As the trend toward instant bookings continues, the Airbnb platform becomes more user-friendly for guests. But what does that mean for you as a host? The policies around cancellations can be confusing, and hosts who prefer the strict cancellation policy operate under a different set of rules.
Hostfully President David Jacoby joins Jasper this week to cover the pros and cons of using Instant Book as Airbnb steers its hosts toward that option. They also chat about the recent incidence of theft in Toronto and Airbnb’s response, as well as the latest news about Airbnb’s growth – which may not be as disruptive as people think!
Listen and learn about upcoming home-sharing trade shows and conferences on the west coast and the different types of insurance policies you may want to consider – if you are using platforms other than Airbnb. And if you didn’t catch Airbnb’s April Fool’s joke, David and Jasper will hook you up.
Article #1: Instant Booking Becomes the Big Metric for Airbnb and Vacation Rentals
- Airbnb instant booking availability has grown from 460,000 in the first quarter of 2016 to nearly 1M today
- Hosts who use Instant Book may cancel penalty-free three times
- All Booking.com listings are instantly bookable
- New Airbnb system currently being tested in Italy
- Service fees higher for hosts using strict cancellation policy
- Instant Book seeks to decrease discrimination on the platform
Article #2: Airbnb Fully Reimburses Man Who Had $21K Worth of Items Stolen by Guests
- An iPad and two iPhones were among the stolen items
- Airbnb does have insurance, but other platforms do not
- Select policies carefully, considering both liability and coverage for contents/damages
- Deliberate between replacing your current policy or adding a rider
Article #3: Airbnb’s Growth Soars: Senior Women are Fastest-Rising Demographic of Home-Sharing Hosts
- 151% growth in Nevada
- Despite growth, hospitality industry doing well
- Affordability of Airbnb creates additional travel demand
Article #4: Airbnb Might Not Be So Disruptive After All
- HomeAway is keeping up
- Many hosts list on multiple platforms
- Allowing short-term rentals can benefit landlords
- Hosts willing to pay extra
- Property well-maintained
- Less turnover
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Complete Transcript for Get Paid for Your Pad Episode 142
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: Before learning about Aviva IQ, I used to spend so much time managing my guest communications manually. Now, with Aviva IQ’s easy-to-use automated service, my workload has reduced by 80%. Did I mention it’s free? Automate your Airbnb messages now at www.avivaiq.com.
Welcome, everybody, from sunny Paris, another episode of Get Paid For Your Pad, co-hosted together with President of Hostfully, David Jacoby. David, how’s it going?
David: Hey, Jasper. What’s going on?
Jasper: It’s pretty sweet here in Paris, I have to say, but I had a slight panic today when I realized that the Airbnb that I’m staying at had no working Wi-Fi.
Jasper: Which is kind of challenging because, in order to record this podcast, Wi-Fi’s quite important. So, I’ve been basically walking around the city trying to find a good spot to record this podcast, and then, when I finally came to the conclusion that it wasn’t going to happen, my friend, Pierre, who’s the founder of Smartbnb, he happened to be in Paris, and he offered for me to record this podcast at his place. So, Pierre to the rescue!
David: All right, Pierre. Way to go!
So, Jasper, I assume your Airbnb listing said it had Wi-Fi, so what are you going to say in the review?
Jasper: Well, you know what? It’s not really the host’s fault because I’m actually staying with a friend, and she said that the listing has Wi-Fi, but I actually double-checked and it’s not mentioned there. So, I think she just assumed, and I kind of assumed that there would be Wi-Fi, too, because, you know, it’s Paris. But, anyway, I’m happy that Pierre provided his Wi-Fi capabilities to me. And, by the way, if you haven’t heard of Smartbnb, it’s a really cool app, so you can go and check it out.
But, let’s talk about the news. What do you think is most interesting?
David: Well, it seems like there’s a big push, as always, this year, in another article from T News on instant booking. Shall we start off with that?
Jasper: Yeah, let’s do it.
David: All right. So, it mentions how, in the first quarter of 2016, a year ago, Airbnb inventory was close to 2 million listings, of which about 460,000, so almost a quarter, were instantly bookable. And fast forward a year later, and it’s almost a million listings that are bookable by instant booking.
Jasper: Yeah, it’s interesting because, you know, I don’t know if you use instant booking yourself, but I was playing around with it because there was some uncertainty around what the policy is with regards to cancellations. And so, I played around with it a little bit and looked into the Support section of Airbnb, and I mean, they make it pretty hard to turn it off, first of all. Like, if you want to turn off instant booking, you get like three pop-ups saying, “Are you sure? You’re going to lose all these perks,” and, you know, they really don’t want you to turn it off. So, I’m not surprised that the number is growing a lot.
But, there was some slight confusion about the number of times that you are allowed to cancel, as an Airbnb instant-book host. So, on the website, it’s only mentioned that you are allowed to cancel an instant booking as a host if you don’t feel comfortable with the particular guest that has booked, but it doesn’t mention how often. And one of the members in my Facebook group, which is also called Get Paid For Your Pad, where we have about 600 members or so, which is open to new members if you want to join, but we had a discussion there, and one of the members said that you can only cancel three times. This is not mentioned on the Airbnb website, but I contacted Support and it turned out this is true. As a host, you can cancel three instant-book reservations. If you want to cancel thereafter, you have to contact Airbnb, and it’s up to Airbnb whether they’ll allow you to cancel or not.
David: Well, I’m not sure I understand that because if you need to cancel, you need to cancel. Does it have to do more about counting to your Superhost status, or if you need to cancel more than three times, they’ll just take off your listing and you’ll be blocked?
Jasper: Yeah, so let me clarify. What it means is that, I should have said, cancel penalty-free. So, if you use instant-booked, you get an instant booking, you’re allowed to cancel it three times without incurring any penalties, which means that you won’t lose your Superhost status, you don’t have to pay a fine. Because, normally, when you cancel a reservation, if you cancel it more than once every six months, you get a penalty. Airbnb charges you a fee to cancel a reservation as a host.
So, it’s a little complicated, but to kind of summarize it, as a host, if you use instant-booked, you can cancel a reservation three times penalty-free, and after that, you have to contact Airbnb, versus, if you don’t use instant-booked, then you can never cancel penalty-free. If you cancel one time, you automatically will not qualify for Superhost status within the next year, and you might get a penalty, too.
David: Yeah. There’s a big trend on all platforms, too, for instant booking. It talks about how booking.com, 100% of their properties are instant booking. So, if you’re going to list there, you need to be ready to take the reservation immediately.
And I think a lot of this, really, has to do with Expedia buying HomeAway. And when you go to Expedia, if you want a hotel, of course you can book instantly, and Expedia’s trying to incorporate HomeAway listings with their general searches so you can search for a hotel or search for a vacation rental and instant-book any of them when you want.
So, a lot has to do with that, so Airbnb is trying to keep up and increase their instant bookings that way. They’re putting in a priority in searches, you can filter by instant bookings. When there’s new listings that come on board, that’s kind of the default, having instant booking turned on. So, that’s just where the general trend is going, whether hosts want that or not.
Jasper: Yeah, and there’s some other signs that Airbnb is really making a push to make its platform more user-friendly because in Italy, right now, they’re testing a new system where the host gets charged a higher fee when using one of the stricter cancellation policies. So, normally, hosts get charged 3% for Airbnb bookings, but now, in Italy, if you use a moderate policy, you get charged 4%, and if you use a strict cancellation policy, you get charged 5%. So, you know, this is also another…
I don’t know if they’re going to roll it out worldwide, but I wouldn’t be surprised if they do because it’s the same type of push towards making the platform more user-friendly, by punishing hosts, by charging them more for the less user-friendly cancellation policies. They’re essentially trying to create a platform that’s more user-friendly.
David: More user-friendly for the guest, that is.
Jasper: That is, exactly.
David: But, possibly less user-friendly for the host and less appealing because many hosts only have one extra bedroom or one vacation rental, and they rely on those reservations. And unlike a hotel, if you get a last-minute cancellation, it’s not that big a deal for a hotel, but it is a big deal for hosts. So, we’ll see how that turns out.
Jasper: Well, there’s a lot of resistance from the host community in Italy. I’ve seen on forums, I’ve seen hosts posting stuff like, “Help the Italian hosts because Airbnb’s charging these higher fees.” And, yeah, I get it. I mean, I have some members in my Facebook group, too, who’ve been hosting for a very long time, and they use the strict policy because they get enough bookings anyway, so they really like this trip policy.
So, I can definitely see that there’ll be resistance from hosts, but at the same time, I think it’s, overall, I think it’s a good thing because the more friendly it is, Airbnb, for the users, as in the guests, the more guests, the more people will join the platform, which, eventually, is in the hosts’ interest, as well, you know.
David: One thing that’s also interesting with the instant booking, earlier in the year, and actually, it’s been an ongoing thing, Airbnb’s battle against discrimination, and being more inclusive, and making sure people can stay anywhere, one thing that they’re able to leverage is, in encouraging the instant booking, turning instant booking on, and that decreases any sort of discrimination that a host might have, if there’s instant booking. So, almost in the guise of ‘we are more inclusive and we want to put some regulations in place, or support in place, so that anyone can stay anywhere’, it’s another way for them to increase the amount of instant bookings that they have, which is a big focus of theirs.
Jasper: Right. You know, it’s actually funny because, coming back to my Wi-Fi problem of today, I’ve actually gone ahead and booked another Airbnb listing for tomorrow. Just in case I wouldn’t be able to get Wi-Fi, I figured, at least, I’ll have some Wi-Fi tomorrow. So, tomorrow, I have another Airbnb, and I’m only going to go there to work, basically. But, while I was searching for another Airbnb to stay at, I came across a listing that was very close to where I’m staying and it looked really nice, so I was about to book it, and then I read in the description, it said, “Female only – if you’re a man, please don’t book.”
Jasper: But, the instant booking feature was turned on. I didn’t book it because, I guess, you know, I’m a man, so if I’m not welcome, then I’ll book somewhere else, but I guess that’s not really in line with Airbnb’s policy.
David: Yeah, it’s an ongoing challenge to balance the hosts and who they feel safe with, while also, at the same time, being inclusive of everyone.
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All right, let’s move on to Airbnb’s April Fool’s joke. What did you think about that?
David: Yes, I thought it was pretty funny. It took me by surprise at first. It took me a second to realize.
So, what the joke was, was a humanless host. So, it basically shows a robot as the host, and as we hear all about Uber and their driverless cars, and things moving, getting people out of things, it’s not out of the realm of possibility. But then, you realize, as you start watching their video, it’s a pretty funny joke about having a robot, essentially, taking care of people, and going surfing with them, and going in the water, and going to parties. And it’s a fun video. Just search ‘humanless host Airbnb’ and it’ll pop up.
Jasper: Yeah, and initially, I figure that, you know, I probably would have fallen for it, but then, when you look at the website and you see this guy with this funny box on his head, then that kind of gives it away, right. I mean, it’s a little bit too ridiculous to be true.
David: Yes. I like, at the end, how they say, “Prefer old-fashioned human hospitality? Find your host.” And then, that takes you to their site.
Jasper: Yeah, exactly. But, yeah, it’s definitely pretty funny.
Let’s move on to another article. I’ll quickly mention this. It was a funny article in CBC News, Toronto, about a guy who had $21,000 worth of items stolen by guests.
Jasper: $21,000! And the first thing that comes to my mind when I read that is, you know, who has $21,000 worth of stuff in their house? I mean, I don’t even own $5,000 worth of stuff, probably. You know, I’m maybe a bit of an exception, but wow, I mean, that’s a lot of expensive stuff. Like, if you have that much expensive stuff, I’d imagine you’d lock it up or something, or store it somewhere, or at least put it in a closet that’s locked, or something like that. But, this host had all the money reimbursed by Airbnb.
But, what do you think about that? Among stolen items were iPads…
David: That’s good to hear. Yeah, did they give some examples? Go on.
Jasper: Yeah, yeah – iPads, iPhones… I mean, if I rent my room on Airbnb, which, you know, I rent out my house, but I’m never there… So, I mean, you leave your iPad and two iPhones? It seems a bit strange to me.
David: Yes, and this is actually some stuff that I need to be dealing with, on a personal note, because, exciting news, I just got my first HomeAway reservation. I decided to not put all my eggs in one basket on Airbnb and try to diversify a little bit. And one thing that’s good about Airbnb is because of their insurance that covers you. And I’ve heard different stories. I’ve heard some sob stories about how their homes got ruined and Airbnb didn’t fully cover things, so it’s great to hear this article, that Airbnb is actually picking up the check of the $21,000.
But, Airbnb’s unique that way, as a listing platform, by covering you. Most other listing platforms, they’re just a platform, and you, as a business owner, you’re responsible to have coverage. And there’s really two types of coverages that you need to be looking out for. One is liability, so if someone trips and falls and wants to sue you because of that. And then, the other, of course, is damage to the home itself, if they break your TV or break your refrigerator, or, you know, break your home. So, you need to be careful when you’re looking at insurance policies about both of them.
Airbnb, they started off, originally, just covering damage, and there was the famous incident a few years ago, where a guy complained about their home being destroyed and Airbnb did nothing. And Brian Chesky had a good hard look in the mirror about what kind of company he wants to have and what kind of values he wants to have, and he started offering that insurance, added that on. And, originally, that was just for damage, and since then, they’ve also added liability, as well, so that’s pretty cool.
Additionally, there’s two types of insurances, not just the liability and the damage. But, one is just a rider, where as a homeowner or renter, you already have your normal insurance, and this is specifically on top of it for short-term rental. And then, there’s other kinds of insurance where it completely replaces the current homeowner’s insurance you have, and you get a new total homeowner’s insurance policy that also has short-term rentals. So, there’s a lot of moving parts that you need to look into if you list beyond Airbnb.
Some companies out there, CBIZ was the most famous one, and they partnered with HomeAway, and that really replaces your whole home insurance policy. And then, there’s some other ones out there, like Comet Insurance, and then Proper, and Propel, (Proper, Propel – two different policies), and a bunch more keep coming up now. It’s getting to be a pretty popular industry.
Jasper: What kind of premium are you paying for those types of insurances?
David: It really ranges. So, there’s some where you only need to pay like $35 a month, and it’s really kind of lightweight, and it’s on top of your already existing homeowner’s insurance. And then, there’s other ones that I mentioned, that replace your whole policy, and that’s like a few thousand bucks.
Jasper: Okay. And wait, that’s per month?
David: No, that’s per year.
Jasper: Okay, right, yeah. I was going to say, a couple thousand dollars per month sounds a bit pricey.
David: Right, yes.
Jasper: All right, that’s good information. That’s good to know.
There’s two more articles that I want to mention, and they’re kind of a little bit contradictionary, I think. Well, first of all, there’s an article in the Vegas…
David: Are you making up words again, there?
Jasper: Wait, did I make up a word?
David: I don’t know – contradictionary?
Jasper: Isn’t that a word?
Jasper: Oh, okay. Ha ha! Well, thanks for the language lesson. Contra… No, I already forgot. I’m not going to say it anymore.
But, anyway, in the VEGAS INC, there’s an article that talks about the growth of Airbnb, and talks about how, in Nevada in 2016, there was an increase of 151% year-on-year growth of the total amount of visitors, which was 341,000 in 2016. And they mention some other states, as well, and across the board, the percentages are all somewhere around the 100% to 150% mark, which basically, is more than double. So, it means that Airbnb is still growing very fast.
But then, there’s another article that I found on barrons.com. It’s a very short article, but it talks about how Airbnb might not be so disruptive as a lot of people think. They say that HomeAway, the site that you’ve just started listing on, for example, hasn’t really had a lot of trouble keeping up with their amount of listings. So, it seems like Airbnb’s not really stealing any listings away from HomeAway or some of the other platforms, such as booking.com, as well.
So, which is kind of interesting, because if Airbnb’s growing that quickly and the other websites aren’t really seeing any of their members leave, then you wonder where all the Airbnb bookings are coming from, because the hotel industries, worldwide, are not really seeing any negative effects, I think. I’ve looked into this before. So, it seems like Airbnb’s kind of creating some extra travel demand.
David: Yes. I think they’re opening up a bigger piece of the pie for travel, in general, where people who hadn’t thought about traveling, now they think they can afford to. Previously, it was too expensive, and they’re specifically going to Airbnb first.
Also, many of the listings that were originally on HomeAway and other platforms that were around before Airbnb, they’re starting to duplicate the listing, and listing on Airbnb and all the platforms out there, taking a page out of your friend, Matt Landau, who I know was on your show before. He talks about individuals having their own business and really trying to be platform-agnostic, and listing on multiple platforms and listing on their own website. So, you see multiple listings, the same listing on multiple platforms, pretty commonly.
I think, also, one thing with this increase, and as they keep moving forward, yeah, you hear talk about them working more with property managers and with real estate development companies, where more and more units that are being made are specifically Airbnb friendly and short-term rental friendly, and this is a way for certain new units to actually charge higher rents to the people that they’re trying to get by saying, “We are Airbnb friendly, so when you travel, you can make money by renting out your place.”
So, there was a backlash on one place, where many apartment buildings don’t want Airbnb, but I think it’s starting to swing the other way now, too, so more forward-thinking property managers are being Airbnb friendly and trying to increase those bookings.
Jasper: Right. Yeah, that’s interesting.
I remember I recorded an episode with Diego Coria from Buenos Aires. It was one of the first episodes. You know, it must have been like over two years ago, but he was one of the first people that I heard of who was actively seeking landlords and trying to convince them to allow him to do Airbnb. And one of the things, one of the carrots that he would put in front of the landlords was, “Hey, I’m happy to pay a little bit extra for your place if you’ll allow me to rent it out on Airbnb.”
And, you know, I think it’s taken some time for landlords and real estate companies to see the value of Airbnb, but I think it makes total sense because not only can you charge more for your apartment if you allow Airbnb, but also, you know, as a host, it’s very important to keep your apartment very clean and very well maintained, right, in order to run a successful Airbnb business. So, that’s also in the interest of the landlord, I would think.
David: Absolutely. Exactly right.
I know a landlord, here in San Francisco actually, who’s very much involved in all the short-term rental politics here, and says that they like their tenants renting out on Airbnb because, exactly as you said, people who rent it out keep their place a lot cleaner and it’s in a lot better shape. It’s cleaned more regularly, things are fixed quickly. And, also, he likes the stability. He doesn’t like having turnover in his units, and this helps people afford to stay in their home.
Jasper: Yeah, that makes a lot of sense. Awesome.
Well, there’s one more thing I want to mention before we quit this episode. I’ve been working, in the last few weeks. I found this really cool app called Outgrow, and you can use it to create quizzes and calculators, so I figured I’d give it a go, and I created this thing called Airbnb Listing Check, where you can take a three-minute test. It’s only nine questions, and you get some questions, and you just answer them, and then you get a little report with some recommendations on how you could potentially make some improvements to your Airbnb listing. I believe you actually took it, David, didn’t you?
David: I love it. It was very helpful, got a few good tips, and also, thanks for the plug on Hostfully there. “Everyone definitely needs to have a beautiful digital guidebook to their guests,” so thanks for including that as part of your questions.
Jasper: Oh, yeah, absolutely, for sure.
So, yeah, if you’re interested in taking this test, I think it’s pretty fun. It takes a few minutes, and you’ll probably learn a thing or two. Just go to getpaidforyourpad.com. I’ve put it on the front page, and I’ve had about 50 people take it so far, and most of the feedback was very positive. So, I’m pretty excited to see what other people think, and have more people take the test, and please, go ahead and respond to my email. You’ll get an email with the results, and I’m happy to get some feedback from people, to know what people think, and also, to improve it.
So, with that, I think we’ve come to the end of this episode, David.
David: All right. It’s been great, Jasper.
Jasper: Unless you have something really important that you want to share?
David: I don’t think so. I’ll save it for next time.
Jasper: Okay. What about, you told me, in May, there’s a fair going on?
David: Ah! Oh, sure. It’s local to the Bay area, but we have the Home Sharers Democratic Club. We are an official chapter of the San Francisco Democratic Party, chartered organization. We are having a trade fair on May 18th. So, we already have about 15 vendors confirmed, and this is really a benefit for hosts, just to learn about all the tools out there to help them be better hosts, ranging from Aviva IQ and their messaging platform, to Party Squasher, to, of course, bookings platforms. Airbnb, they’re going to sponsor food, but HomeAway is also a big sponsor, as well. It was important that we have multiple platforms. We’re talking to some other platforms, too, that’ll be there.
And not only here for May 18th in San Francisco, but this seems pretty cool that it’s popping up in a few different places. I think, this month in April, there’s an event in Portland, where they’re having not just a trade fair, but like a mini one-day conference with some break-out sessions, some seminars, some best practices, as well. And I know the folks at Lastra, down in Southern California, in the Los Angeles area, they’re having a trade fair type event coming up, too.
So, it’s pretty cool to see all these different cities not just relying on the Airbnb Open, especially for those who haven’t heard, Airbnb Open is not happening this year in 2017. They sent a note out saying they’re going to resume in 2018. So, all these little communities are kind of getting together and getting vendors together to really support each other and learn how to be better hosts.
Jasper: Absolutely. That’s very cool. And if I can make it, I’ll definitely be there in May, if I don’t have other important things to do.
David: We can do a live show from the event. That would be great, Jasper.
Jasper: All right, David. It was a pleasure, as always, to host this episode with you, and I’ll look forward to the next one.
David: All right. Thanks, Jasper.
Jasper: And for all the listeners, thanks for listening, and see you next time. Bye-bye.