Airbnb: A glimpse into the future…

AIRBNB- A GLIMPSE INTO THE FUTURE

 

Authors:

Chris Chilton – Co-Founder of Simply Hospitality

Ricky Neckles – Founder of Short Term Stays

Airbnb has not only changed people’s lives and how they travel, it has also completely transformed the hospitality landscape for good. The hospitality industry is arguably the most active and exciting industry to work in at this point in time – mergers galore, new businesses sprouting up all over the place, and there is a new dimension as well as fluidity that is quickly shifting and defining world travel.

The future is never that far away and neither is change, it is all a question of perspective and best guess. I often wonder what will happen in the next five years and even further, trying to spot the trends and themes that point toward future possibilities expected and unexpected.

As someone who has decided that hospitality is the industry I want to work in, I have turned my attention to what I think the future holds, specifically in relation to Airbnb. A company that is still in the early stages of a long process to create lasting value and achieve that aimed for community super brand status, or in other words – the cultural hub of global hospitality, knowledge and experiences.

The Evolving Host

There is already a mobilised selection of hosts around the world voluntarily helping Airbnb, in San Francisco (SF) and other states within the US and outside of it as well. In SF, some hosts formed a body called Home Sharers of SF to help lobby the SF governments against Proposition F, which was defeated. This was by far the most published example from late 2015 but I am sure there are many other hosts doing the same thing albeit not as aggressively.

Airbnb has even awarded hosts who have made this effort to go above and beyond the call of hospitality ‘duty’. You can find the list in their blogs about the host winners in 2014 and 2015.

So already there is a burgeoning legion of loyal hosts who are willing to go that extra mile for the company, that for many have given them a new opportunity, calling, and purpose in some respects.

Mentoring is the next natural section of the host that is due to be cultivated, which needs a reward system, not an award system to sustain it. Airbnb announced at its last Airbnb Open that it will be introducing a Host Mentor Program, the system will work as such, a host will mentor a new host for 30 days, this will count as one mentorship, achieve ten and the host will receive a $250 accommodation credit to use on Airbnb.

Let’s be honest they are not getting that much back for the effort that will be involved in ranking up the mentor system. Some hosts are always going to need more time, effort, guidance, also, 10 months is a long time. This is why I feel that there will in time have to become a new level of rewards and even possible employment/freelance opportunities.

Naturally as mentors gain a reputation and experience, Airbnb will be able to identify hosts which could become employees down the line. Personally, I feel that we shall see Airbnb having to become more locally supportive, to their hosts. They are going to need representatives on the ground to help bring hosts together, as much as support and advise them when needed. They are not going to be able to do all of this from a call centre. Therefore, the mentorship provides a unique base whereby Airbnb can establish support networks around the world if they choose to do so.

It has gotten to the stage where certain hosts have gained enough confidence and are looking at attracting more work through other channels. It is easier for entire flat rentals rather than private rooms to branch out and list themselves on other websites like Flipkey/TripadvisorVRBO or HomeAway, but it will start to become more of a common trait.

One major reason for this is due to oversaturation, which is and has already started to become a problem. Many hosts are finding that the work is harder to come by than it was in the beginning and this is probably set to continue as more people sign up to the Airbnb platform. With so many hosts available it also means that prices drop significantly, and unfortunately with a price drop standards are never far behind.

Hosting Standardisation

The idea of hosts helping new hosts and hosts sharing information with other hosts has its own sense of re-enforcement. The Practical advice a host can give or expect to receive from others, regardless of location, price or region is quite narrow in terms of its essence and values; welcoming attitude, always striving to do their best, wanting to please and going that extra mile and importance of communication etc

Practicalities like cleanliness, organisation and efficiency are the backbones, that these values will be framed around, even if they are expressed in a variety of ways, due to cultural and country specific differences i.e. laws, practices and products.

So it is only natural that the endorsement and repetition of the narratives mentioned will be passed on more easily and effectively to new hosts as they sign up, thanks to the growing community centre and forums within Airbnb’s platform. This will mean that there will be less of an excuse for not knowing, but also easy access for new hosts to learn and implement best practices that suit their circumstances.

One way could be in the form of an Airbnb Hosting Guide split into the various fields of hosting options – entire flat rentals, B&B and retreats. I would not be surprised if within a few months all the data will be collated and made freely available to new and aspiring hosts.

Externally there is already a number of Airbnb advice websites and companies that are offering their services to other hosts.Learn Airbnb are the most successful website to offer support and advice to hosts but there are others Jasper Ribbers of Get Paid For Your Pad as well as Danny Papineau from Airbnb Secrets both offer advice, courses, podcasts and more to hosts renting out entire flats on the platform. There are also individuals such as Evelyn Badia and The Abundant Host who are offering their services to those who rent private rooms through Airbnb, each with their own approach and forms of advice.

We at Simply Hospitality are also one of the many providing these services, but we are coming from a Bed & Breakfast angle, seeing as that is our expertise. This is an increasingly important and lucrative sector in the industry as there are lots of hosts, many of whom will want to take the short cut and learn from those who already have all the answers.

In a nutshell, the standardisation of Airbnb will happen, be it internally driven or externally pushed. The consistency aspect of accommodation becomes a more important factor as generations get older and their circumstances change ie they have a family or have less time to spend travelling or more disposable income. The competition between hosts continues to grow, there will be a need as well as a want for them to sets themselves apart from other hosts, and the best way to do that is to get better.

Over saturation is also making it very hard for a guest to find what they are looking for without spending hours and hours researching, which leads me nicely on to my next point…

Re-arrange, Re-define

There will come a time when Airbnb is going to have to think about the way hosts are presented to their users. They are already working on how best to match-make guests with hosts, but there is still an issue with the way a host can a) define themselves, b) are defined by how they ‘work’/’play’ the Airbnb algorithmic system.

There are very few checks in place to ensure that a host can or is allowed to tick certain boxes, for instance, Bed & Breakfast. To be a Bed & Breakfast there are certain external criteria – insurances, health & safety requirement, fire safety, landlords Gas Safety Certificate – that a host should have in place. On platforms such as Airbnb, currently anyone can tick the box without this being checked or certified.

Through this example, it is possible to see how Airbnb are going to have to make it harder for their hosts to claim certain titles and therefore what search options they appear under. This will, in turn, trigger a wave of small but significant changes that will make it much clearer for guests to know what they are purchasing, but also what they can come to expect.

The super-host system will also need refining or re-defining as the thresholds are very low in some respects and harsh in others. A host cannot be expected to always be subject to an algorithm that penalises you for external factors that are sometimes unavoidable.

There are a number of hosts who are not super hosts anymore, but this is not an issue for them nor do they maybe care much, this is especially true for hosts who have several hundred reviews. There is a need for another marker, potentially based on length of time the host has been on Airbnb, the types of services a host offers, such as breakfast or full use of the kitchen, personal tours of the local area etc. which are more clearly defined rather than buried in the body of a text.

Or perhaps there could be an indicator based on the number of 5-star reviews a host has received, which will represent a more fixed achievement rather than one that fluctuates and, therefore, create a new tier of hosts who are in many ways the ‘best of the best.’

By re-arranging the way they allow their hosts to present themselves and re-defining the way hosts are recognised by Airbnb, we will start to see a stretch effect where there is a clearer picture of the scale of standards of both the homes and the hosts themselves.

Entire rentals

This is the year of the entire flat rental, it generates the biggest chunk of revenue for Airbnb, it is an increasingly popular type of accommodation the world over, it allows a person to walk into a similar lifestyle in another country and avoids many privacy concerns that guests may have. It is also affordable when multiple people travel together and it provides access to pretty much everything a guest could want. What’s not to like?

From a host angle, this type of accommodation is also the easiest to spread across multiple platforms anything from Expedia and HomeAway to Bookings.com. There are many ways to generate an income and ensure that the flat or house is maximising its potential, in fact, you can do it yourself remotely from half way around the world, or get a company to do it for you.

Out of all of the types of accommodation, you can find on Airbnb, this is the one that has spawned numerous new businesses, from cleaning, laundry, and property management to online management, keyless lock entry and more. This is a huge growth centre and the most successful of these new businesses in the future will be the ones who can reach global status the quickest. It is seriously impressive how many new services and products have been appearing when it comes to entire flat rentals and I am sure that there is a lot more to come.

However, running a short-term rental property can be tough, especially with short bookings under a week. Wear and tear increase significantly when you have so many guests in and out of the place, it is also not a guaranteed income. For those who hand their properties over they are paying a high percentage of fees, which may work for someone with multiple listings but not for those who only have one.

Landlord hosts will eventually start to take their properties off the short-term platforms and rent back to long-term tenants, but this may take a while. Although in many ways it is easier to deal with long term tenants and it is a more guaranteed way to generate an income.

Although, anyone renting in a popular city may find that a new breed of tenant is appearing in the form of three-six month renters, who are here for a work placement or an internship. These guests are happy to rent a room in a flat, with shared facilities and have flatmates who may change over time. So you are selling private rooms in an entire flat rental. Pricing is the key to this sector of the market, weekly and monthly discounts need to be reflective of the overall rental market in any given location with a slightly higher price the less time a guest stays.

TV and the Celebrity Host

We have already seen celebrity endorsements of Airbnb, Justin Beiber, Beyonce, Maria Carey, to name a few. So it is not too far-fetched to picture them becoming the hosts for a week, taking all manner of unsuspecting guests into their home and giving them an ‘experience’ of a lifetime. I mean who wouldn’t want to sip a cocktail with a model, a famous celebrity or their favourite sports star?

By making the host the attraction and not just the location, price or even the quality of service, a new category of influence on decision making will emerge which will sway people to stay with them.

The obvious examples are the ones listed above, but what about the less high profile? Would you stay with someone who could get you into all the best clubs, restaurants, museums, galleries, and access to ‘local’s only’ venues and experiences, or who could guarantee you discounts with local attractions, restaurants and bars?

You can already rent the house of past celebrities from Jimi Hendrix to Elizabeth Taylor, footballers Ronaldinho and Iniesta also listed their pads on the site at one point.

It is only a matter of time before the host becomes the attraction and what a great thing it would be if they were all in one place…

Academy of Hospitality

Part of their future success as a brand will revolve around capturing the essence of hospitableness that they facilitate every day. With a centralised network, they can become the hub of global hospitality practices, experiences and knowledge that will become a rich source in its own right.

It will be the mecca of domestic hospitality that the world has never seen before, but only acted within. It may even become a focal point for the development of relationships between cultures and shared living on a planet that has less and less space to offer the increasing number of people.

The value of so much knowledge consolidated and documented, will also capture what has never before been possible to capture – that moment between a host and a guest that is unseen but oh so real.

A New Ecosystem

I see this in two parts, the people who use the system, and the properties within the system. You can’t have one without the other but both will fundamentally change in the way they operate and are perceived.

This has already been hinted at by Brian Chesky himself, that the relationship between people and their homes is changing and will continue to change. There will be less need to buy a home and live in it for the rest of your life, it will become an investment for income as much as or instead of a fixed residence.

As a result, people will have less personal items, the most precious of which (jewellery, clothes, computer, art, books, personal effects etc.) they will take with them or leave in a safe place. The word home will have a less permanent feel about it, the home will become where you are at any given point in time.

The new type of nomadic traveller who works and travels at the same time is not only going to increase but also become the norm. The remote host is something many hosts do with considerable success. In fact, a number have made a business out of it – take Jasper Ribber from Get Paid For Your Pad, he is one of the first to capitalise on the opportunities Airbnb had to offer in this respect.

But these are just some of the first movers, you also have the people who travel and stay in homes to house sit or look after pets. You already have people hostel hopping, and free accommodation for work etc. The next step is trained and more skilled hospitality individuals travelling and offering their services in all manner of areas from yachts to homes, to B&Bs and more.

We may even see a new type of nomadic host with a background and training in hospitality, who will be at the service of everyday people rather than just the rich. City Chalets are my first thought, big homes rented for a week or two, may have a live-in host who takes care of all their needs from breakfast, to cleaning, to dinner etc. An informally formal on-site butler service.

All in all, the easy facilitation of accommodation thanks to the internet has injected fluidity into the way people can relocate, but also transfer their lives to another country with minimal disruption to their work life.

Conclusion

This article would not be complete without mentioning the dark cloud that hangs over Airbnb, which is regulation. We have already seen the changes in the way tax is collected, there have been big questions asked about data and the fairness of Airbnb as a platform compared to the most traditional industries such as the hotels and B&Bs.

At the end of the day, these are going to be the biggest bones of contention played out over the next several years, there will be some countries or states that make forward thinking changes and others who will drag their feet. There is no one size fits all and nor can or will there be, it is just not possible.

We are going to continue to see a sporadic and mismatched patchwork of rules and laws that are still far behind the new way that P2P transactions are facilitated. However, that is not to say that it is not right to try to ensure standards and a fairer playing field when it comes to competition. Reviews by themselves are not good enough to ensure that a service is safe for consumption by the general public.

Overall the law has always played catch up, with enforcement trailing even further behind, but it will probably be making a few big leaps in the coming years to try. The question is will they be progressive or regressive?

I am betting on the laws to be progressive, allowing hosts to operate on a casual basis but there will be restrictions on those who wish to become a full-time host. I would not be surprised if we start to see a few scapegoats becoming publicised to ensure that the majority tow the line. However, it will be within platforms like Airbnb that we shall see a new type of regulation due to external pressures from the rest of the hotel and travel industry, especially if they wish to build bridges and form relationships with other big named brands.

Overall the timeline for many of the points made could be as short as the next 2-5 years. Others are definitely a long term goal and will take a long time to create and generate to ensure lasting value.

Only Airbnb’s three founders really know where the company is heading, but listening to them talk and how they describe what they have achieved, and the fact they all live in SF. It’s not too hard to imagine that there is an idealistic streak to their thinking and, therefore, their actions.

 

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