If Uber is unique in being a taxi service that owns no cars, and Facebook a sharing site that creates no content, then Airbnb is remarkable for being the largest accommodation site in the world without owning any property. Since its inception in 2008 the company, an online marketplace for people to list, discover and book unique accommodation around the world using the web or mobile phones, has grown in an unprecedented way, with listings spreading across the global village. The company officially launched in South Africa this year, overseeing local listings while outlining plans to move upwards throughout the rest of the continent.
Airbnb was born in 2007 when Joe Gebbia and Brian Chesky, both Rhode Island School of Design alumni, decided to rent out three airbeds on their living room floor during a design conference being held in San Francisco (as the cities hotels were all fully booked). They charged each guest $80 per night and cooked them breakfast each morning, launching the service on a site called airbedandbreakfast.com. After successfully renting out all three beds, and receiving numerous requests for the service in other locations around the world, Gebbia and Chesky began targeting conferences and festivals across America with the aim of getting local’s to list their rooms for travellers to book.
They enlisted Gebbia’s former flatmate, Nathan Blecharczyk, a computer science graduate, to develop the website and began coordinating the launch of the company around the Democratic National Convention of 2008 to capitalise on the lack of accommodation. Seven years later (and now calling itself Airbnb) the company boasts over 40 million guests, 1500,000 listed properties worldwide, and a total valuation of $24B. The last year has seen the site grow by 400% and Airbnb expects to maintain a similar growth rate over the next twelve months.
Shaking the Establishment
The success of Airbnb lies in it’s timing. The company was founded on the idea of ‘collaborative consumption’ or the sharing economy, which aims to re-invent traditional market behaviour such as lending and renting through the means of technology (where, instead of sharing music books or movies online, people are sharing property and accommodation). The ability to offer more than just a place to sleep gave Airbnb a foot in the door, but it was the substantially lower accommodation costs that allowed them to complete alongside the major hotels. In general, the prices are usually much cheaper
(Roughly 30%–80% lower) and guests are able to stay with a friendly local who can steer them to restaurants and stores they may never find otherwise. Hosts are able to offer shorter-term rentals from two days up to two months, and are able to manage bookings based around their own personal schedule
In the summer of 2010 Airbnb officially launched a photography program that gave hosts the opportunity to automatically schedule a professional photographer to take pictures of the space that they were renting. This allowed the prospective customers the opportunity to verify the address as well as see the space they were renting, assuring them they were not being sold on false promises. In 2011 the company began introducing the Airbnb Social Connections application, which, when combined with Facebook, would show the avatars of mutual connections, friends or acquaintances who have stayed with or know the host. The Social Connections also allowed guests to search for hosts based on other characteristics, such as Universities or High Schools.
The South African Market
On the 27th of July 2015 Brian Chesky launched Airbnb in South Africa, the companies largest market in Africa with 9,400 homes listed. South Africa makes up for two of the five largest markets in Africa, with Cape Town hosting 5,000 listings and Johannesburg hosting just over 1,000. The number of South Africans using the service to travel is increasing by 163% per month, with the majority travelling locally and the US, France and the UK making up the most popular international destinations.
At the launch Chesky detailed the companies plans to expand further across the African continent, with listings in the region increasing by 145%, while the number of Africans using Airbnb to travel has increased by 139% in the past year. Kenya and Morocco are two of the key areas they plan to focus on, with Morocco currently hosting around 3 000 listings and Kenya around 1 5000.
Using Airbnb to Host and Stay
Where Airbnb differs from traditional rentals is that the renter is not simply leasing four walls and a roof, but selling an experience. Airbnb hosting is service sector hospitality, closer to that of a hotel concierge where the host doesn’t just provide the room but offers advice on activities, provide directions to landmarks and answer questions about the weather. As such Airbnb hosts compete on greater customer service, relying on the feedback of the guests in promoting their accommodation.
As there is no clear ‘model’ for the Airbnb experience, one common theme among hosts is that it’s important to set expectations upfront. While Airbnb itself provides detailed guides to guest and host etiquette, both parties can sometimes find themselves at odds due to differing expectations. In many cases guests are comfortable with a more informal setting, while others expect the same service they’d get at a 5-star hotel. It is important for guest to understand that they are not booking into a hotel, they are in fact staying at someone’s home, meaning there is no daily maintenance crew to clean up and there is no 24 hour service on call. The concept of being in someone’s home is the plus of Airbnb, and the service is not an alternative to staying in a hotel. Hosts are given the opportunity to reject a request, if the timing is inconvenient, the guest request is rude or abrupt or if the host and guest are not a good fit.
A typical listing provides the standard number of items you would find at a hotel, which includes:
• Ironing board
• Coffee maker
• Full-length mirror
• A few clean towels
One harsh reality of monetising a private property is that it becomes open to public criticism. Which is why both guests and host need to have a clear understanding of what is being offered, to avoid any negative feedback and hurt feelings.
Tactical Tips for Airbnb Hosts
• Leave tourist guides such as local restaurant listings etc out for guests to read.
• Leave a welcome guide / FAQ list out for guests (which includes things like the WiFi password, and house rules, or says things like, “The light switch to the bedroom is behind the door.”)
• Set expectations clearly, especially around check-in procedures to avoid situations like late check-ins or outs (as often guests assume it’s okay to show up at anytime, as if you’re going to be there 24/7). As people are used to showing up to a hotel at anytime, so some people project that same expectation onto their Airbnb host. Be clear about what time is appropriate for check-in, and include this in your welcome email.
• Create a list of “fun stuff to do” if they arrive early (before check-in time) — recommended restaurants, cafes, coffee shops, parks, etc. Include this in the welcome email.
• Write the directions to the house in the welcome email, as well as the best way to reach the destination, whether by public transport or with a rental car; don’t just tell them to GPS the address.