Gwyneth Paltrow, Ashton Kutcher and Lady Gaga were just 3 of the many celebrities who gathered in Los Angeles on November 19 to mark the last day of the Airbnb “Open” the company’s 3rd annual conference, attended by hosts from more than 100 countries.
Airbnb is the brainchild of Brian Chesky and a friend who decided to make some much needed money by renting air mattresses in their San Francisco apartment for guests coming to visit the California city known for astronomical hotel costs. “Airbed and breakfast” was the original moniker and in 2007 Chesky hosted his first 3 paying guests.
9 years later, Chesky has a personal fortune valued at more than $3 billion dollars and at 35 years old is a person Time magazine calls one of the “100 most influential people of 2015.”* A recent story about the company’s strategy for global expansion gives it a valuation of $30 billion*, or almost $10 billion more than the current market cap of Marriott hotels, the world’s largest hotel chain.
Airbnb, like Uber, another California startup gaining publicity but in the transportation sector is what is seen as a leader in the “sharing economy” where people use their current assets (home or car) to make additional revenues, while offering a unique and competitively priced alternative to traditional industry stalwarts.
The concept of Airbnb is that users look to the site to find accommodation in place of the standard hotel/motel fare when travelling for leisure and even on business. Guests can chose between a shared room, private room and entire residence when booking and many, like Kutcher and Paltrow mention the site helping them truly experience the locations where they are renting.
Thou Paltrow, who mentioned her use of an airbnb when taking her young family to Puerto Vallarta Mexico, and Kutcher who moved into an airbnb after separating from his then wife Demi Moore, may have more funds than most of us, airbnb attracts a broad spectrum and its rentals compete with hostels and five star hotels alike.
A quick scan of airbnb properties in the local area shows the following listings: $24/night “Private Room in Hamilton”, $61/night “entire home in Hamilton” and a $71/night “private room in Hamilton” with a 5 star review being offered by a “Superhost.” Superhosts are experienced hosts who the company says are “passionate about making your trip memorable”* and have gotten reviews of 5 stars from at least 80% of their renters. These Hamilton superhost are a couple whose profile mentions they are a “fun loving family of 3” and guest reviews include comments such as “we were coming (from out of town) to enjoy the Hamilton Supercrawl festivities….the location was perfect…thanks for a lovely stay!”
Airbnb’s revenue comes from the commissions it charges the host and the guests which can range depending on a number of factors. A recent booking for two weeks at a downtown Toronto condo totalled $1735 which included the guest’s booking fee of $60. The host paid a service charge of $52 which totalled $112 or more than 6% for head office.
Chesky mentioned during his address to the conference that the company’s busiest date was in August of 2016 when Airbnb had 1.8 million global bookings on a single date, and as the company looks to start offering tours and focussing on business travellers it can be expected this will soon be surpassed.
It is not all smooth sailing for airbnb and other companies in the short term rental market. Protesters at the Los Angeles conference complained that the company hurts those needing affordable housing (as landlords look to higher revenue streams) and jurisdictions worldwide are looking at regulating this market where currently hosts do not always pay taxes and occupancy fees required from traditional accommodation providers. Further, opponents question the health and safety of airbnb properties, which people can post for rent without an official inspection in the large majority of jurisdictions.
But for the more than 650,000 global hosts including more than 100 in the Hamilton area, Airbnb provides an opportunity to meet people from near and far, a way to showcase the pride they have in their homes and in their communities, and to do what Brian Chesky did a few billion dollars ago when he set out to “make a few dollars.”
Written by: Andrew Sloan
Andrew Sloan is a Bay Observer contributor, and an Airbnb host.