldwide early next year.

Airbnb Setup has been redesigned and simplified to help hosts to put their places on Airbnb, which includes one-on-one guidance from one of more than 1,500 Superhosts in 80 countries, an experienced guest, who has a good track record on Airbnb for your first booking, and specialised support from Airbnb, which provides one-tap access to a team of Community Support agents, who assist with account issues, payments and other queries.

In May this year, Airbnb launched “Categories” to help customers discover homes they never knew existed (and probably need to google).

These are the six new Airbnb Categories:

  • Top of the world – Homes around 3,000 metres above sea level, often with stunning views.
  • Trending – Highly-rated homes that received more listing views compared to the previous week.
  • Adapted – Homes adapted for wheelchair access, with verified step-free paths into the home, bedroom and bathroom.
  • Play – Homes with basketball courts, game rooms, miniature golf, water slides and more.
  • Hanoks – Traditional Korean homes constructed of natural materials.

Chesky said in an explainer video on the Airbnb website that his company was born during a recession, which is why they are simplifying the way people can Airbnb their homes.

Airbnb typically collects a flat service fee of 3% of the reservation subtotal when hosts get paid. It also collects a fee from guests when they book. In many areas, Airbnb collects and pays sales and tourism taxes on hosts’ behalf as well.

The Airbnb founder told Financial Times this week that they were making a renewed push to increase room supply on the travel platform, with the average price per night having soared more than 40% above pre-pandemic levels.

He said he was “not satisfied” with the inflated cost of using the short-term accommodation site, laying out measures to address the problem, including a move to pay existing hosts to help new ones get set up on the platform, as well as longer-term plans to reduce cleaning fees.

In the US, the average daily cost of a stay on Airbnb was $156 over July to September this year, up 5% on 2021 and 40% higher than the same period in 2019.

“If you’re looking for a city on a certain day, kind of last-minute, that’s not nearly what we’d want,” Chesky said. “So I’m not satisfied; I’d like it to become more affordable.”

The top five booked categories this summer for South African guests are Beach, Amazing pools, Iconic city, Beachfront and Surfing. BM/DM

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