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EP158: This Week in the World of Airbnb

By Jasper Ribbers

June 2, 2017

As the homesharing phenomenon grows, people continue to develop a variety of creative products and services that complement the work you do as an Airbnb host. A new app generates a floor plan for you through photos of your space, while another detects the number of mobile devices in use and alerts you if guests might be having a party!

Jasper is on the line with Hostfully Co-Founder and President David Jacoby to discuss a number of useful sites that make life easier for the savvy Airbnb host, many of which were represented at the recent HSDC Trade Fair in San Francisco. They also cover another aspect of the sharing economy that Airbnb hosts might be interested in using to upsell their guests, peer-to-peer car sharing.

In other Airbnb news, a recent report pointed to exponential growth of vacation rentals in Spain, and Airbnb made an effort to generate positive press with an announcement regarding how much guests saved by booking on the platform (rather than with hotels) over the holiday weekend. Listen in as David and Jasper offer their takes on these stories and share the latest products and services in the homesharing ecosystem.

Topics Covered

Article #1: Airbnb Accuses Hotels of Price Gouging During Holiday Weekend

Airbnb contends that guests saved $12M (in 21 cities analyzed)
Attempt to generate positive media
Airbnb’s Smart Pricing algorithm also designed to charge more when demand is high
May not be fair to compare such different products

Article #2: Spain: Vacation Rentals Offering More Beds Than Hotels for the First Time

Tracked 2016 statistics of 22 major cities
Number nearly doubled from 2015 (362,493 beds)
By comparison, San Francisco totals have grown from 1,000-2,000 to 8,000-10,000 in last ten years (hotel beds went from 32,000-35,000 in same span)
Huge growth in tourism industry has led to ‘tourist-phobia’
Regulations in Barcelona seek to keep tourism numbers down (only private accommodations allowed)

Homesharers Democratic Club Trade Fair in San Francisco

Successful celebration of homesharing ecosystem
Attended by 30-plus vendors
Among a number of events organized by independent groups of hosts

Article #3: The Sharing Economy’s Entrepreneurial Ecosystems

Video re: car sharing platform, Turo
Car owners developing rental businesses w/ multiple vehicles
Turo users earn average of $720/month
6M users in 2015, predicted to reach 35M by 2021
More popular in Europe and Asia than North America
Airbnb hosts could incorporate car sharing into business, offer coupon code for guests

This episode is sponsored by Aviva IQ. Aviva IQ automates messages to your Airbnb guests. It's also free!

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Complete Transcript for Get Paid for Your Pad Episode 158

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've begun 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.

Get paid for your pad! My name is Jasper and I'm co-hosting this episode with my favorite friend from San Francisco, David Jacoby, who is the president of Hostfully, and co-founder.

David Jacoby: Hey, Jasper. That's so kind of you, your favorite friend. You say that to everyone.

Jasper: I do. I'm sorry.

David Jacoby: Well, it's great to catch up again, Jasper. Always a blast.

Jasper: How's life in San Francisco?

David Jacoby: Life in San Francisco is awesome, so much fun stuff going on. On the Hostfully side, we actually just finished an awesome accelerator program called Acceleprise, so learned a lot, got a lot of help from them. We are ready to explode. We also had the Home Sharers Democratic Club Trade Fair, which I will talk about a little bit later, so never a dull moment here. Also, a quick shout-out to Maxim and the Travel Tech Con folks. There was just a huge travel tech conference here and it was a big success. It's been a few years now that they've done it. There was a big startup pitch competition. There were a whole bunch of breakout sessions. There was some more in-depth workshops. It was a pretty cool event. Never a dull moment, Jasper. Come visit again.

Jasper: Awesome. I'm looking forward. Well, I'm in Taipei and one thing that I didn't realize is, before I booked my ticket, that it's the rainy season here. It's raining a lot and it's very humid, so every time I walk on the street, I'm sweating my ass off. Still, Taipei is one of my favorite cities in Asia. I think I would even say it's my favorite city in Asia. I'm going to be here for a month and it's good times.

David Jacoby: Nice.

Jasper: Awesome. Let's get into what has been going on in the world of Airbnb. Do you want to kick it off?

David Jacoby: Sure, so with Memorial Day weekend just ending, Airbnb gave a big announcement that last year, they saved consumers over $12 million in 21 of the popular biggest US cities by having folks stay at Airbnb instead of at a hotel, where hotels participate in price gouging during busy times like Memorial Day weekend and other holiday weekends.

Jasper: Right, and what's your opinion about that?

David Jacoby: Well, I think there's definitely some truth to that. A few years ago, I remember a spokesperson from ALHA, the American … I don't know, the Lobby Hotel Association or something like that, the big lobby for … American Hotel and Lodging Association, that's it. Someone put their foot in their mouth by saying the biggest thing about Airbnb that's tough for them is that it makes it harder for them to do big increases, surge pricing during the holiday weekends and big-demand weekends. Basically he was saying, “Airbnb makes it tough for us to ripoff travelers.” There is some truth to that. Airbnb for sure has a lot more reasonably-priced accommodations in many markets. Like here in San Francisco, if you're willing to get an extra bedroom in someone's home as opposed to a private accommodation, you can oftentimes find a better deal than an expensive downtown hotel.

On the flip side, they're talking a little bit out of both sides of their mouth, Airbnb, because they've also implemented their smart pricing tool to help hosts manager increases in demand and help them charge more on busy weekends. So on the one had they're saying how they're helping guests save money, and on the other hand they're telling hosts that we're going to help you charge more when it's busy.

Jasper: Yeah, so what I think is that, first of all, it's kind of like comparing apples to pears. Staying at an Airbnb is a different experience to staying at a hotel. It doesn't really make sense to me to say, “Oh, look, people have saved this much money,” because it's a different product that you're selling. It's basically like, imagine there's only one car brand, and ever car costs $10,000. Then somebody else invents a new car that costs $8,000, and then every month the new car company is going to say, “Look, people have saved this amount of money by buying our car!” Well, I mean, it's a different car, so people can make a choice whether they want to spend a little bit more on another car. The more expensive car might be better, it might be a better quality, whatever it may be.

I understand why they're saying it, because they really want to create some positive media for Airbnb of course, because the media is, in general, very negative about Airbnb. I search for Airbnb news every week and probably 80% of the articles that you find is some Airbnb guest destroyed an apartment, or the regulations everywhere, complaints … it's all very negative. I understand that they're kind of looking for more positive spins, but it just doesn't really make that much sense to me and what you're saying is also true. Their algorithm is also designed to help people charge more when demand is high. I don't think there's any problems with that. I don't think it's a problem that prices are higher when there's more demand. That's just how markets function. Whenever there's more demand, and if it's a constant supply, prices go up. That's not a problem. I don't think it's a very strong argument.

One thing I will say in Airbnb's favor is that the smart pricing algorithm that they have, I strongly believe that it typically under-prices, especially when it comes to the special dates, the high-demand events. When you compare the Airbnb smart algorithm to some of the other price algorithms that are out there, I definitely think Airbnb is recommending lower prices, and it makes sense because Airbnb has to act in the interest of both hosts and guests. They make this tool available to hosts, but at the same time they don't want to make Airbnb very expensive. They don't want to lose that edge that they have over hotels where Airbnbs aren't ever cheaper than hotels. That's one of the main arguments that they have in the media to support their cause.

David Jacoby: Yeah. First of all, I'm still getting over trying to understand your comment about apples and pears. Here in the US, it's comparing apples to oranges, so that's pretty funny how it's apples to pears in Amsterdam or wherever you picked up that phrase. Aside from that, I'd like to see a news article about how a hotel room got destroyed sometime. There's millions of reservations a month on Airbnb, and of course once in a blue moon, some drunk guest is going to ruin an apartment, but that happens in hotels all the time, and I don't see any articles about a hotel being ruined.

Jasper: I think that's the reason why there's never an article about that, because it's normal.

David Jacoby: Right, I guess.

Jasper: It happens so much that if you put up an article saying, “Oh, some bunch of people destroyed a hotel room in Vegas,” who's going to read that? Everyone's like, “Yeah, duh, of course that happens.”

David Jacoby: Yep. Also, with regards to the smart pricing, interesting side note … I agree with you, by the way. Their “smart pricing” is considerably lower than the other independent tools out there like Beyond Pricing and Wheelhouse and Everbooked. In that area, big news, the folks at Everbooked … that's been one of the leaders in dynamic pricing and one of the first ones out there for Airbnb hosts … they've made a small pivot and they've done a lot with their analytic tools that they're selling and providing services to larger vacation rental management companies and other companies that they're starting to take their dynamic pricing tool for individual Airbnb hosts off the market. Now there's a little less competition in that space, but there's still lots of other good tools out there. I wish Everbooked the best in their new pivot and new business model.

Jasper: Yeah, absolutely. I knew about their pivot for a while but I wasn't allowed to talk about it, because Everbooked was one of my first partners when I started blogging and doing the podcast. I definitely wish them well, as well, and by now there's a lot of pricing algorithms. There's a lot of them. You mentioned the most well-known ones but there's also some new ones coming up that I've found that I'll be talking about soon.

Let's go to the next subject. Let's talk about Spain. There's an interesting article in El Pais, which means The Country, I think. It states that in Spain, vacation rentals are now offering more beds than hotels for the first time. This is in 2016. Vacation rentals have taken over the tourist market in Spain, which is a pretty cool milestone.

David Jacoby: Yeah. That's pretty crazy to see how far vacation rentals have come. This article is specifically talking about Spain's 22 biggest cities that vacation rentals are a larger supply than hotels, and it says that it's nearly doubled from 2015 and has reached 362,000 beds in Spain's 22 biggest cities. That's huge, and it seems like that's where the room is to grow. I know here in San Francisco, for example, about 10 years ago there were about 30,000 hotel beds and ten years later, there's about 35,000 hotel beds. If you look at vacation rentals, there were about 1 to 2,000 vacation rentals, and now there's about 8 to 10,000. That's where all the growth is happening, and specifically with regards to the cities, I can only imagine the resort or more the beach areas. I guess some resort places have hotels, but there's a lot of suburbs and beach areas where there's probably even more vacation rentals there, where that's a stronger part of the economy and there's less hotels. That's a big milestone.

Jasper: Yeah, absolutely. It'd be interesting to see some data for the whole country, see how that compares.

David Jacoby: Yes. I know also in Barcelona, that's been a very controversial topic for years, short-term rentals and vacation rentals. Barcelona's kind of busting at the seams with tourists, and they're trying to do what they can to decrease the amount of tourists. One thing that's different in Barcelona than here in San Francisco is that they only want it to be a private accommodation if you're going to do vacation rentals in Barcelona. You can't share a home, because they want to treat tourism more as a professional-type service, and they only want professionally-managed companies to be managing these vacation rentals. That's the exact opposite of what you see in many other cities, especially here in the US: Chicago, New Orleans, San Francisco, where a lot of the talk is about you can't rent out a private home, you can only do a short-term rental where you live.

Jasper: Yeah, that's really interesting. I think Barcelona is thusly one of the cities that has the most strict regulation, where there has been the most resistance against Airbnb. Yeah, it's definitely interesting that they don't want to allow the private rooms, because you would think that that causes the least disturbance.

David Jacoby: Yes, and it also allows for a lot more tourists to come to Barcelona, I guess, and it seems like they're trying to limit that a bit.

Jasper: Yeah. The article mentions a tourist phobia. It's similar in Amsterdam in the city center. When you get a certain amount of tourists in your street, there's sort of a flip point where people start really hating the tourists. I think that's probably what's been going on in Barcelona as well.

David Jacoby: Mm-hmm (affirmative).

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Let's move on. You mentioned that you wanted to talk about the fair that you guys were part of a while ago, right? A couple weeks ago.

David Jacoby: Yeah. Shall we talk about that now?

Jasper: Yeah, if you wanted to talk about that for a bit.

David Jacoby: Sure, great. Well, we just had in San Francisco the Home Sharers Democratic Club Trade Fair. It was our first trade fair, and it was a huge success. This was an all-volunteer effort, the Home Sharers Democratic Club. We're an independent organization. We're actually an official chartered organization within the San Francisco Democratic Party, and we meet with legislature here, with supervisors to talk about lobby for different laws and all the political legislation that's been going on here in San Francisco. We've had a voice in that, but we also share best practices, put on events on a monthly basis where we all meet and talk about best practices, and we have monthly happy hours and we just decided to do a trade fair. It ended up to be better than what anyone expected

We had over 30 vendors attend, and it was really a grand celebration of the home-sharing ecosystem. The type of companies that were there really ran the gamut. A list of just some examples: one on the one hand there's companies like ClearBank, that gives you loans in advance to help improve your Airbnb space, and then you pay it off with the Airbnb income that you get; to the [Airbalo 00:16:00], which is a cool design of the [balo 00:16:02] for your home. They were at the Airbnb Open. You might have seen them there. There was Properly, of course, the guest cleaning app. There were some vacation rental managers like Host Well and Pillow. There were platforms, of course, so booking.com was there. HomeSuite was there, for those looking for more than 30 days. Our platinum sponsors were HomeAway and Airbnb, so we got them both to sponsor. Then also there was a furniture company that just has lots of Airbnb hosts who buy their furniture, so they wanted to get in front of folks.

Of course, Aviva IQ, the sponsor of this show. Thank you, Aviva IQ. They showed up. Party Squasher, which can tell the number of Wi-Fi signals in your home, so you know if there's more people there than is supposed to be there, and if there's a big party going on. DwellWell, which does testings for your home to make sure your home is safe. It really was a wide variety. Babierge, which is this cool startup for baby rental supplies. If your guest doesn't want to schlep all of their travel crib and car seat and high chair and stroller, they can go to babierge.com and rent that from a local person who has extra supplies. Again, there were over 30 vendors and over 200 attendees, and we also had an Assemblyman, David Chiu, who actually wrote the original legislation in San Francisco, and Scott Weiner, a state Senator. They both came by and they were pretty impressed with the turnout. And then Joe Gebbia came by as well, of course co-founder of Airbnb. It was really exciting to have him there and help celebrate the ecosystem with us.

Jasper: Damn, I'm kind of sad that I missed it.

David Jacoby: I told you about it a while ago.

Jasper: I know, you did. I'm too far away. I'm literally on the other side of the world, but it sounds awesome. I'll definitely try and come next time you guys organize this. Now that we're talking about … Well, first of all let me say that I also think it's incredible to see how many creative companies are joining the Airbnb ecosystem. I get emails every single week of new startups and every now and then, it just kind of blows my mind how creative people can be, things that I would never thought about.

I recently got an email from a company that automatically creates floor plans for your Airbnb, so all you need to do is just take a bunch of pictures, and then it automatically creates a plan. I've always been recommending people to put up a floor plan. I've used floorplanner.com because if you look at Airbnbs, it's very hard sometimes to get a good idea of what the layout of the apartment is, because you're just seeing separate pictures of the different areas. You kind of want to just know what's the layout like? Where are the rooms? Where's the living room, where's the kitchen, et cetera? Putting up a floor plan makes that very easy to understand, and now this company called MagicPlan … I think they literally just started … makes it really easy. I probably spent like an hour or two creating this floor plan with a tool, so it's kind of a bit of work.

David Jacoby: Also, one more quick comment on that, Jasper. I think I mentioned this last month as well. Especially with Airbnb Open not happening this year, it's great to see how all these different cities, not just San Francisco, are starting to put on their own events being organized by separate groups of hosts, not Airbnb, not HomeAway, but independent groups of hosts. For example, there was just a big event in Portland that our friend Debi Hertert from Hosting Your Home, she organized and a bunch of other folks there. That was a full-day event with a bunch of vendors, but also some breakout sessions on how to be a good host. There is also the Vacation Rental Success Summit in Toronto, just happened about a month ago. Folks at LASTRA, the Los Angeles Short-Term Rental Alliance, they put on an event about a month ago.

It's really fun to see all these local groups putting events on, and listeners out there, I definitely encourage you to do that. It's a great way to meet other hosts. Sometimes hosting can be a bit lonely, and this is a great opportunity to really celebrate what's out there. Feel free to contact me if you have nay questions about how to put it on. I'm happy to share my two cents and my experience.

Jasper: Awesome, and it's good to remind people there will not be an Airbnb Open this year. They're going to do it every two years, so if you don't know that, then you do know.

Let's talk about something related to Airbnb. There's a company called Turo, which is in the business of car-sharing. There's a video on Bloomberg that I saw, which kind of grabbed my attention because if you think about the sharing economy, and if you think about trying to make a return on your assets, your home is obviously the number one thing that you could share. But then the second logical asset that you could share is your car. Car-sharing has been around for quite a while, but I feel like it hasn't really caught on as much as home-sharing. It's not as disruptive. It hasn't really created the revolution that the home-sharing platforms have created.

This is the first time that I've actually seen something in the media where you see some people who are actually making a decent amount of money with sharing cars, and also there's two people in the video that have kind of started their own car rental company. There's one guy who is being interviewed that has nine cars. I think the other lady has three cars. Neither of them planned on having their own car rental company, they just started with one car and they say that, “Hey, we're making a decent profit with this car. Let's buy another one.” I wanted to mention this because if you're an Airbnb host, and you're obviously in the business of sharing, or you have the mindset of sharing, so the next logical step might be to share your car.

David Jacoby: Yes, that is a great idea and there's a lot of startups that are starting to do that. Turo, which is T-U-R-O, they actually used to be called Relay Rides. They're one of the first. They've been around for a while. I've personally used them, both as a driver and as a car owner. I've rented other people's cars on Turo and I've also put my car up a while ago and let people rent my car, and it was a great way to make a couple extra bucks when my car was just sitting in the driveway. Of course, now I have two kids and my car is really messy and has got car seats in it, and it's a headache I don't want to deal with right now, but maybe eventually I'll do that. There's also, of course, the traditional ones, like ZipCar is popular here.

There's a new fancy one called Maven, maven.com, which is just a fleet of cars that you can rent by the hour and it's really tech-savvy cars. It links to your Apple Music or your Android device to play music, and it's got Wi-Fi in the car and a bunch of other things. More similar to Turo, though, where other people's car, Getaround is another popular one. One thing that's good for hosts about Turo and about Getaround, sometimes they might ask, your guests, can they borrow your car? Is there a car rental place? Instead of just letting them use your car where you might be nervous if they get into an accident, these companies include insurance in it. Not only do you get paid, but you feel safe knowing that if anything happens to your car, they have you covered.

Jasper: That could be a nice extra service that you can offer to your Airbnb house. You can just list your car on Turo and then you can give your guests a discount or something? Maybe you could say, “Hey, I'll give you 50% discount if you want to take my car out.” That way you're making a little bit extra, and also you know that your car is insured in case something happens.

David Jacoby: Yeah. Most of these services have a coupon code, too, so if you have your code that you give to your guests every time, if they're new users, they sign up and they get automatically like $20 off the first ride or something like that, and you get a bonus for having referred them. Just like referring Uber and Lyft and giving those codes out, people get a free ride or a cheap ride from the airport and you get to get all these Uber and Lyft credits, you can do that with Turo and Getaround.

Jasper: Interesting, yeah. Let me mention a few numbers, by the way, that are mentioned in the article. The Boston Consultancy Group did a report on the future of car-sharing and they're saying that 6 million people used car sharing in 2015. They're projecting that 35 million people will share their car by 2021. That's reasonable growth, I'd say. Not as huge as in the home-sharing sector, but it's still pretty strong growth. It's much more popular, apparently, in Europe and Asia, which is kind of surprising. I guess Americans, they are very attached to their cars and so maybe they don't really feel like sharing them. The average monthly income for Turo users is $720, which I thought was pretty high.

David Jacoby: Nice.

Jasper: That's pretty high, right?

David Jacoby: That's awesome.

Jasper: I don't know how they calculated it, but I would almost think that's a little higher than I expected. Turo handles the marketing, the insurance, so it's pretty easy to just sign up. I don't know how it works with like cleaning and stuff, but you've used it. How does that work? Do you have to clean your car before you rent it out and when you get it back? What happens? Do you charge a cleaning fee or something?

David Jacoby: No, you're just responsible for keeping it clean, which again, with two kids, one of the reasons I don't do it anymore.

Jasper: Okay, fair enough.

David Jacoby: On that note, you mentioned the next step being cars of an extra commodity of yours or extra something that you can rent in addition to a bed or a room in your home. Taking that one step further, also, there's a company called Roost, R-O-O-S-T, which I think actually merged with Spacer, S-P-A-C-E-R, which you're able to rent out storage in your home. If you live in a city like San Francisco where you might not have a lot of extra room for some of your stuff, but someone nearby has a large garage or an attic and they have extra space, they can actually rent out their attic to you. You come by and drop off your Halloween supplies or Christmas supplies that you use once a year and they'll store it for you, and you pay them a small fee.

Jasper: Awesome. That will be very useful for me, actually, because I can't carry around all my stuff when I travel.

David Jacoby: Yeah, now that you're homeless, right?

Jasper: Exactly, officially homeless.

All right, David, thanks a lot for joining me today and hosting this podcast. It's been a pleasure as always.

David Jacoby: Jasper, the pleasure is all mine.

Jasper: And to the listeners, of course, thanks for listening and we'll be back every Monday and every Friday. It's every Friday now, by the way, because there's so many holidays on Monday, so instead of doing it every sometimes on Thursday, sometimes on Friday, I figure might as well just publish every Friday so it's consistent. With that, thanks for listening. See you next time.

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EP158: This Week in the World of Airbnb

By Jasper Ribbers

Topics Covered

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