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EP136: This Week in the World of Airbnb

Has the student become the teacher?

One of the headlines in Airbnb news this week comes from the South China Morning Post, its author arguing that Chinese copycat home-sharing sites have begun to surpass Airbnb when it comes to innovation.

Silvia Li of Hostfully is back to chat with Jasper about this and other news stories, including the additional capital Airbnb has raised, the company’s intention to expand corporate business travel, and the reason behind Brian Chesky’s new title as CEO and head of community. Jasper and Silvia have fun unpacking this information – though maybe not as much fun as the guests at an Airbnb flat in Islington last week!

Topics Covered

Article #1: Airbnb Raises $1 Billion More in a Funding Round

  • Extends private face, postpones IPO
  • Facilitates additional acquisitions in the travel space

Article #2: Airbnb Explores Expansion in Long-Term Home Rentals

  • Cater to business travelers
  • Stays up to six months
  • Craigslist currently dominates

Article #3: How China’s Airbnb Copycats Beat the Silicon Valley Titan at its Own Game

  • Chinese companies borrowed Airbnb template
  • Several of their innovations have been emulated by Airbnb (i.e.: Airbnb Trips, cleaning services)
  • Chinese managers visit hosts to consult
  • Seamless integration with apps like WeChat

Article #4: Airbnb Offers Hosts Greater Role in Company

  • Airbnb announces intention to give hosts a voice
  • Chesky will host quarterly Facebook Live event
  • Goal to increase host clubs from 114 to 1,000 by the end of 2018

Article #5: Airbnb Renters Turned a Flat into a Nightclub with Tickets and a Bouncer

  • Islington, near London
  • Host on holiday
  • 200+ people
  • Police arrived, called for backup
  • Guest banned from Airbnb

Resources Mentioned

Article #1: www.nytimes.com/2017/03/09/technology/airbnb-1-billion-funding.html

Article #2: www.bloomberg.com/news/articles/2017-03-08/airbnb-explores-expansion-in-long-term-home-rentals

Airbnb Sublets

Article #3: www.scmp.com/week-asia/business/article/2074802/how-chinas-airbnb-copycats-beat-silicon-valley-titan-its-own-game

Article #4: www.sfchronicle.com/business/article/Airbnb-offers-hosts-greater-role-in-company-10984131.php

Article #5: www.factmag.com/2017/03/09/airbnb-renters-turned-flat-nightclub-tickets-bouncer/

Connect with Jasper

Email: jasper@getpaidforyourpad.com

Twitter: @GetPaidForUrPad

Instagram: @GetPaidForYourPad 

Facebook: www.facebook.com/getpaidforyourpad

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Complete Transcript for Get Paid for Your Pad Episode 136

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.

Hey, welcome back, everybody. Today, I’m talking to my cohost, Silvia Li, who is Head of Marketing of Hostfully. Silvia, how’s it going?

Silvia: It’s going great. Thank you so much for having me again.

Jasper: Yeah. I was going to chat to you about the news. There’s a lot of news this week in the world of Airbnb, so I’m excited to discuss everything that’s going on. What do you think is the most interesting news item of the week?

Silvia: I think there are two things. I think we can start with the fact that Airbnb just raised more money, and that’s something that I think all of us were sort of expecting. I think it was whether they were going to go IPO or that they were going to raise money. What are your thoughts about it?

Jasper: Well, it’s interesting because, last week, we talked about the news that was going to come out on Tuesday, which we’ll mention later, but we were wondering if it had anything to do with IPO. You know, we were kind of discussing how we felt that wasn’t going to happen. And then, they came out with this news item that they raised another billion dollars. Well, there’s a few thoughts that I have.

First of all, it’s interesting because they already have a lot of money. I think you and me actually talked about this, like three or four weeks ago, right. And so, I wonder why they raised even more, but I think it’s part of sort of the same round that they initiated in the fall of last year when they raised about half a billion, and now I think they finished the round with another half a billion, making the total of $1 billion. I guess one of the reasons why they’re doing it is to extend their private phase and to sort of postpone the IPO.

Silvia: Totally. I think, just based on the article, it just seems like, of course, they want to cover all the things related to travel, and the new money and the profits that they’ve been making will be used to acquire more companies in the space, instead of them just going and then hiring a team to just build something from scratch.

Jasper: Right. That’s exactly right. So, I’m curious to see what kind of companies they’re going to acquire because they have so much cash now. I mean, they acquired Luxury Retreats a few weeks ago for a couple hundred million dollars, I believe, so that was, I think, their biggest acquisition. So, it’ll be interesting to see what else they’re going to buy.

Silvia: Yeah. I think, part of it, it’s probably tackling the corporate travel business. I know that Airbnb still has a small business there, but I think there’s an article that said that they wanted to expand on that. And, actually, Craigslist is the one that owns a large percentage of that market, and they want to be able to tackle those folks.

Jasper: Right. That leads into another article that came out about how Airbnb wants to expand their long-term, their sublet business.

Silvia: Yeah. Well, it’ll be interesting to see what happens there.

Jasper: Because they already have a sublet part of the website, and I think a lot of people don’t know this, but you go to Airbnb.com/sublets, and there’s a separate section of the website where you can book stays of up to six months, actually. But, they’ve never really focused on it, and they don’t really promote this part of the website. And, honestly, if I’m looking at some of the listings that are on there, then I understand why because it’s, I mean, it’s just so expensive.

Silvia: Yeah, yeah. I think it can also be because they have so many verticals and it has been hard for them to just focus on that and grow it. And, I think, for that specific market, you need partnerships with large corporations and, I mean, just having it on the site, it makes it a little bit hard for people to just go and search it.

Jasper: Yeah, exactly. And, you know, it’s interesting that Craigslist actually is the major player in the sublet space, right?

Silvia: Yeah. I mean, I feel like, at this point, I would actually expect that someone else owned that market since, I mean, Craigslist… Still, a lot of people use it, but the site hasn’t, you know, it’s still pretty outdated. It’s still decently hard to use, but there’s still a lot of people that use it, and I guess the reason might be because a lot of the folks that rent these properties tend to actually be older, and I think they’re more familiar with Craigslist than with any other platform.

Jasper: It’s funny, you know, when I moved to the U.S., there were two things that surprised me. The first thing that surprised me was that people still use paper checks.

Silvia: Oh, yes.

Jasper: The second thing that surprised me was that… Well, it was Craigslist. I remember I looked at it and I was like, “Wait. I just moved to the country that’s supposedly the most technologically advanced and stuff like that.” And I was like, “And you guys use Craigslist? This looks like shit!”

Silvia: Yeah. I mean, I think I remember… You know, actually, right now, whenever I’m searching for apartments, I actually still go to Craigslist to see if there are any openings. Even though it looks kind of sketchy, I think it’s the place where you can see the most amount of listings.

Jasper: And the interesting thing is that Airbnb actually used Craigslist in 2009 when they were trying to get more traction, and one of the founders supposedly devised a system to email thousands of Craigslist users, encouraging them to migrate their home and apartment listings to Airbnb. So, that’s kind of funny.

Silvia: Yeah, it’s really ironic, but I think they were going back and then seeing what they can do to take advantage of that.

Jasper: Another interesting news item that came out was about the sort of Chinese version of Airbnb. And, you know, it’s interesting. China’s such a big market, and what they tend to do is, they tend to copy things that become popular in the West, but because it’s such a big market, their copycats sometimes become bigger than the companies that started in the West, right. I think DIDI is a good example. Doesn’t DIDI have more users than Uber?

Silvia: Uber, yes. It’s sort of interesting how, well, Uber spent a lot of money in China to get DIDI’s users, but because DIDI actually has really tight connections with the government, and their integrations with Chinese apps are really good… So, most Chinese users have WeChat, and for those who don’t know, WeChat is like a messaging app, sort of like Facebook Messenger or like the regular iMessage, but WeChat works as, basically, your credit card, you can integrate any apps, and I think because most Chinese folks use WeChat and have an integration with DIDI, they’ve been able to just increase the distribution and get more customers.

And then, I guess it’s the same case with Xiaozhu and Zhubaijia, the Airbnbs of China, where they actually have integrations with Chinese apps like we have.

Jasper: Right. It’s interesting. I’d never heard of this company, Xiaozhu. Had you heard of them?

Silvia: I’ve never heard of Xiaozhu, but I’ve actually heard of Zhubaijia.

Jasper: Okay. Is that another Airbnb in China?

Silvia: I guess those two are the biggest ones, but I feel like I’ve heard of a company called Tujia. I heard that that was one of the biggest ones, but who knows? I mean, they probably have different businesses that are sort of similar.

Jasper: Do you speak Chinese, by the way? Because I feel like you’re much better at pronouncing these companies than I am.

Silvia: My parents are from Guangzhou. They speak Cantonese and Mandarin, but I only speak Cantonese. My Mandarin is okay, but I can pronounce Chinese words easily. Well, I think.

Jasper: I noticed.

Some other interesting things… This is an article in the South China Morning Post, which is actually owned by Alibaba, and it kind of argues that, even though these companies kind of copied what Airbnb was doing, they’ve also managed to come up with some innovations that then Airbnb took from them. At least, that’s what they argue.

Silvia: Yeah. I think one of the ones that they mentioned was Airbnb trips, if I’m not wrong, and they were saying that they actually came out with that before, and then they joked around in the office, saying that, “Oh, now Silicon Valley’s actually behind us, and we’re actually the ones innovating.”

Jasper: Yeah, and they have part-time cleaning ladies that they train and they link them to hosts, which is also a service that Airbnb doesn’t provide. But, I think Airbnb had a pilot at some point in San Francisco where they were trying to link cleaning people with Airbnb hosts.

Silvia: Yeah. I think, for the market in China, it is so much easier to claim that, cleaning services in the Airbnbs of China, because the amount of money you pay for cleaning services is so much lower than what you pay here in San Francisco, or just the U.S. or Europe in general. So, I mean, for them to have just come up with all these cool features and services, it’s something that people want, but it’s hard to push in the U.S. market.

Jasper: Right. And another thing that they provide is, they have managers that actually go to people’s homes to meet the hosts and to help them, and to give them some advice on how to start their Airbnb business.

Silvia: Yeah. I mean, that’s actually amazing because, I would say, like if my parents were hosts, and they’re traditional Chinese, I think they still don’t have a really good understanding of the term ‘home-sharing’, and having someone that comes to your house and shares best practices or things that they need to do, I think it’s such a good way for people in the community to learn what it’s like to share a home with someone.

Jasper: Absolutely, yeah. I think it’s really good. But again, I don’t know if it’s possible to do that in the U.S. or Europe because of the cost.

Silvia: Right.

Jasper: But, I can totally see how, in China, especially outside the big cities, you’d probably need to offer some support to locals because, I think, over there, it’s not very used to having people stay at your home, like having strangers stay at your home.

Silvia: Totally.

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Awesome. Let’s move on to the next article.

So, last week, we were talking about a meeting that was going to take place at the Airbnb headquarters on Tuesday, where there was going to be a big announcement, and we were thinking, potentially, that it would have something to do with IPO, but it didn’t have anything to do with that, actually. So, what they did is, they invited a bunch of hosts from all around the world and they told them that they want to be more involved with the hosts. I think Brian Chesky’s going to do Facebook Live sessions, and he wants to be easier to contact, and he wants to be in touch with a number of hosts to sort of get their feedback on a more regular basis.

Silvia: Yeah. I was actually on Twitter, and then I saw that, one, he tweeted that picture with all the hosts, and two, I saw that he changed his Twitter bio to ‘Head of Community and CEO’. And I was like, “Huh, interesting.” And then, the article came out saying that they wanted more hosts to be involved, to come to Board meetings and share their insights so that the product and the company can improve.

So, this is something that, I think, they were definitely planning to do at some point, and it’s great because it allows them to connect with the hosts and have a better understanding of their needs.

Jasper: Right. And I think they also want to increase their, what they call, ‘host clubs’. This is something that we talked about a few weeks ago with Emery Lieberman. She’s part of the department that organizes these host clubs, and I think they have 114 now and they want to increase it to 1,000 by the end of 2018.

Silvia: Yeah, that’s amazing. Have you been to one?

Jasper: Actually, no, I don’t think I have been to one.

Silvia: Yeah. It would be interesting to know what it’s like to be in one. I’ve actually heard a few people that actually have been heavily involved in host clubs, and the reason why was because they actually live in communities where it’s not like San Francisco or Amsterdam where there are a bunch, like a lot, of hosts, but instead, they live in small cities and they just want to get to know their hosts so that they can learn from each other and talk about home-sharing, and the on-demand economy, and best practices.

Jasper: Right. And, you know, I think the reason why they want to expand this so much is that the hosts actually play a pretty important role in having a voice to local regulators.

Silvia: Yup.

Jasper: You know, the article states that more than 5,700 Airbnb hosts have attended a political event, and about 10,700 hosts have contacted an elected official regarding Airbnb. So, I think they recognize that to sort of mobilize the hosts is a very important aspect of trying to get favorable Airbnb regulation in different places.

Silvia: Yeah. I mean, this is huge because parts of their company are struggling because of regulations. So, pretty smart move, as you mentioned, to have folks that are locally involved right now with policies to fight for Airbnb rights, since, I mean, Airbnb already has literally an army of lawyers in Washington, D.C., fighting for all these laws, but now having more hosts involved and voicing their opinions will help a lot.

Jasper: Right. And this article’s actually put up on Skift, and it was put up by Deanna Ting, who was actually on the podcast last week. And so, it’s funny because we were discussing this, the meeting that was going to take place last week on Tuesday, and now I actually read the story that was put up by her.

By the way, if you want to stay updated on these news stories that we talk about, there’s also a Facebook group called ‘Airbnb News’, and I always post these news updates there. I also put them in my weekly newsletter, for which you can sign up at getpaidforyourpad.com.

Anyway, let’s move on to the next item, which is a party that took place. Now, there’s always these horror stories in the news, right, about Airbnb. If you look at Airbnb news, if you just Google ‘Airbnb news’, which is something that I do quite often, you know, it’s easily 80% of the news stories are focused on the few times that, actually, something terrible happens. And, usually, I don’t want to put too much attention on it because these stories already get so much news coverage that I don’t feel like I need to be emphasizing those stories, but this one, I felt, was pretty funny, so I wanted to discuss it. What do you think?

Silvia: Honestly, I saw it just somewhere on my Facebook feed and I’m like, “Oh, my goodness. I do want to feel so bad for the hosts, the owners of the house, and for the neighbors, but at the same time, the person that actually hosted the party, really, I mean, he crossed the line.” But, that’s something that can happen to anyone, and how do you prevent that? You know?

Jasper: Yeah. I mean, you can’t really prevent it. You know, you can do due diligence on your guests, but…

Silvia: Right.

Jasper: But, you know what? I mean, I have, I don’t know how many, positive reviews I have as an Airbnb guest – a lot – but, hey, I could rent somebody’s place and throw a party. But, this party, it was not just a party. The neighbors described it as, it sounded like they were close to one of the major nightclubs near their neighborhood. The people they invited, up to 200 partygoers. They hired a DJ. They hired a bouncer. I mean, they sold tickets. They literally turned this unit into a nightclub, which, I mean, this takes some organization, you know. This is not just renting an Airbnb and inviting some friends. This is like a proper organization behind it, almost.

And what I also found was funny was that it took until 4:30 a.m. before the police cleared the place, which is kind of like incredible, because if you have 200 people dancing, music, making noise, then you would think that it takes…

Silvia: They’d be so loud.

Jasper: Yeah, exactly. Like, you would expect that, within five minutes, people are calling the police.

Silvia: Yeah, that’s what I think. So, I mean, that’s impressive to me because, damn, like it took them the whole night to just call the police. Or, maybe, who knows? Maybe they did call the police, and the police, it took them time to come.

Jasper: Yeah. Well, one thing that explains it partly is that it says the police came at 3:00 a.m., but they didn’t want to go in because they were scared, basically. They felt, “Oh God, there’s so many people. We don’t want to get involved in some sort of fight or something.” So, they stood outside the apartment for about an hour and a half waiting for backup because it stated that, “Our officers could not enter safely and had to call police for assistance. Because of the numbers involved, police then had to be requested, and as a result of this action, the party closed,” and all that. So, I guess everyone was done partying before the police was even ready to end it.

Silvia: Yeah, yeah. Well, fortunately, nothing crazy happened, like no one destroyed the house, which is good. And, I mean, I think, unfortunately, things like this will happen. It’s funny for us, but unfortunately, not for the hosts, so I wonder if Airbnb will take any extra precautions. Who knows?

Jasper: Yeah, and Scotland Yard… This took place in England, by the way. Scotland Yard is kind of like the FBI or something, right, and they said that “no criminal offences were apparent and police officers merely maintained a presence until the party concluded.”

Airbnb has, by the way, banned this particular guest from the Airbnb website, which doesn’t come as a surprise.

Silvia: Yeah.

Jasper: The owner of the place, or the host, he wasn’t there. He was on holiday, so he couldn’t really do anything. I think he was in Vietnam. Oh, yeah. “The neighbor told the owner, who was in Vietnam, what was going on, and he told her to call the police. He felt terrible he couldn’t do anything.” And, you know, he’s been using Airbnb for a long time and it’s never been an issue.

And this took place in a tiny little community that’s called Islington. I think it’s near London.

Silvia: Yes, it’s near London.

Jasper: Anyway, yeah, these are still, it’s very rare. I think, still, that stuff like this happens, but you know, it does happen sometimes, and sometimes there’s pretty funny stories, like a couple weeks ago, when I interviewed Brian Chen who had a wedding at his Airbnb in northern California.

Silvia: Yeah. I mean, just, it’s all these funny stories, but it’s funny because you cannot really prevent what’s happening unless you’re there.

Jasper: Yeah, exactly. You never know what your guests will do at your place.

I think we’ve gone through all of the headlines. Is there anything else we need to discuss?

Silvia: I don’t think so. I think Airbnb is moving fast, even though it’s a huge company at this point, so I wouldn’t be surprised that in the next upcoming weeks we’ll get more news about either their acquisitions, more community work, and improving their relationships with local hosts, and so on.

Jasper: Right. Awesome. Well, let’s conclude this episode.

And, by the way, I’m in sunny Brazil right now, which is pretty awesome. I’m in Florianópolis, one of my favorite places in the world. It’s a beautiful island in the southeast of Brazil, it is, and it’s 25, 30 degrees here every day, sunshine. There’s a beautiful lake. There’s a beach.

Silvia: Good food?

Jasper: Yeah. I think I’ve probably gained at least two or three pounds since I got here. It’s very hard, in Brazil, to eat healthy and not go out and drink a little beer, basically, because that’s what Brazilians love doing, and I kind of enjoy that too. But, it’s great times.

Silvia: That’s awesome. Yeah, totally. Brazil is actually one of the… Whenever I think about Brazil, I’m like, “Oh! Everyone looks so happy in Brazil.” And it really makes you want to go again and again.

Jasper: I know. It’s pretty funny how, here, you know, there’s some problems in this country. I mean, right now, this country’s in crisis and everybody’s kind of complaining about corruption, and you know, it’s pretty tough for people to survive here because, for some reason, it’s pretty expensive. You know, if you look at how much people are making, I always wonder how they are able to afford things, but then, people here, they just kind of shrug it off. They’re just like, “Oh, if we have a problem, let’s just go to the beach and have a beer and forget about it.” It’s a very positive attitude that people have.

Silvia: Yeah. It’s something that I realized as I grew up in Peru, seeing so many people that, you know, compared to U.S. standards, they hardly don’t make that much, but then you look at them, and they just look happy. And that’s when you realize that, as long as you have family and friends and a good time, then that’s already enough.

Jasper: Absolutely. All right, well, with that piece of wisdom, we’ll conclude this episode. So, Silvia, thank you very much for joining and cohosting this episode with me today.

Silvia: Of course. Thank you so much. It’s been a blast, as always.

Jasper: And I think we’ll speak to each other again in about three or four weeks.

Silvia: Yup, awesome. Thank you.

Jasper: All right. Thanks, Silvia, and thanks, everybody, for listening. And, of course, next week on Thursday, there’ll be another episode in which we discuss the news of next week, so hopefully, we’ll see you then.