Airbnb added some unusual listings that made news this week, including an ad agency that converted its office into a ‘spacious penthouse suite’ and the entire Swedish countryside. Yes, you read that right – the entire Swedish countryside.
Jasper is joined by Hostfully CEO Margot Lee Schmorak to discuss those creative listings, both ad campaigns designed to draw attention to the best qualities of 1) The Swedish landscape, and 2) OH Partners (who are looking to fill Airbnb’s opening for an ad agency).
They also review HomeAway’s lawsuit against the city of Chicago, discussing the potential for an alliance between Expedia and Airbnb in the fight against homesharing regulations, and an article that takes a comprehensive look at the homesharing ecosystem, outlining Airbnb’s evolution and how hotels are innovating to keep up. Listen in to learn why CNBC named Airbnb the #1 Disruptor of 2017!
Article #1: It’s Been a Trip to $31 Billion, Now Airbnb Wants to Remake the Entire Travel Industry
- Overview of homesharing ecosystem
- Comparison between Airbnb and hotel industry
- Airbnb named as top 2017 CNBC Disruptor
- Airbnb’s intention to enter flight-booking space
- Difficulty of scaling Airbnb Experiences
- Hotel industry playing catch-up with innovative initiatives (e.g.: high tech, shipping containers)
Article #2: Sweden Listed Its Entire Countryside on Airbnb
- Brand partnership between Airbnb and Visit Sweden
- Intent to boost tourism, show variety of landscape
Article #3: This Agency Turned Its Office into a Crazy Airbnb That Got Jonathan Mildenhall’s Attention
- OH Partners converted office space into ‘spacious Phoenix penthouse suite’
- Hosted 24-hour livestream to engage Airbnb CMO
- Creative way to apply for ad agency opening
Article #4: HomeAway Lawsuit Alleges Chicago’s ‘Deeply Flawed’ Home-Sharing Law is Unconstitutional
- Alleges fines based on categories ‘that cannot be meaningfully distinguished from one another’
- Violates First, Fourth and 14th amendments
- Expedia’s first fight in courts
- Potential coalition between Airbnb and HomeAway
Article #1: cnbc.com/2017/05/15/its-been-a-fantastic-voyage-to-31-billion-what-airbnbs-next-big-trip-isnt-booked.html
Article #2: fortune.com/2017/05/22/sweden-countryside-airbnb-rental
Article #3: adweek.com/agencies/this-agency-turned-its-office-into-a-crazy-airbnb-that-got-jonathan-mildenhalls-attention
Article #4: chicagotribune.com/business/ct-homeaway-sues-chicago-0523-biz-20170522-story.html
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Complete Transcript for Get Paid for Your Pad Episode 156
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.
Commercial: [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.]
Jasper: Welcome everybody! Another new episode of Get Paid for your Pad! And today my co-host is Margot! And she's of course…
Margot: Hello, Jasper.
Jasper: Hello Margot I was just going to introduce you!
Margot: Sorry, I jumped the gun.
Jasper: Margot, of course, is the CEO of Hostfully. Margot, how's it going?
Margot: Good. It's pretty late here but I'm excited to be talking to you. We had to find a common time to talk being, like, on very different parts of the planet. It's kind of cool.
Jasper: Yeah it's one of the challenges that comes with having a location-independent lifestyle is that the time zones keep changing and specifically Asia versus California is the worst time zone difference that there is. It's a very hard schedule; it's really very hard to schedule things and most of the people I talk to are in California and so it's really difficult. It's 14 hours ahead, so it's either like I have to be really late or I have to be really early. In this case, you are late, right? What is it, 10pm 10:30 pm?
Margot: It's 10:20 here, yeah.
Jasper: And for me it's just about lunch time now. So anyway I'm glad we found a time to chat, although it took a few, different, iterations to find the right time. But um, anyway I'm here in Bangkok, just arrived a few days ago from Moscow, and I'm actually moving to Taipei tomorrow and then I'll be there for a month. So right now I'm just doing a quick visit to Bangkok meeting up with some friends, and then I'll be in Taipei for a month. So then I'll be a little bit more like settled down.
Margot: Yeah. Where are you staying when you go to Taipei?
Jasper: I'm obviously staying in an Airbnb.
Jasper: I'm staying in a really cool Airbnb actually. Really cool neighborhood as well. For the people who have been to Taipei, it's called the “Zoon Hua…” no, “Xiao Dun Hua” or something. Maybe I'm pronouncing it wrong. But in any case it's a really cool neighborhood with lots of like little bars and restaurants and little shops and it's very central so I'm very much looking forward.
Margot: That sounds great. And you won't have to take too much of a time zone change when you go there too, right? Well maybe only-
Jasper: No it's just one hour. it's just one hour.
Margot: Yeah, yeah, cool. Well I'm here in San Francisco, and it's becoming summer here, and that means it gets cold. Which is, it's such a strange place here.
Jasper: I know, San Francisco has such a weird climate.
Margot: It's so strange. It's very cold and foggy today, but I got to hang out with a few of my colleagues from Blue Startups. Not from the same cohort that Hostfully was in, Blue Startups is an accelerator program we were in in Hawaii, and I just got to spend a little time with a few teams that are in town this week from Honolulu, and we were just talking about how crazy the weather is here. Those are two travel companies called Trip-a-Dee and VR Front Desk, both great guys, and I look forward to talking to them tomorrow at Tech Con. Are you going? Have you hear of that? You're not going obviously cus it's here.
Jasper: It's a bit far.
Margot: Yeah yeah. It's a great local tech conference here in the Bay Area on Treasure Island and I'm really looking forward to going tomorrow.
Jasper: Awesome, well I'd love to hear what you learn at the conference.
Jasper: Always fun to hear about new travel startups.
Margot: Yeah, totally. I'm actually speaking at the conference, too so-
Jasper: Very cool.
Margot: Excited to make some connections there.
Jasper: What are you gonna talk about?
Margot: I'm gonna talk about the risks and benefits of joining an accelerator program as an early stage startup. Just all the considerations you should think about going into it. We- Hostfully- has been part of two accelerators, which is not totally uncommon, but we've actually been accepted into four accelerator programs, and I spent a lot of time doing research about what we should be doing. So I thought I could bring some those thoughts and that process- to other startups and help them out in that way.
Jasper: Awesome, that sounds great.
Jasper: Alright, well let's get into this week's news. Let's start with a pretty extensive article that came out on CNBC. It doesn't really have one particular topic; it's more of an overview of what's been going on in the home sharing ecosystem kind of, with some updates about some numbers and stuff, like Airbnb has risen to top the 2017 CNBC Disruptor 50 List and since its launch 115million travelers have now stayed in 3 million Airbnb listings in more than 191 countries, and Brian Chesky is hoping to one day redefine how we fly. So the flight industry is another industry that they're probably going to get into in the near future. And of course they recently launched their new trip service and they've actually updated it a bit- I think now when you go on the Airbnb it's really trying to show you more personalized recommendations as to what you can do depending on your location. And they're saying that it's growing faster than the core Airbnb homes business did in its first year which, which sounds very positive, although there's one caveat I think. Now first of all, Airbnb grew very, very, very slowly in its first year. I mean, they weren't getting any traction at all. And secondly, it's much easier I think to launch a secondary service if you already have- I don't know exactly how many users Airbnb has but I think it's, like, somewhere around like 15 million or something? And if you already have 15 million people on your platform and then you launch a secondary service, then obviously it's gonna grow faster than when you launch your original one, right?
Margot: Right, when you didn't have anything.
Jasper: Yeah exactly, I mean you're running a startup. You know how hard it is to get some traction going like especially at first, you know, in the beginning.
Margot: Yeah. And actually I think what this article does really well is it starts to draw the comparisons between Airbnb and the hotel industry and kind of like, brings Airbnb to be kind of a, a decent-sized sibling with the other hotel, really behemoth companies in the industry because it does something like comparing valuation and revenue between Airbnb and some of the hotels. A few of the things that I found that were really interesting were: one is that the article, I think they could have done a better job of this actually, but they talk about how Airbnb is growing but then also Expedia's Home Away is growing as well. And from my perspective, and I think many others agree that there's a lot of market growth that's going to happen that's not at the expense of hotels. But then there's a lot of growth that's happening that is at the expense of hotels, too. And the hypothesis out there is that almost 50% of the vacation rental market is not on booking platforms. There the kind of vacation rentals that you would find in Tahoe or Jersey Shore- and these are places you'll find in the United States. Or kind of, like, vacation destinations that have been around for a long time where there are rentals happening by word-of-mouth, and that there's still a lot of room to grow in those markets before the hotel industry and Airbnb every have to really face off with each other. But they don't do a great job of saying that. But that's just what I think. I mean if you read the numbers, it shows that that could still be true. So I expect that to continue, yeah.
Jasper: And another interesting part of the article is when they talk about the Experiences. So the Experiences have also been launched like, in November last year. And apparently it's also been growing. Now, I've actually signed up to do an experience in Amsterdam, which is like, a month and a half ago, and I never heard back. And I don't know, I've heard from a lot of people that they've signed up and haven't heard back but Airbnb says 6,000 people have completed Experience submissions, 40,000 have started to process, and more than 800 hosts have met Airbnb requirements for the service, and they have now 1100 active Experiences. So, of the 6,000 people that have completed the submissions, only 800 have met the requirements it seems, and I just wonder if for some reason your submission doesn't meet the requirements, if they ever get back to you because I haven't heard anything. So I find it a bit odd. But anyway they've expanded it to 24 cities now. They say that more than half of the experiences are under 200 dollars. And they say that the typical price paid for an Experience so far has been 91 dollars per person. Now, there's been a debate, I think, going on, whether Airbnb is actually going to be able to get significant revenue from the Experiences and the Trips part, and, you know, Brian Chesky has mentioned that he wants half of the income of Airbnb to come from those parts of the company by 202 or 2021, but you know there's definitely some people who think that that's gonna be a really tough call. For example, I know there's one person who mentions that scaling an experience is a lot harder than scaling a home, right. If you have a home, you can rent it out 30 days a month, and it doesn't cost you that much extra effort. You don't have to put in that much extra time. However, when you're doing an Experience, you're putting in your time, right? I mean if you have a normal job, like how many hours a month are you doing these Experiences? It's probably not going to be more than a couple hours a week, and if you do spend more time, if you do actually like, you know have or do up to 10, 20 hours a week, then it's almost becoming like a job, right?
Margot: Mhmm. Or, you hire somebody else to do it and then it dilutes the quality of the experience.
Margot: I'm sure it's never past the bar.
Jasper: So, you know I'm a little bit skeptical as to whether this Experience thing can really become such a big part of the company. I have to say I was very enthusiastic when they first launched it but my enthusiasm has gone down a little bit. Partly because, you know, they never got back to me on my- the experience that I created, but also I've just noticed that I've stayed at so many Airbnb's since November but for some reason I've never gone on any of these Experiences. Now, that could be like, me personally, you know? It could be that I'm different from most Airbnb users but I just kind of noticed it. What about you? Have you been on an Experience yet?
Margot: I have not. I have, like before Airbnb launched Experiences though, I have done some things that are very similar. So like, you know, I went with my husband a few years ago to Prague and we hired a personal tour guide to take us around the city for a day and basically give us a tour of the city that was very art oriented. So we went to a lot of major art pieces and talked about the history of the art and the rationale behind the art and, you know, what the art means today, and it was great. We got a lot out of the trip because of it. But I don't know if I would have booked it on Airbnb because I liked going through a tour agency to do that because I know that they had had a lot more experience and had kind of like a network of people so that I could say “This is what I'm looking for, will you please find somebody” and then they would actually personally find the person who would serve that need, where as Airbnb has you find the person yourself. And since this is a new service, like they don't have years of experience, well they might but you don't know for sure. It's just a little bit harder to trust. So I have booked several of these types of trips in different cities where I'm with a private tour guide for half a day or a day, but I don't know if I would book it through a service that didn't have the, kind of, overhead or sort of administrative function, cus I trust- it brings more trust into the process. Anyway, just something to think about.
Margot: I agree that, I totally agree about the scaling thing I think that that represents one of the biggest hurdles as well which is that, like, you can't just like put in 5 hours and then it works for a 3 day stay; every hour that you put in is an hour that you get paid for and the return is not as great as what you would get when you are renting your place.
Jasper: Yeah cus it's interesting, I was doing the numbers a little bit and Airbnb is taking a 20% cut out of what you're making as an Experience host. And you know, I mean I signed up because I just wanted to have the experience. I wanted to see what it would be like, and I thought it would be fun to do. But when I was calculating the numbers, the return on your time is not that great. If you want to have a good return you either have to get a lot of people on your tour or you have to price it really high which I think will probably make the chance that a lot of people will book it a lot smaller. So I think the key is really, you know, to be able to get a group of people. But you know, I mean you can specify what the minimum amount of people is, but still if you do like four or more then you're probably not going to get a lot of traction. So you might have to start with like, you know a minimum of one person and just kind of- just like when you're renting out your place when you're starting, you know, and you want to lower the price a little bit to get some momentum, and you probably need to do this with the experiences as well where you might have to accept one person and not really make a lot for a while just to get some reviews and stuff and then maybe up it to like two, three, or four later.
Margot: Yeah, yeah. But it might even be slower going than good for the rentals. I feel like it's a new thing for both the host and the guest, where as I feel like with the vacation rentals, like that motion has already been going on, before Airbnb even. You know what I mean?
Margot: Like, the act of booking someone's home- that's already something that people did but the Experience thing- the act of like, contacting a stranger and paying them for a service where you're going to spend a really concentrated amount of time with them, like that's a really new kind of thing.
Jasper: Yeah absolutely, yeah. So anyway, we'll see. Hopefully I'll hear back from Airbnb at some point.
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Jasper: Let's talk about something else, like, you know this article really talks about a lot it's a very extensive article, and they also have a paragraph about how hotels are trying to catch up with the short-term rental industry.
Margot: Yes. With some innovative initiatives. You wanna talk about the first one? I think it's so funny.
Jasper: Yeah, no yeah the first one is definitely uh… it really caught my interest when I saw the picture. It's called “Moxie” and it's part of- what is it, part of Marriott? Uh yeah, it's Marriott's Moxie Hotels, launched in 2014, it's a line of seven mid priced urban hotels in Europe and the United States with open plan communal spaces, I think game rooms, a bar that doubles as a check-in counter, they have internet TV, mobile device to TV in-room streaming… now they're kind of uh… they're becoming a little bit more tech-savvy I guess it seems. And you know, it's interesting- in Amsterdam a lot of hotels have moved towards this type of setup, you know? I've actually stayed at quite a few hotels in Amsterdam because I would come home to Amsterdam and I would still have guests for a couple of nights or something so I would just check into a hotel and I've noticed that they're becoming a lot more like technology advanced, like it's no longer everywhere where there's a reception and there's like people checking you in and stuff. Now often you walk in and there's a tablet, the rooms often are designed in a different way, especially when it comes to charging your devices and stuff, they have different types of outlets and USB, you can plug in HDMI cable from your laptop to the wall where you can stream your stuff to the TV, all that kind of stuff. And I think Marriott is trying to do the same kind of thing here. But it's also the housing, the actual housing- they have a brand symbol hotel room that's housed in a shipping container as part of their innovation lab at the Marriott International Headquarters in Maryland and that's pretty cool. You know, cus that's obviously like, must be pretty cheap, you know? Just buy a bunch of containers and turn them into hotel rooms.
Margot: Yeah. And I've actually seen a lot of housing proposals to doing this as well like, a shipping container is actually a very decent amount of space for an apartment in an urban setting, and there is even a building here right in Hayes Valley in San Francisco which is like right in the center of the city that has stacked I think two or three, maybe three shipping containers and that's the apartment building. So anyway it just reminded me of that. But I think that they're, they are trying to go with this like high-tech, scaled back brand which if you think about it is really competing with Airbnb in terms of the aesthetic that Airbnb is typically known for, and of course every Airbnb is different. But, you know, the kind of high-tech, modern, urban feel is definitely there so that's kind of interesting. Along with all the services. Let's see, we talked about the scaling thing; I'm glad you touched on that cus that was the best part about this article. I'm trying to think if there's anything else that I want to talk about. I think that was it. I think it's a great summary of where hotels and Airbnb kind of stand and I think it was one of the few things I've seen that really got into the details enough for it to be interesting. So if you are interested in reading about that market go check it out it's on CNBC and it's called “It's been a trip to $31 billion. Now Airbnb wants to remake the entire travel industry.”
Jasper: Awesome so let's quickly touch on some other articles that came out. There's one article that talks about how Sweden has listed its entire countryside on Airbnb, which means that they have their own little Airbnb page basically. And if you go to this page then you'll see a map of Sweden with all the different places where you can rent Airbnbs in Sweden which is pretty funny. They're trying to give tourism a little boost by making this move and I was having a look at the different listings and I just realized Sweden is a big country and there's a lot of space.
Margot: Yes. Yeah, and the Sweden tourism board was like, very upfront that it was like a brand partnership and they felt that it was a great opportunity for Sweden to show the variety and the diversity of the landscape in Sweden and yeah it shocked me too, because I always think of Stockholm and like, more populated areas and it was just all these beautiful pictures of nature. So go check it out, I think it was very, it was a really nice way to look at Sweden. Definitely brought my attention to it so it's working.
Jasper: Yeah, me too, I mean there's some really beautiful listings up there and you can directly go to the link actually, it's sweden.withairbnb.com so go check it out and I'm sure you'll see some stuff that you really like. There's another interesting, funny little article about- there's an Ad Agency that turns its office into a crazy Airbnb and they did this to get the -Jonathan Mildenhall's- attention of who's the CMO of Airbnb because apparently Airbnb is looking for a new, what is it called, Ad Agency. And so they, you know, this company is called OH Partners, and they really like Airbnb and they wanna work with Airbnb so they did this whole thing basically to draw attention to them. They hosted a 24-hour live stream as well hoping to catch his attention, and they converted its office space into a spacious Phoenix penthouse suite. It's an Airbnb listing “complete with one comfy bed fit for a brand CMO, a cold brew tap and free disco balls.” I'm quoting this from the article. So, I thought that was pretty creative, a creative way to, you know, draw attention and to, hopefully for them, to get the chance to work with Airbnb.
Margot: Mhmm, definitely. Did you also see the article about the luxury Japan site? I thought that was kind of interesting, too. Just on the lighter side of things.
Jasper: Yeah, I saw that, I didn't read it but go ahead.
Margot: Yeah, it says that Airbnb is launching a luxury reservation service in Japan, which is like, there are these different echelons of rooms in Japan and um, anyway, it's- I actually don't understand- I have not traveled in Japan enough to know about what this is, but it's basically like being able to book rooms in these Japanese inns that are typically not available to book on platforms like Airbnb.
Jasper: Oh, yeah now I know what you're talking about, we actually talked about this last week, yeah.
Margot: Yeah, Rincon Traditional Inns, yeah.
Jasper: Right, yeah, yeah. We briefly touched on that last week actually.
Margot: You did, yeah. Sorry old news.
Jasper: Old news. Uh oh, okay this is the last time you're invited on this podcast Margot.
Margot: I want to go stay in those it looks nice.
Jasper: Well let's end this podcast with a little bit of regulations news. HomeAway has filed a lawsuit against Chicago- the city of Chicago- and they say its home sharing law is unconstitutional. So that's interesting that now HomeAway is joining the fight against some of these regulations. I think so far it's been Airbnb that's been kind of leading the way in terms of fighting the local authorities and fighting lawsuits and stuff, but now HomeAway is making a move.
Margot: Yeah. I'm surprised they're doing it in Chicago versus like, New York, but maybe it's because they're actually in Chicago, you know what I mean? Compared to New York City or something like that, I don't know why. The regulations in New York are really tight, too right now.
Jasper: Yeah maybe they think they have a better chance in Chicago. They basically say that the law is deeply flawed. It threatens fines that are based on categories that cannot meaningfully be distinguished from one another, and they also say that it violates the First, Fourth, and Fourteenth Amendments. And then they're talking about the rules that were put into place in Chicago last summer- the rules that seek to impose home sharing sites which is Airbnb, HomeAway, etc. So they're fighting back a little bit; it'll be interesting to see how it goes.
Margot: Yeah you know what'll be really interesting? Is if HomeAway and Airbnb actually build a formal coalition where they are fighting a legislation together.
Jasper: Right, because that's what the hotels have, right? They have this whole community where they're combining forces?
Margot: Exactly… lobbying organization has a lot of money that they pay on an annual basis to support positive legislation for hotels. And yeah anyway, obviously they've been complaining a lot about all the recent changes in the market because they feel very threatened by short-term rentals in urban areas, but it will be really interesting to see how this all plays out because both Airbnb and Expedia have very deep pockets and very big focus areas around policy and legislation so it will be very interesting…
Jasper: Right, Expedia is of course the owner of HomeAway. Alright Margot, we are getting to the end. Thank you for your time, thanks for co-hosting this podcast with me today.
Margot: Thanks. I hope you feel better soon. Sorry, I don't even think that we mentioned that you were under the weather.
Jasper: I was trying to pretend everything was going great.
Margot: You did awesome.
Jasper: Anyway, thanks listeners for listening, and by the way, from now on this podcast is going to be always published on Friday which has to do with the fact that my producer, he needs a little time to edit the audio and make sure it's perfect. So from now on it will be Monday will be the interviews and Friday will be the episodes. So thanks for listening, see you next time!