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AirBnB is at that stage of the new economy finance cycle (from startup to public listing or IPO via venture capital) where they have been taken over by bean counters ie venture capitalists whose job is to sell it to the highest bidder which means they need to show strong $growth in revenue. There are a number of standard ways to do this (I used to be a management consultant, it ain’t rocket science, 'cause I was one of those as well). They seem to have plateaued in terms of number of hosts in some of the bigger cities (ie new hosts starting = old hosts quitting). So there is not much room for growth there but they can grow their guest market which is why they are looking more like a traditional discounted hotel room booking website. There is not a huge lot they can do in terms of value add or share of wallet, traditionally another way to gain growth, but offering discounted prices to local attractions and splitting the profit with hosts is a suggestion. Perhaps getting hosts to do the work of listing local attractions is the start of them doing that.
One other thing is they are charging guests about a 5% booking fee. They say this is to maintain their website and provide 24/7 support to guests but clearly this is worth a huge amount, maybe half their revenue, as it is about the same as what traditional booking sites charge. And they don’t tell hosts they are doing this. As I am competition with hotels as well as other AirBnB hosts I have had to drop my price to remain competitive. I only found out when one of my guests told me about it!
And they still charge hosts about 5% as well. On the plus side their website is a lot, lot better to use than others (I am also on Stayz). Tip: it can be frustrating at times so I saved all the pages links I use to an AirBnB folder. And the payments to Paypal are prompt (and very welcome!). The one time I had to contact them (in SF from Australia) they answered promptly and called me back and were very helpful. So overall I think their model is quite good.
One suggestion to make hosts happier. I get they don’t want to tell hosts what individual guests ratings are (but I can work it out from one set of total ratings to the next but it is tedious) perhaps to stop hosts contacting guests in the heat of the moment and berating them. But how about releasing the info a month later? It really is annoying to get a lower rating and try and work out why if you don’t know the guest and the circumstances of their visit. It makes it difficult to decide whether to do something about it or just ignore it.
Overall I give AirBnB 5 stars, but we all know what that really means
Interesting insights. Personally, I’m not a business minded person - just doing this to pay the bills, keep afloat in rough times etc. Faheem is right, though, that the guest pays a high service fee, anything between 10-15%. Too much, in my opinion.
If it weren’t for Airbnb I’d be renting long term to someone who:
wont look after the house/attend to the pool and garden/notice that thing that’s about to break/ and pays bugger all rent for the privliage (rents are down here at the moment) and I won’t be able to freely access the house as I can now.
I’m also listed on Tripadvisor-nothing-not even an enquiry
" " " Aura (a new Aussie site) -nothing
" " " Gumtree (like Craigslist) -nothing
Not bothering with any of the other sites as they charge 10%+
So far I’ve already made more $'s in confirmed bookings from March to Dec than if I’d rented it out full time. It also gives me 155 empty days in that period to clean/maintain/renovate/party or turn those free days into more $'s (it’s only July so I’m confident this will happen).
There’s my VALUE.
I’ll manage with a sometimes not so perfect website/provider to get that.
That is exactly correct. I thank @SirNightingale for starting this thread. I have been saying as much for about three years, which is how long it took me to see Air for what it is. Noble Peace Prize, my ASS.
(By the way, I get MORE guests from VRBO these days, by the way, but that is my market - it may not be yours.)
I am not sure about their market, but I have insights about my market in the Catskills. I tend to get slightly older folks on VRBO. Air is more Brooklyn creatives and young urban professionals. My VRBO people come for longer stays generally and pay my price without expecting to negotiate - they also come from all over - not just the New York metro area.
There has been other discussion about it here, but I think Air in NYC skews young and on the hunt for a cheap, short stay.
It differs that hosts have absolutely no protection against back charges with VRBO and their customer service sucks. Its when guests dispute the charge with their credit card and VRBO first pays hosts and then withdraws money from host’s account . SO, anyone can say that they did not stay or cancel the last minute and then dispute the charge and host does not get paid. Then there is a long dispute process, in my case its since March, and i am still waiting for my 2K.
Horrible, awfull and money hungry Airbnb NEVER does it to its hosts. I am sure there are disputed charges with them too, but they ALWAYS pay hosts and take care of it themselves.
Yeah, read your post and your reasons, and then made made my point moot. I like the type of clientele from VRBO, but like you say, unfortunately it is the company that leaves a lot to be desired. A pity.
Dear Fred, why did you do that… posting that witty comment, now I pressed your listing and now I want a Holliday myself… what a fantastic place you have…
I’ve been wanting to see your new pictures! My husband and I are wanting to stay there, it’s just too bad your close down for repairs during our anniversary when we typically take trips. Now to decide if we’d want to take the whole family or just us? We were talking with friends about it, maybe a double date vacation.
You can see how much a guest pays by picking some open dates on your calendar, temporarily changing your prices to what the guests in question are paying, preview your listing and ‘book’ those days. You can see the exact service fee they will pay. Don’t forget to change the prices back to what they should be.
