Launched 5 years ago, the startup is now worth an estimated $10 billion. AirBnB has certainly made an impact on the hotel industry, offering homeowners a way to earn good money for their spare rooms & properties. Is AirBnB a fierce competitor to the hotel industry, or will its legal challengers force its demise.
Its an interesting idea, that back bedroom you no longer use, the one that’s gathering dust, has potential to earn good money. You rent it out to the public for a set fee, which is much less than the standard hotel rates. You meet nice people and they pay you for your hospitality.
That’s the intent of the room sharing website AirBnB. A nice idea, until you read of the legal battles with the State of New York and the reports of the wild sex parties being held in rented rooms/apartments.
Websites like Flipkey and HomeAway have been in operation for as many years. A website that allows homeowners to rent out their homes for a set fee, usually a weekly or monthly amount. But you never hear of stories like the ones that are plaguing AirBnB. So what is the difference between AirBnB and other home sharing websites? Why so much attention with AirBnB?
AirBnB publishes properties for rent ranging from the spare bedroom to the entire condo/house as a nightly fee, similar to a hotel accommodation website. Flipkep publishes entire properties for rent for the entire week/month, which is dissimilar to hotel accommodation websites. In a nutshell, that’s pretty much the main separator, room based and a nightly tariff. Although these differences are not always the main variance, they are the majority of distinctions.
Although it’s reported that AirBnB has curbed its recent legal battles by the State of New York, being it’s illegal to rent out your home in the state of New York, Airbnb still faces scepticism from the non-believers. Most probably skewed by the recent reports of parties, sexual rendezvous and the odd dirty bathroom, AirBnB faces a convincing negative perception.
To test the theories, I rented a condo in San Francisco from Flipkey and a friend rented a room in Boston from the AirBnB website. We couldn’t locate a room for rent in Flipkey, so we to settled for the condo.
The experience varied widely. While the condo I rented for a week (minimum amount of time) was clean, well furnished and mine for the entire week, the room in Boston was not. Without going into too much detail, the difference in experience was vast.
Researching AirBnB online, I uncovered many stories pertaining to homeowners claiming to have made substantial cash from renting out their properties. Ranging from the rented out room in the share-house to the 1 bedroom flat in New York. Again, I uncovered unsavoury remarks concerning the room’s cleanliness to homeowners discovering all sorts of things on their return to their property.
Interestingly, I struggled to locate anything negative concerning Flipkey or similar vacation home websites. Which led me to think about the market and the audiences they are marketing to.
Could it be that AirBnB’s main clientele are those individuals who would normally occupy hotel rooms, looking for cheaper alternatives? And Flipkey in a similar situation, where their main clientele are those preferring holiday or vacation house style experiences and less the hotel style accommodation.
It’s an interesting analogy and it’s certainly true that hoteliers experience similar issues to those reported by AirBnB landlords. It can be argued that hotels are geared for dealing with such disturbances with their onsite security, adequate property insurances and quality fittings and fixtures. Thus controlling the situations at hand, quickly and more easily.
Similarly, in those character-building motels where you are afraid to put our feet on the floor or get inside the bed sheets, don’t seem to raise the same level of noise as AirBnB. You don’t mention it as you “kind of” expected it, it was cheap and the last you could find.
Is there an expectation that you are going to receive a 5 star experience with an AirBnB property? Or as an AirBnB landlord, is there an expectation that you are going to come home to an undamaged and immaculately clean property?
Hotel companies certainly don’t expect immaculately clean rooms on the guest’s departure; it’s called house cleaning and there is usually nothing broken on your check out as your credit card is on file at reception. But for this, we as consumers expect a clean and tidy room for the night. We know the level the hotel has gone to, in an attempt to ensure a safe and happy night sleep.
They are interesting questions and AirBnB is gaining a lot of traction. It will be fascinating to watch the growth or slowing of the company in the coming years and how they will deal with the legal issues at hand.