As Airbnb continues to grow and pursue its ambition of becoming the Superbrand of Travel, changes in the company’s model are sure to follow. On some fronts, Airbnb seems committed to maintaining the hands-off, platform-only approach to business in the sharing economy. Yet in other areas, they are taking a more proactive approach that allows the company more control over the guest experience.
Jasper is joined by Deanna Ting, Hospitality Editor for Skift, and David Jacoby, President and Co-founder of Hostfully, to discuss Airbnb’s pursuit of world domination in the travel space. Their round-table discussion delves into the company’s ongoing legal issues and how recent acquisitions point to a shift in the company’s tactics.
Listen in to learn how you can stay on top of what’s happening in the travel industry as well as the specifics of Airbnb’s evolving approach to business.
Airbnb’s Legal Issues
The future of Airbnb
This episode is sponsored by Aviva IQ. Aviva IQ automates messages to your Airbnb guests. It's also free!
Complete Transcript for Get Paid for Your Pad Episode 134
Welcome to Get Paid For Your Pad, the definitive show on Airbnb hosting, featuring the best advice on how to maximize profits from your Airbnb listing, as well as real-life experiences from Airbnb hosts all over the world. Welcome.
Jasper: I began using a really cool service from Aviva IQ, and it’s made my life so much easier. My guests love receiving all the important details about their stay exactly when they need it, and I love all the five-star reviews I’m getting on communication. Check them out at www.avivaiq.com.
Welcome back, everybody, another episode of Get Paid For Your Pad. Today, I’m here with my cohost and one of my favorite friends, David Jacoby. Of course, he’s the President…
David: Aw, shucks. You say that to everyone, Jasper.
Jasper: President of Get Paid For Your Pad, introducing you, President of Hostfully and a serial entrepreneur, and what else, David?
David: No, that’s good. How about Superhost?
Jasper: Superhost, of course. I can tell because I’ve actually stayed with you, and I have to say, you were a pretty good host.
David: Aw, shucks. You say that to everyone too, Jasper.
Jasper: But, it’s not just us today. I’m very excited to have Deanna Ting on the show, and she’s a reporter for Skift. So, Deanna, welcome to the show.
Deanna: Thanks, guys. It’s great to be here.
Jasper: Could you tell us a little bit about yourself and about Skift for those who are not aware of it?
Deanna: Sure. So, I am a Hospitality Editor at Skift, and Skift is best sort of described as a travel industry kind of, I guess, intelligence forum, is the term that we like to use. But, basically, the part that I work on for Skift is, I work on our editorial team as one of its reporters, and in my role, I really write a lot about the hospitality industry, and especially about Airbnb. And our audience is primarily consistent of people who work in the travel industry, so it could be Superhosts like David, it could be airline executives, it could be cruise line employees, basically. And anyone and everyone who works in travel can definitely get a little something out of Skift.
David: Thanks for that, Deanna. I get a newsletter every morning in my Inbox from Skift, the Skift daily newsletter, and I love that. It really gives a great overview of the travel industry, and it seems like your focus is not just on Airbnb, but on kind of hospitality in general. Is that right?
Deanna: Yes. Covering Airbnb, in and of itself, is sort of a full-time reporter’s beat, but in addition to that, I also write a lot about hotel companies, though, your Marriotts, your Hiltons, your Hyatts, your Wyndhams, all those bigger players, and also smaller players too.
David: All right, wow. Sounds like you have your plate full.
David: One thing I’ve been following closely from your articles over the past few years are the legal issues going on in many cities. I know you’ve done a lot with New York, but then there’s also San Francisco, and Chicago, and New Orleans, and it seems like it never ends. And I’m wondering, for the listeners out there, if you could kind of give an overview on what some of the legal issues are, what are the latest legal issues. I’ll maybe have some follow-up questions, specifically with regards to how things are going in New York.
Deanna: Sure, okay. Yes, like you said, there’s always something going on somewhere, in some part of the world, with regard to regulatory issues and Airbnb. I feel, right now, the climate, it’s still sort of like that same tension, but I definitely do feel like a lot more cities are becoming a lot more responsive in their ways to try to approach this topic. They’re much more cognizant of the potential complications that home-sharing can bring about with the good things and bad things. So, I think that really, really depends on what city you are talking about.
You know, we talked to MFS Research International, it kind of runs the gamut. Here at Skift, I focus primarily on New York because I live in New York. It’s a little bit easier for me to kind of pay close attention to what’s happening with regard to enforcement and laws, but, you know, in Europe, there’s definitely been a lot of activity lately. I think, today, some news broke about Amsterdam issuing plenty of fines to Airbnb hosts who are in violation of their rental laws. So, there’s a lot going on.
Is there anything that you think we should talk about in particular doing with New York, or anything that you guys have been keeping an eye on that you want to talk about?
Jasper: Well, I actually have a very specific question because, lately, I think what’s really interesting is that in London and in Amsterdam, Airbnb has, for the first time, they’ve agreed to work with the local authorities and to enforce the local regulations on the platform, right. So, in Amsterdam, you can only rent out for 60 days, and then your calendar will actually be blocked. The same is true in London for 90 days.
And my question to you is, I know a little bit about what’s going on in New York, they started to hand out fines and stuff, but they haven’t gotten to the point yet where Airbnb’s actually enforcing the rules. So, my question to you is, do you see this coming to New York and, potentially, other places where there’s been some opposition against Airbnb, such as San Francisco and some other big cities?
Deanna: Yeah, that’s a great question. Yeah, I’ve asked that question myself too, and it does seem like Airbnb has a somewhat different approach to regulations in Europe, dealing with the European municipalities, versus how they deal with the cities here in the U.S. I think, you know, from what I’ve reported on and what I’ve looked into, it does seem like Airbnb is somewhat more willing to compromise more with cities.
I think the best example of that would be the type of partnership that they’ve tried to strike with the local government in Chicago, although that too has come up with its own slew of issues regarding privacy of the hosts. But, you know, basically, in Chicago, they kind of struck this deal where they said they would work to sort of automatically register the hosts there and that they would share information about the hosts and how often the hosts are hosting people or guests in their homes, and share that with the local government, but that came under fire by a lot of hosts who said that that was sort of a violation of their privacy. I think they’ve sort of tried to come up with a better compromise than that. I think that they recently came up with something that kind of said that it would only be for certain instances or that paperwork had to be filed for that host’s private information to be shared with the city, or something like that.
But, yeah, I definitely think that there is somewhat more of a willingness, but again, there haven’t necessarily been these bold gestures made by Airbnb to really say, “Look, we know what the laws are here and we’re going to make sure that we enforce them on our platform.” And, I think, in New York and in San Francisco, they’ve said that they’re doing that one home/one host sort of policy, but whether or not that’s really enforceable is really questionable. So, yeah, I’m not quite sure.
Interesting enough, I do know that tomorrow, Brian Chesky, the CEO, is planning to hold some sort of media announcement tomorrow, but I don’t know what the topic is exactly. But, following that announcement, Chris Lehane, their Head of Public Policy, is making himself available for Q&A, so my gut tells me it probably does have something to do with their future sort of policy plans.
But, yeah, it’s interesting. I don’t know why they’re more willing to kind of cooperate with local governments in Europe versus the U.S. It’s just a little interesting.
David: I’m looking forward to that announcement. I’ll anxiously be awaiting my email, my daily Skift newsletter to see what that’s about.
So, to what extent do you think it’s Airbnb’s responsibility to kind of be the policemen for this? Are they just a platform like Craigslist or other sites like HomeAway, or are they something more, and as they start getting involved in these legal issues and start tracking who’s registered or not, do you think that will stop the growth of short-term rentals, or will people just move to other sites like Craigslist and HomeAway where it’s easier?
Deanna: Right. I mean, you summed it up perfectly. Yeah, I do think that, given their track record and how they’ve sort of dealt with a lot of the regulatory things, especially here in New York, they do sort of claim, “Hey, we’re just a platform. We’re just a marketplace.” But, it’ll be interesting to see if that role changes more. I think with that recent acquisition of Luxury Retreats, it does maybe signal that they’re willing to take more of an active role in kind of actually controlling the guest experience, and in that regard, too, I wonder if that will extend to really working more deeply with hosts, kind of perfecting the experience, and then, also, of course, regulating them more so.
But, yeah, you know, with regard to the most recent law, that amendment to the multiple dwelling law that was passed through in New York regarding these steep fines, what really ultimately happened was that the hosts were kind of left footing the bill in this. I mean, Airbnb isn’t really responsible, they’re not legally responsible or liable for this, so yeah, I don’t know. I mean, they do lose a lot of hosts, especially in a market like New York, which is their number one market in the U.S., their number two market in the world behind Paris. It could definitely have an impact, I think, in terms of their ability to continue to grow.
David: Yeah, we’ll see how that goes. So, related to that, I mean, you kind of mentioned Chicago earlier, one final question on the legal side. Do you think, is there any city that’s kind of got it right, so to speak, or is it too hard to tell and every city has their own unique situations, and it’s just going to be different in every case?
Deanna: I think it’s too hard to tell. Sometimes, you think it’s going to be right. Sometimes, with the kind of arrangement that they have going in London, for instance, and everyone thought, “Oh, that makes sense.” And then, there’s problems in London, same in San Francisco, one of the early adopters in terms of cities showing a willingness to work with Airbnb and other short-term rental companies, but then, also having a lot of problems in terms of that execution. I think everyone is still trying to figure it out, and obviously, different cities have very different needs, very different types of situations, and I don’t think there’s a good one-size-fits-all type of policy for this. It really has to be city by city.
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Awesome. Now, let’s move on to another topic, and that is the Airbnb experiences that’s been recently launched. I think this is a very exciting topic because I think there’s a lot of opportunity. Even people who don’t have a home… I joked when I was in L.A., when it was announced that these Airbnb experiences were starting, I joked that even homeless people can even now get on Airbnb because they can sell the experience of what life is like as a homeless person. So, I think it’s a very exciting new thing to do for pretty much anyone. What are your thoughts on the Airbnb experiences?
Deanna: Yeah, I was there for the announcement as well. I think, you know, personally, I hope it does well, but I have some doubts as to whether Airbnb can sell it. I don’t think this sector of their other business will ever quite match the scale or profitability of their homes business, but I think it’s really interesting, and I think it’s totally on brand for them to do tours and activities in a way that they have, you know, in this very peer-to-peer way. But, as we’ve seen from other companies that have tried to enter into this space, like Viator or GetYourGuide… There’s so many, I can’t name them all, but it’s very challenging to break into this sector of travel.
So, you know, kudos to them for trying it out. And I think they just, in the past few weeks, added a couple more new cities to Airbnb trips, but I think it’s still kind of early to tell whether or not this will be quite the resounding success that Airbnb’s home product has been.
And I’m actually working on a story right now, kind of looking at that and talking to some of the hosts who are posting these trip experiences, and asking them what it’s like, and the types of people they’re meeting, what they wish could be improved upon, how they are handling work with Airbnb to put these trips together. I mean, it’s pretty interesting.
David: One thing that I found interesting, the way that launched, is that it seems highly curated, as opposed to Airbnb’s original accommodations, anyone can just throw out an extra listing for a bedroom that they have or an extra couch. It seems like they hand-selected certain tour guides or certain activities for this initial launch, so I can’t just give a walking tour of ‘Murals in the Mission’ right now. Do you think this is just their way of having a successful launch to make sure everything is up to their standards and that eventually they’ll open it up to everyone, or is this a different approach that they’re taking altogether?
Deanna: I’ll give you my conversation with the hosts that they are currently working with, also a conversation that I had with Chip Conley that I had during the Airbnb Open. I don’t think they are going to try to sort of open up this part of their business too rapidly and sort of have it as a free-for-all. As far as I know right now, the initial crop of ‘city hosts’, as they were called during the pilot, one of the pilots in the lead up to this, they were all sort of vetted, Airbnb’s team personally reached out to these people, helped them sort of build their itineraries. And I think that even with newer hosts who come on who want to do these types of trips, it’s sort of similar.
So, I think, right now, it’s sort of open to anyone to apply to host one of these types of trips, but I think it’s still up to Airbnb whether or not this is really a go because there’s a lot more involved in this type of experience that just a home stay. You can even see it just in the way that they’ve marketed these trips, you know. Each one kind of gets its own mini-film or video. There’s a very cinematic approach to how they’re marketing them. So, obviously, there’s been a lot of care and attention put into cultivating this and making sure that it’s not kind of like a free-for-all, and I think that that’s got to be the right approach, especially for something like tours and activities because, you know, quality and consistency can definitely, I think, be a big challenge for them in this regard. If the quality and consistency of these trips isn’t good, that could really hinder people’s opinions of these experiences.
Jasper: That’s interesting. You know, I kind of hope that they will. I know there’s an application process right now and everybody can apply, but that’s not a guarantee that they will actually host your experience. But, I kind of hope that they will actually open it up because this is really what I love about the sharing economy, the concept that it just empowers anyone, you know. Like, it doesn’t matter what your situation is, it doesn’t matter what you own or what you have. The idea that anyone could just, ‘the pursuit of his own happiness’, as stated in the American Constitution, that idea really appeals to me. So, I definitely get your point, and I don’t know if it will happen, but I certainly hope that it will.
Deanna: Right. I think it might be more down the line. I think, right now, with the early stages, they might not be quite as comfortable with doing that, but yeah, I mean, that definitely falls in line with their whole sort of motto for democratizing travel and really making it available. And, you know, given their review system too, I think the assumption could be made that the reviews will really balance out which is a good trip and which is not.
Jasper: Exactly. Yeah, instead of having Airbnb decide, what’s a good experience, let the people who go on these experiences, let them decide through the review system.
The next question that I want to get into is, you know, there’s been a recent article on Skift which talks about co-working and the sharing economy. They talk about short-term home office rentals, which is a really interesting concept, so I wanted to ask you, can you explain a little bit about what’s that about?
Deanna: Yeah, sure. So, basically, you know, gosh, there’s an Airbnb for everything these days, right. We get pictures all the time, or you’ve seen stories popping up all the time about, like, “This is the Airbnb of dog-sitting” or “This is the Airbnb of boats”. But, I think an emerging trend here has to do with kind of the Airbnb being office space, basically, and we’ve seen this before. There are lots of companies that kind of market themselves as the Airbnb of event space, but I think what’s happening now, too, is that people are seeing the popularity of co-working spaces picking up and kind of realizing, “Oh, well, I have a really large dining table in my apartment that’s not being used during the day. Why don’t I rent out this space so a group of people can come here, or multiple individuals can come here and use it as their office for the day?” So, I think that’s sort of an interesting kind of confluence of the sharing economy and also this demand for co-working spaces.
David: Great. Thank you for that.
Also, other recent news with Airbnb, and you mentioned it earlier, was some of the acquisitions that they’ve been doing, so most recently, Luxury Retreats and Tilt. I’m wondering if you have any thoughts about that and what direction Airbnb is heading with those.
Deanna: Yeah. Well, they basically proved to me that we should definitely take Brian Chesky at his word on Twitter. I don’t know if you guys paid attention to that massive thread he did over the holidays. I certainly did, on Christmas or the day after Christmas, paying attention to, he crowd-sourced on Twitter, asking for people’s ideas about what Airbnb should launch next, and two out of those many requests seem to have come to fruition with these acquisitions.
With Luxury Retreats, we definitely knew that, as far as, you know, being last year that Airbnb was really eyeing a move into the luxury space, and even prior to this acquisition, they did have a lot of luxurious properties listed on the site. But, I think with this acquisition of Luxury Retreats, that’s definitely a bold move to really, really enter into that space, and to really sort of, as I said earlier, really pay more close attention to the on-site guest experience and sort of have a bit more control than they have in the past because, you know, if someone is spending that much money, like thousands and thousands of dollars per night to stay in one of these luxury retreats, you want to make sure that the experience is a good one.
With regard to the Tilt acquisition, I think it’s really an answer to making it easier for groups to pay for their Airbnbs. So, yeah, it makes sense, and I think it’s a good buy for them in terms of having access to that sort of technology and being able to implement it into their platform.
Jasper: Awesome. And what do you think is next for Airbnb? Where do you think Airbnb is heading?
Deanna: Oh gosh. Well, I think, you know, there’s people who think that they are well on their path to really becoming what Chip Conley and Brian Chesky referred to as sort of like this super-brand of travel. We’ve been watching stories about them potentially getting into flights, getting more into services and all other types of travel, so I definitely think that that’s where they’re moving. I think, within the next few months, we will hear something about that potential, like Airbnb lux launch, for sure.
And, yeah, I think that as they continue to grow, I think those regulatory issues will still be there, and I think if that’s probably a concern there, there’s just, you know, how do they find the right balance and approach to working with cities, and working with their hosts, and working with guests.
Yeah, so, I think they’ve got a lot on their plate. I think they’re going to be launching a lot, and who knows? They’re always surprising us, so we’ll see how that goes.
Jasper: Awesome. We’re getting to the end of the podcast, so I was going to ask you if you have any other things to share with the audience, and maybe also your thoughts on, when do you think the IPO is?
Deanna: Oh, yeah. I don’t know about that. I think, personally, I don’t think the IPO will be this year, but it’s more just based on my instinct than anything else. But, I do think that it’s probably coming soon, but I think they want to show their investors that they can successfully launch something outside of their traditional core business. I think they’re going to do that first before they really contemplate, seriously, an IPO. So, I think that’s why the importance of Airbnb trips is a big one there. And, yeah, I don’t know. What do you guys think? What’s your take on that?
David: Yeah. First, I kept hearing that first the legal issues need to be settled, but it doesn’t seem like they’re going to be settled anytime soon when we talk about the world and things keep popping up in different cities, so at least just having a foundation and an approach for how they will handle it in terms of working with the cities, like what you mentioned with Chicago, and I know they’re in mediation with San Francisco right now.
And then I heard, well, let’s see how experiences launch, so as you were saying, they could show investors that they have different ways of making money. I mean, even in some places, they don’t need to necessarily make money on listings because, you know, maybe that’s free and then they can have just the experiences. So, now that that’s kind of launching, and they’re launching in over 50 cities, I think, this year, we’ll see how that goes.
But, I think there’s still too much going on this year, uncertainty that they want to have more control over, and at the very least, or very earliest, it’ll be next year.
Deanna: Yeah, that’s exactly how I feel, too.
Jasper: And I totally agree. They also have a lot of money, still, in the bank, so I don’t really see the need for an IPO right now. I mean, the company is, it’s such a big company that I can’t imagine that the founders are really in a hurry to cash out their shares or anything like that. So, yeah, I think it’ll be a while. I think it’ll be 2018, for sure, or even later.
Deanna: Yeah, and especially, you know, if they are kind of contending with so many regulatory battles, too, I mean, opening themselves up to go public really makes it, like, you have to divulge a lot more information about your company when you do that. And so, I don’t necessarily think that they will be attuned to issue an IPO immediately or anytime soon. So, I think they want to stay private for a little bit longer.
Jasper: Awesome. So, we’re all in agreement about that, no IPO in 2017. And who knows? Maybe we’re all wrong, but time will tell. Deanna, thank you so much for coming on the show. I really appreciate your time.
Deanna: Yeah, great. It was great to chat with you guys. Thank you so much for all the great questions.
Jasper: Yeah, no worries. And for the listeners, you can find Deanna’s articles on Skift, skift.com.
And then, David, thank you so much for being on the show, as well.
David: Of course, my pleasure. And, Deanna, I love reading your articles on Skift. You always have a great pulse on what’s going on in the vacation rental industry. So, thanks so much for all your articles and thank you for being on the show with us.
Deanna: Thank you. It’s so great to get to chat with you guys. And I love covering this industry, and there’s always something new to learn about, so it’s great.
Jasper: Awesome. Well, maybe we can have you back on at some point for some more insights.
Deanna: Right, when the IPO comes out.
Jasper: Exactly. Then we’ll know if we’re wrong or right. Awesome.
So, thanks everybody for listening. And, of course, next week there’ll be another episode of Get Paid For Your Pad, so we’ll see you then.