Airbnb is learning the art of the deal, and the homesharing platform is all over the news this week for efforts to collaborate with local governments in Latin America, Japanese luxury resorts, and the city of San Francisco.
Jasper is chatting about these partnerships with none other than Hostfully VP of Strategic Partnerships, Nicole Prentice Williams. They explore Airbnb’s proactive approach to compromise with city governments in the growing Latin American market, their deal with Japanese luxury resorts to help boost occupancy, and the $15M agreement to expand their ‘urban campus’ in San Francisco.
They also cover the story of a first-time Airbnb user who was scammed by a phony listing in Amsterdam as well as the details of the registration process for hosts in San Francisco. Listen in to learn about these headlines – and Jasper’s challenging experiences as an Airbnb guest in Moscow and St. Petersburg!
Article #1: Brit Tourist Scammed Out of £915 for a Holiday Getaway Advertised Through Airbnb in Amsterdam
- Scammer lured first-time Airbnb user with phony listing
- Guest provided email address, received email with payment info
- Sent payment, then learned that listing was fraudulent
- Airbnb typically blocks contact information
- Perhaps email address was provided in screen shot undetected by filter
Article #2: Airbnb Looks to Latin America, Now its Fastest-Growing Market
- Using different approach – collaborating with local governments
- Arrangement with Mexico City to pay 3% tax (consistent with hotels)
- Smart to compromise before resistance, costly litigation
- In talks with Buenos Aires and Sao Paulo as well
- Will be in competition with Hotel Urbano
- Expanding staff and opening offices in Latin America as well
Article #3: Airbnb to Launch Luxury Reservation Service in Japan
- Focus on traditional inns, specialty hotels (i.e.: hot springs resorts)
- Hotels pay 10% commission to Airbnb and Evolable Asia
- Hope to boost low occupancy rates (38% at traditional inns, 57% at resort hotels in 2016)
- Aligns with Experiences initiative
- Need to remain transparent so guests realize booking hotel room
Article #4: Airbnb in Talks for San Francisco Expansion as it Snaps Up Space for Urban Campus
- Leasing office space one block away from headquarters
- $15M expansion will dominate area
- Plan to double the number of employees to 3,000
Article #5: How Does Airbnb’s Deal with SF Work?
- Interview-style article
- Agreement requires hosts to register, can be done through site (Airbnb or HomeAway)
- Registration deadline is September 6, 2017
- Listings without registration number will be blocked
- Neighbors will receive notice of short-term rentals within 300 feet
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Complete Transcript for Get Paid for Your Pad Episode 154
Welcome to Get Paid for your Pad, a 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.
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Jasper: Welcome everybody to another episode of Get Paid For Your Pad. Today, I am hosting this episode with Nicole Prentice Williams, who is VP of Strategic Partnerships at Hostfully. Nicole, welcome to the show.
Nicole: Thanks Jasper, It’s great to be back. I always enjoy doing these chats with you.
Jasper: How is everything going?
Nicole: Good, just was at the Vacation Rental Manager’s Association Conference for the western region last week in southern California and it was a good turn out. Got to hear a lot of industry news and talk to a lot of vacation rental managers west of the Mississippi to the Pacific, so it was good.
Jasper: Awesome. Any interesting takeaways or highlights?
Nicole: Um, just a lot of vacation rental mangers that are interested in new technology and how to, you know, give a better experience for their guest. It’s really about providing that memorable experience so they want to come back and they want to tell other people about it.
Jasper: I feel like there’s more and more vacation rental management companies popping up everywhere. I get a lot of emails from vacation rental management companies so I feel like there might be a little bit more shift or trend going on where more and more hosts are using these managers or even automated systems to manage their Airbnb listings.
Nicole: Yeah, it’s definitely a booming business. You see a lot of realtors who traditionally sell properties and now they are even moving into the industry as well, doing a lot of vacation rentals for owners who may not end up wanting to sell. Yeah, it seems like it’s growing for sure.
Jasper: Well I’m now in Moscow and I’m actually staying at my third Airbnb in Russia. This is my first ever visit to this country. I stayed in an Airbnb in Moscow last week and I was in St. Petersburg over the last few days and I stayed at an Airbnb there. And now I’m back in Moscow and you know, it’s interesting because every single check in so far has been a little bit challenging with regards to the communication but with regards to also finding the place. It’s interesting to use Airbnb so much as a guest because it’s really good to be in the shoes of the guest because they really see like what kind of issues you run into when the host is not, you know, communicating well or providing enough communication, like for example, my check-in here. I arrived in a taxi. I only had a bill of 5,000 Rubles and I had to pay 1,00 and the taxi driver didn’t have any change. This is the first time that I’m not suing Uber and I immediately feel punished for it. So I’m definitely going back to Uber. Fortunately, they do have Uber here in Moscow, but I took a normal taxi for a change. And so I had to drive around to find a place where we can change this 5,000 dollar bill. Finally, I decided to walk into a shop and buy a bottle of wine and use the change to pay the taxi driver. But in any case, while this was happening, I was communicating with my host and she kept telling me that she was waiting for me and I was late. So when I finally arrived, the building that I’m staying in is a really big building. There’s all these different entrances and so the only thing I had was the address really. I saw the sign of the address number and so I just walked up to the building and the first gate that I saw, I just walked in and basically got completely lost and so I called the host. It took a while, but finally she found me and she was kind of a little bit, I’d say, slightly annoyed.
Nicole: Oh no.
Jasper: Because she told me like, I told you to be at the front entrance and like, what are you doing here? And I was like, well, I mean, it’s not very clear where the front entrance is to be honest. And it shows that as a host, when you’ve been living at your place, you’re super familiar, it may seem really, really logical and makes a lot of sense and it may seem very easy to find everything because you’re so used to it, but then for somebody who’s never really been in the area, even, you know, it can be a completely different perspective. So these experiences here have definitely solidified sort of the idea as the host, you want to provide much more information that you think the guest might think. I’m thinking like pictures of the entrance, a little Google maps, uh..
Nicole: Did you tell her about Hostfully guidebooks?
Nicole: I hope.
Jasper: Of course I did.
Nicole: She could have had all those images right there on how to check in. Oh, well anyway. We can send her the information.
Jasper: I definitely think these guidebooks in general are very essential, because I think, I‘m getting very little information. I’m getting literally a message with the address and that’s pretty much it. Well, anyways, in the end, it was all find and it’s a nice apartment. So yeah, I’m not complaining.
Nicole: We need to help her out though, Jasper, really.
Jasper: I know, right? There’s still room for education for Airbnb hosts.
Nicole: Let’s send her the link right after this.
Jasper: But, let’s talk about what’s been going on in the world of Airbnb. Let’s start with something that happened in actually, my home city of Amsterdam. I’ve seen these stories start up quite often, where a tourist gets scammed by a phony Airbnb listing, an Airbnb listing that doesn’t really exist. Well, the listing exists, but the actual house may or may not exist. See what happens is the tourist sends a message on the Airbnb platform to make an inquiry for a place to say. The person somehow gets the guest to provide them with an email address. And then they send a fake email with payment information and so the guest pays, but there’s no actual booking on the Airbnb site, so the guest is scammed out of the money and doesn’t have a place to say.
Jasper: Now, these stories, you see them quite often and I often wonder, how is this possible because Airbnb filters in their messaging system and even on their listing site, there’s a filter that hides any sort of contact information. I mean, I get a lot of email from hosts and they ask me to look at their listing so I Look at several listings every single day and I see a lot of listings that have this hidden content thing where the host is trying to provide some information, and so I always let them know, I say hey, I don’t know what you’re trying to display there, but it’s not showing. And then it always turns out, it’s not actually contact details, it’s something else. So Airbnb uses a pretty broad filter to make sure that contact information isn’t displayed.
Nicole: Yeah, I’ve come across that myself. It’s very difficult, especially with people sometimes they’ll write out their phone number all in letters, spelling out the numbers because they’re just trying to get you to call them. It’s like, we’re communicating here. Ha, this is where we communicate. It’s a safety net and it’s great that they have that. I’m wondering if this contact information for this scammer was in a screenshot, somewhere within the listing and maybe it wasn’t detected because it was in a picture or something. I don’t know it’ll be interesting. I think this was the son that got this story. I think if they would’ve included the picture, but I guess they couldn’t at that point because the listing was down.
Jasper: Yeah, that’s definitely possible what you’re saying. People could provide the contact information in a picture.
Jasper: And put it in the photo section.
Nicole: Yeah. I think it was referred to as an advertisement, somewhere within this article so that is what was triggered in my mind. Maybe there was an image. Airbnb spokesman said they shouldn’t have had this advertisement on the website in the first place. So I was thinking, oh advertisement. That’s how she described it. Maybe it was an image that had an mail address or a phone number, however she contacted them.
Jasper: But it’s still interesting because even if you put a picture in your listing with your contact details, you’re still relying on the guest to contact you.
Nicole: In the article, it says she received an email with a confirmation. So she must have somehow provided her address to the host without actually making a booking.
Jasper: The only way then that this can happen is that the host has maybe a picture in their photo section and then they message on the Airbnb system, hey contact me. Look at the picture for the information and then the girl sends the email and then they have an email address to respond to.
Nicole: Right. She says I was reading this description of the place and it said to book and then send a query through this email address, so she must have seen an email address somewhere in that description. It sounds like they never even got to the messaging part. Maybe she was a first-time user of Airbnb and wasn’t aware of the messaging at all. Perhaps she thought.. Who knows. I’m just guessing. She’s twenty years old. She’s reading through the description for the property and she sees somewhere in there, book through this email address and then that’s how she proceeds.
Jasper: Yeah, I still find it strange, that the contact information… If she read it in the description, then it should have been blacked out.
Jasper: But in any case.
Nicole: Hopefully they take more safeguards to do that if that was the case. But yea, it’s very puzzling. How did she get that email address?
Jasper: Yeah, it definitely is. You see these stories quite often. And every time I see a story like this, I hope that they put like a screenshot of how the information was displayed but they never really provide that information.
Nicole: Yeah, I guess at the time, they’re not thinking that they’re going to be scammed.
Jasper: Haha, yeah exactly. Well, let’s move onto another topic. Let’s talk about Latin America. There’s an article in the New Zealand Herald. Airbnb’s fastest market is actually Latin America right now. And they are going to take a different approach when it comes to collaborating with the local governments, which is an interesting switch that they’re making. Up until now basically their approach as just been, we’re facilitating this home-sharing business and only if we’re getting sued, getting a lot of resistance, then we’ll strike a deal with local authorities to come to some sort of compromise. But now they’re going to be more proactive about reaching these types of compromises before there’s actually any big resistance and court cases, etc. For example, in Mexico, they’re making arrangement with local authorities that they’re going to collect 3% lodging tax and this is also what hotels are paying as well. So I think its’ an interesting change of approach and they’re panning to approach it this way in other countries as well in South America.
Nicole: Yea smart of them. I guess they’ve learned their lessons. They’ve pretty much faced resistance and some type of fight, it seems like wherever they are in every big city. So it’s pretty smart to just start the relationship off on a different foot and say hey let’s go ahead and collect that tax and give it to the government. Yeah, they’re learning from their lessons.
Jasper: Yeah and it’s smart also because once you start giving money to a government, they’re going to spend it, and now the government is already used to getting that money, so they’ll probably be more willing to cooperate.
Nicole: Absolutely, that’s very smart.
Jasper: Otherwise, they have to make some cuts in their budgets and that’s not something that governments like to do.
Nicole: Right, and Airbnb probably doesn’t want to have to spend anymore money on attorneys. They’ve probably added up what they’ve already been spending, and they’re like, it’s inevitable that we would have to do this again. So let’s just go ahead and start with a great relationship here and do it how we worked it out with other cities, paying the tax.
Jasper: Yeah, so really I think it’s a win-win situation. And Chris Lehane, he’s the head of policy for Airbnb, said, that Airbnb plans to take this more friendly approach throughout Latin America. They’re currently discussing agreements similar to the one in Mexico City with governments of Buenos Aires and San Paulo, and Argentina and Brazil as well. I think it’s a good approach.
Nicole: Yeah, and you know, I’m wondering, you know the article talked about Airbnb’s competition down there – Hotel Airbon, which I guess, is another way to book accommodations and maybe they’re already paying the government as well. I didn’t see that in the article, but if they are, it would make sense for Airbnb to follow suit on what’s already built in down there.
Jasper: Yeah, absolutely and they’re also planning to expand their staff a lot. They’re expecting to double staff in South America by the end of the year, open offices in Argentina, Brazil, and Mexico. So there’s going to be a lot of employment opportunities, so if anyone wants to work for Airbnb, it’s Argentina, Brazil, and Mexico where the opportunity is.
Nicole: Right, yeah, good for them.
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Jasper: Um, let’s talk about another topic. It’s a topic you liked, you told me, it’s about Japan. Their Airbnb’s going into a luxury website for traditional inns and specialty hotels.
Nicole: Yeah, I like this. I thought it fell in line with Airbnb’s experiences so it seems to make sense and Japan seems to need some help because they’ve had lower occupancy rates, it seems, than other Asian countries. So the inns they’re talking about are like hot spring resorts, that they said are a big draw for travelers. That sounds like a great experience that Airbnb could sell. It sounds like a great platform. I guess they’re going to be sharing revenue with that luxury booking site. It sounds like they’re going to split a 10% fee, Airbnb, and the booking site, and then the rest goes to the luxury hotel.
Jasper: Right. It’s an interesting concept. So there’s basically going to be hotel rooms on Airbnb and so Airbnb allows them to put their rooms on Airbnb and they take a cut. It’s interesting that they’re doing it this way, because I know that a lot of people who use Airbnb sometimes, they think that they’re booking a room in a house with a local person, but then they’re actually booking an apartment from a big company and it’s not really the experience that they’re expecting. I’m not sure that it’s really the right direction for Airbnb to go, to put more sort of professional type of accommodations on their website.
Nicole: Yeah, I hear what you’re saying there for sure. Airbnb seems to, and this goes back to the open and Chick Connolly, about making sure that they’re transparent. So, you know, maybe it will look different. Maybe something that’s not an in-house experience. They might give it a different flavour or something. I think that would be nice. I think that’s really what they try to do, or at least that’s what they say they try to do. Is to give guests, and they push that on all of the hosts, to really be true about their properties so that the expectations are set correctly for the person booking.
Jasper: Yeah, you’re sort of right about these lower occupancy rates that these traditional inns are facing. The article’s actually stating that while for full service hotels, the average room occupancy rate was about 80% but for these more traditional inns and resort hotels, they’re like more around the 40 to 60 percent mark. So that’s quite a big difference.
Nicole: Yeah, sounds like they need some help. But it sounds like, hot spring resort, I’m in, ‘m all in. I’m going to one this summer actually. But not in Asia, I’m going in Central America.
Jasper: Right, yeah, it’s nice, those hot springs. I actually went to one near Taipei at the end of last year.
Nicole: Oh cool, was it wonderful?
Jasper: Uh, yeah, sitting in a hot tub of warm water is always quite a nice experience, I’d say.
Nicole: With a nice view I imagine.
Jasper: Well it wasn’t as nice as I envisioned it. I imagined like a hot spring to be in the middle of nature somewhere, but this was kind of in the middle of the city. It was this little park, right next to, and they called it a resort, but it kind of looked like a hotel, part of a very big building. I definitely envisioned it to be a little bit different. But the hot water was coming out of the ground there and they pump it into your hotel room and then you sit in it. But anyway, it’s still nice to sit in a hot tub.
Nicole: There you go. Well, I’m going to one in Costa Rica so I’ve already seen pictures. The views sound a little bit better than that. I’ll have to send you the link.
Jasper: I’ll make sure to look at pictures next time as well before I book some thing. Anyway, let’s touch on one more topic. Airbnb is in talks in San Francisco to expand their offices teams, and to snap up space for urban campus.
Nicole: Yeah, it seems like they’ve let their intentions be known that they want to dominate this area where they have set up shop in San Francisco, so they’re trying to snap up as much space as they can. But it sounds like they’re going to double the number of employees they can have in San Francisco. So more job opportunity everybody. If you want to move to San Francisco, if you’re in San Francisco, to work at Airbnb.
Jasper: Yeah and currently about half of its 3,00 employees around the world are in San Francisco. With this new office space, it would allow Airbnb to basically double their number of employees to 3,000, so that means there would be like 1500 new jobs. I’m not sure if that’s going to be good for the affordability of housing in San Francisco.
Nicole: Yeah, well, maybe they’ll be keeping in the plan to help affordable housing. But, yeah, it’s good news or maybe they’ll all just be Airbnb guests, all of these employees, who knows. But it’s a $15 million dollar deal.
Jasper: Maybe they’ll sleep in the offices.
Nicole: Yeah, exactly. There you go. And it’s a block away from where their headquarters is. But $15 million dollars is the price tag they’re putting on this expansion.
Jasper: $15 million dollars is a lot of money. Before we go…
Nicole: Yeah, space is expensive in San Francisco.
Jasper: Yeah, tell me about it. I’m always happy I can crash for free with David.
Jasper: Haha. So the last thing I want to mention is there’s an article, you know, we talked about this a couple weeks ago, about the new system that is in place to facilitate the registration of hosts in San Francisco. I just wanted to mention it because it’s an interview style article, which answers a lot of questions people may have about these new regulations. So, it goes into all the different details it’s an article in the San Francisco Chronicle. It’s good information about how it works and it’s really cool that you can register on Airbnb and on Homeaway. It’s not just a deal for Airbnb, but also for Homeaway. All the hosts in San Francisco have to register at September 6th at the latest. They’ll get their registration numbers on their listing pages. And if you don’t do that, then Airbnb, and Homeaway as well, they’re going to block your listing. Everybody really has to go ahead and register.
Nicole: Yeah, the questions are answered by the city’s deputy city attorney, the director of the San Francisco Office of Short-Term Rentals and a spokesperson for Airbnb, so very educated, very in-the-know individuals who are answering the questions. I assume you’re going to put the link up. So might be a rule of thumb for New York City to follow as well and other cities, so this is, definitely a good source for information.
Jasper: And one more interesting fact I saw in this article is that, if you live in this residential neighborhood, you receive notice of any property within 300 feet of you that’s applied to be a short-term rental.
Nicole: Yeah, I don’t know. I’m not sure if I’m in agreement with that part.
Jasper: You think that might be one step too far.
Nicole: Well, yeah, exactly. It really is. Being an Airbnb host myself, I don’t need.. What did you say the radius was?
Jasper: 300 feet
Nicole: Well, okay, I guess everybody within 300 feet actually knows about our house being a rental.
Jasper: The thing is, it almost frames Airbnb guests as like dangerous people, like you need to watch out for them or something. Like if somebody has an Airbnb rental in your neighbourhood, we’ll let you know. It’s like sex offenders, right?
Nicole: Right, exactly. That’s very strange to me.
Jasper: That’s the frustration that people are going to have I think. If I get a letter, like, oh. Lets just say you’ve never heard of Airbnb and you’re just living somewhere. And you get a letter in the mail saying, hey, um, we wanted to let you know that within a 300 feet radius, somebody has opened up an Airbnb and you’ll be like, huh, like is this something I need to be worried about?
Nicole: It brings a spotlight on that property and on that homeowner and it’s going to cause problems. I’m not sure if they were forced to agree with that. That’s something I would definitely, if I were Airbnb, I would try and negotiate out or try and make sure it’s not in any more negotiations going forward with any other cities. That’s horrible.
Jasper: Yeah I agree. All right, Nicole, thanks a lot for joining. And I’ll speak to you again in the next couple of weeks.
Nicole: Thanks so much for having me Jasper.
Jasper: Absolutely. It was a pleasure. And for all of the listeners, thank you for listening. And we’ll see you next time.