The Airbnb philosophy seems to be, “If you can’t beat ‘em, join ‘em!” This week in the news, there are rumors of a deal with Chinese rival Trujia, as Airbnb seeks to succeed in a market where other tech giants have struggled.
Jasper is joined by Hostfully VP of Strategic Partnerships, Nicole Prentice Williams, to discuss this development in China, as well as Airbnb’s new hire in the region: Head of Chinese Operations, Hong Ge. They also cover Airbnb’s surprising success in Cuba, and how Airbnb might capitalize on legal requirements for travel in that country.
In Barcelona, Airbnb seems less welcome, and headlines this week outline the crackdown on unlicensed homesharing in the city. Last but not least, Jasper and Nicole talk about one place where Airbnb is beating out the competition – online! Listen and learn about the platform’s surge in traffic and how it compares to hotel brands and other metasearch sites.
Article #1: Airbnb Says Cubans are Cashing in on Airbnb
- Cubans have earned nearly $40M since April 2015
- Hosts share space 33 nights per year on average
- Average amount paid per booking of $164
- $2700 average annual payout
- 58% of Cuban hosts are women
- Cuba is popular tourist destination for Americans since travel restrictions eased
- Only allowed to travel to Cuba for one of 12 reasons (e.g.: visit relatives, academics)
- Airbnb fulfills legal requirement of person-to-person visaArticle #2: Airbnb China Said in Deal Talks with Local Rival Tujia.com
- Airbnb entered Chinese market in 2015
- May be partnership deal or acquisition
- Tujia valued at $1B, raising $300M more
Article #3: Airbnb Appoints Head of China Operations After Long Search
- Yale grad Hong Ge reports directly to Chesky
- Resume includes positions at Facebook and Google
- Offers understanding of local market
- Other tech giants have struggled in China
Article #4: Airbnb Traffic Surges, Surpassing Older Brands
- Airbnb site traffic up more than 31% since Q1 of last year
- Moved into number one spot, surpassing all hotel brands and metasearch sites
- Strong user base among millennials
- 30% of respondents ages 18-34 use sharing economy services compared to 11% of those over 35
Article #5: Airbnb Faces Crackdown on Illegal Apartment Rentals in Barcelona
- 7,000 unlicensed holiday rentals in city (of 16,000 total)
- Doubled team of inspectors from 20 to 40 (100 by next year)
- Barcelona will not renew existing licenses
- City blames homesharing for housing shortage, high prices
- Airbnb argues platform helps homeowners make ends meet, could be part of solution
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Complete Transcript for Get Paid for Your Pad Episode 160
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 to another episode of ‘Get Paid for Your Pad,’ my name is Jasper, I will be your host together with Nicole Prentice Williams who is the vice president of Strategic Partnerships of Hostfully. Nicole, welcome
Nicole: Hey Jasper, thank you, thanks so much. It’s great to be back talking with you about getting paid for your pad
Jasper: That’s right. How are you doing?Nicole: I’m great. I’m very good. I’m here in LA. And, how are you? You’re in Taipei, right?
Jasper: That’s right, I’m still in Taipei for another week. A couple weeks. It’s been a lot of fun here. It’s my favorite city in Asia. So, I’m quite excited. Before we get into the news about Airbnb, I have an exciting announcement, because finally, get paid for your pad is now available in audio book. I’ve been meaning to do this for a while.
Jasper: It’s on Audible, which is an Amazon company, I use Audible quite a lot to listen to books, I think it’s awesome. And so, if you want to listen to the book you can find it on audible, just search for Airbnb, that’s Audible.com and if you don’t have an Audible account yet, you can download it for free, because if you sign for a free, 30-day membership you can get a free book, you can download any book for free. And so, if you don’t ‘Get Paid for Your Pad’ yet you can now get it for free. If you don’t have an Audible account yet. If you do have an Audible account then if you have any credits then you can get it for free, if you don’t have any credits then you don’t get it for free, but if you have the Kindle version or the paperback and want to get the audio book in addition, then it’s cheap its only like 4 bucks or so.
Nicole: That’s close to free
Jasper: That’s almost free
Nicole: Right, exactly.
Jasper: But if you go to Amazon and you search for Airbnb then you’ll find the book and you can get the audio book directly from Amazon as well. That’s how I buy most of my audio books. I’m a huge fan of audio books because they’re very efficient because you can listen to them while you’re doing something else. Like for example, I go to the gym every day, and I do 30-60 minutes of cardio, trying to lose some fat, and while I do that, while I’m on the treadmill, I always listen to audio books, so you can kind of do two things at the same time. Or when you’re driving to work or when you’re sitting on the train or sitting on the bus, or whatever you’re doing when you can’t really do anything else. Then listening to an audio book is a great way to use your time efficiently.
Nicole: Yeah, absolutely. I usually listen to podcasts while I’m multitasking. But I’m going to sign onto Audible and get my free book, how could I refuse? And share it with your friends.
Jasper: Are you on Audible yet?
Nicole: No, I’m not, I need to. I’m going to now. Now I have a reason
Jasper: It’s so convenient. You go to Amazon and you want to buy a book, it’s a one click process and it automatically downloads to your Audible app on your smartphone, so it’s a simple, efficient process.
Nicole: Awesome, streamlined.
Jasper: Yeah, so, I was going to mention something happened here by Airbnb. We’ve talked a lot on the podcast about what to do if there’s damages, how to get money from your guests, how to do the Airbnb resolution process, but now I find myself on the other end of the process. Because I was walking around in my living room in my Airbnb in Taipei and me kind of like stumbled, and I was about to fall down, and there’s a closet in the living room that’s not set up against the wall, so in a reflex I pushed against it to prevent myself from falling on the ground. And the closet fell over, and it fell against the door. Now the closet is pretty much destroyed.
Nicole: Oh, no,
Jasper: What’s even worse the front door has damage as well
Nicole: Oh no, did you contact the owner?
Jasper: Yeah, yeah, I did. At first, I took a few hours to calm down, I was like “oh no” I feel terrible, because I’m her first guest and she’s an awesome host, she’s been so nice, so I felt terrible. Because her apartment is beautiful its brand new and now its damaged. So initially I just felt bad, I couldn’t get myself to contact her, but eventually I figured okay, I just have to bite the bullet and let her know, that okay, I’ll pay for the damages and lee how we can resolve this. So, I contacted her and she was extremely nice, she told me don’t worry about it, ill fix it, I was like no, I want to pay for this, I want to help you, she was like oh no don’t worry about it, I’ll take care of it. So, she’s like really, really nice. Obviously, I’m going to make sure it doesn’t cost her anything. I think I have liability insurance that hopefully will cover it
Nicole: Wow, wow, good ending there. You’re okay?
Jasper: Yeah, I was fine, I just kind of tripped over and you know
Nicole: You don’t expect a closet to be kind of free standing there.
Jasper: No, exactly. It’s a bit of interesting set up I guess. It also, it falls over pretty easily. It doesn’t take a lot, so, but. It will be fine in the end. So, let’s talk about some news. There’s a bunch of news stories that I posted in the Airbnb news group as always, and one thing I want to start with is a story about Cuba, because the Cubans are making quite a lot of money with Airbnb, which is really cool I think ,because the Cubans life isn’t that easy over there, there’s a lot of restrictions on entrepreneurship, for people to make some money, so I think it’s really cool that Cubans are no allowed to sue Airbnb to make some extra money on the side. And they’ve been doing that because they’ve earned nearly 40 million dollars by hosting tourists in their homes since
Nicole: Since they started in 2015, so yeah, a couple years it sounds like. It’s been a long time coming, good for them.
Jasper: Yeah, exactly, the article lists some interesting figures. 40 million in revenue paid to Cuban individuals since April 2015. The average number of nights Cuban hosts share their space per year is 33. 164. Is the average amount paid per booking. The average age of the Cuban host is 43 years old. The average annual payout is $2,700. And 58 percent of Cuban air b hosts are women. So
Nicole: Hmm interesting
Jasper: So, some interesting figures. But what I also wanted to talk about is so, if used to to be not allowed for Americans to travel to Cuba, the only way to get to Cuba was you have to fly through Mexico you have to fly through Europe. Recently, they have eased it a little bit, there’s lots of direct flights to Cuba. I think jet blue was the first to open flights to Cuba. And a bunch of other companies followed. So now it’s very easy to fly there and as an American citizen you’re allowed to fly to Cuba. However, there’s a rule that states it must be 1 of 12 reasons – you can’t just go there to lie on the beach, it can must be for tourism, officially. Now, I don’t know —
Nicole: Everybody’s going for tourism, come on.
Nicole: Maybe that makes them feel better.
Jasper: Yeah, I don’t know how they check this. But in any case, the law states that you can only go to Cuba if the trip falls within 1 of 12 categories, and these categories are like visits with relatives, academic programs, professional research, and a bunch of other stuff. But one of the categories is what’s called a people to people trip, and while that’s in the category of educational, and basically it states that you can go to Cuba legally if you spent a significant amount of time on activities that produce meaning ful interaction between the traveler and individuals in Cuba. This article points out that if you’re staying at an Airbnb in Cuba then that could qualify as significant engagement interaction with a local because you’re staying at somebody’s house
Nicole: I would assume that nearly a high percentage are home sharing, they’re not going to be vacation properties by any means.
Jasper: Exactly, yeah.
Nicole: Right. I guess it is an education for sure, that’s if you want to go there. That’s what tourism is, you’re educating yourself. What’s surprising is that Airbnb, I haven’t seen any capitalization on this, you know, that you could be, breaking the law if you stay at a hotel, because what are you actually learning. Come to the homes, live with the people, find out the culture. Surprising they’re not doing that.
Jasper: Yeah, definitely
Nicole: Or, I haven’t seen it if they have.
Jasper: Yeah, I haven’t seen it either. I just saw it when I Was reading this article, but again, I don’t know if, if you fly to Cuba and you stay in a hotel and lie on the beach, I find it hard to imagine that somebody will actually track you down and find you or something. But according to the letter of the law, that would be breaking the law. For the people who, for their own conscious or just to be safe, they don’t want to break the law, then staying in an Airbnb would be a good option.
Nicole: Absolutely. Definitely falls within the twelve categories.
Jasper: And I don’t know ,have you ever been to Cuba?
Nicole: I haven’t but we have many friends who have been going, find it interesting – they said they find it interesting. Don’t go for too long though, I hear there’s not a ton to do from the stories I’ve been getting.
Jasper: I went in 2006, so about eleven years ago, and I don’t know if it’s changed a lot since then. But I had an awesome experience. I went for two weeks, I hung out at the beach in Varadero, it’s a tiny little strip that’s completely full of resorts and hotels, so it’s like for chilling on the beach basically. Then I rented a car and I drove through the whole county almost which was an awesome experience. I don’t know how much its changed but back then it was you pick up hitch hikers on the street, t was very few cars on the road, it was all these old American cars which was really col. I think I was sad to leave, I wanted to stay longer. It’s a big country still. I recommend renting a car and exploring the country and not just staying in Havana, or in Varadero for that matter. I think there’s a lot of cool things to see. I definitely recommend everyone to go there. But because also I imagine that in the future, things will probably change and now Cuba is like really unique, I mean where do you find cars that are made in 1930,40,50,60, you don’t find those cars on the road very much anymore.
Nicole: And all the amazing music that’s around, the live music. Are you planning to go back?
Jasper: I don’t have any plans yet. But it’s been ten years, so I’m kind of curious to see how things are going over there
Nicole: Yeah, I think you’re due
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Jasper: there’s another few articles that talk about china, Airbnb is supposedly there in deal talks with a local rival called Tujia. Which is the biggest rival in china. Airbnb is officially established in 2015 in china and it’s the second largest online travel market in terms of digital travel sales so it’s an interesting and big market for Airbnb of course. Other companies have had a lot of challenges and problems establishing themselves in china. Like Uber pulled out a while ago, google has had a lot of struggles there, so it’s interesting to see if Airbnb will be able to conquer that market. Instead of fighting the local competitors, apparently, they’re in talks with Tujia to strike a partnership to acquire them
Nicole: Right, if you can’t beat them, join them. But Airbnb has said their moving very slowly and carefully, they’re learning all the lessons of American companies that have gone in there before and maybe haven’t done that well. They’re moving slowly. Tujia is not that new either, and they’re pretty big. They were just valued at over 1 billion and they’re, this other article says they’re trying to raise 300 million more to try to expand their operations and they bought a lot of small companies along the way. So, they’re quite big. It would be a big win for Airbnb if they could partner with them somehow just because they’re that homegrown rental platform that’s so huge there. I read somewhere almost half a million properties on their platform, so that would be great. Of course, they’re saying no comment they’re not, Nick Papas hasn’t said anything about what’s going on.
Jasper: It’s interesting that Tujia is valued at 1 billion dollars and Airbnb in March this year raised 1 billion dollars.
Nicole: Yeah, so Airbnb is quite bigger
Jasper: Maybe they’ll use that billion dollars to buy them.
Nicole: Yeah yeah
Jasper: They’ve also appointed, finally appointed, a head of operations. A gentleman by the name of Hong Ge, so they seem to be serious about making something happen there in the very new future
Nicole: He reports directly to Brian Chesky. They had a long executive search, its says. They had some body from the US out there for awhile it sounds like and finally bit the bullet and brought on somebody local who knows the market, so this could be getting closer to that partnership
Jasper: Exactly, yeah. This guy, has a Yale university graduate. He’s worked at Facebook and Google, so has definitely got some experience in the tech space. There’s another article that came out on e-marketer that talks about the traffic that various hotel and accommodation sites have received in q1 of 2017. And for the first time ever, Airbnb is the number one on that list. Airbnb drew 107 million visits, which is an increase of 31 percent from 2016.
Nicole: Very cool, that more than booking.com which was at 92 million, and much more than these big hotel companies, which were less than half the visits. Very impressive. Oh, wow. Even HomeAway, which is at 26 million, so it’s a quarter.
Jasper: Yeah, so Airbnb has 4x more traffic than HomeAway. Trivago is number 9, VRBO is number 6 at 42 million, so VRBO is quite bigger than HomeAway but they’re the same company. I guess if you add, well, I don’t know how they count the visits, but if those are unique visits, then VRBO plus HomeAway together would be about 66 million which would be about 60 percent of Airbnb. But I wonder if anyone is ever going to regain the number one spot, I wonder if Airbnb is going to be the number one for a very long time. I imagine they probably will be
Nicole: Yeah, they’re very distinct compared to all the other companies, which for, lack of a better word, are kind of dinosaurs in the travel industries. So, Airbnb is the newest, the freshest, it says that millennial users are the ones that are visiting, so I mean why would they go backwards, why would they visit these older ones? So, what I would see is somebody new taking the Airbnb spot potentially at some date, but not one of these people moving up, one of these companies.
Jasper: Yeah, because if you look at the growth percentages, which are also listed. Airbnb’s traffic, this is q1 2017 versus q1 2016, Airbnb’s graphic grew 31 percent, booking.com only grew 7 percent, hotesls.com only grew 3 percent, Marriott only grew 8 percent.
Nicole: But look at HomeAway, 20 percent
Jasper: So, I don’t see any of these overtaking Airbnb any time soon. As you mentioned, they did a survey of internet users in north America. 30 percent of respondents aged 18-34 used sharing economy services that gave them a place to stay such as Airbnb, compared to 11 of those older than 35. The people that are using Airbnb is quite a younger crowd. I imagine the people that are younger than 18, they’ll start using the sharing economy even more than those people, I imagine. Let’s say you’re ten years old now, you’ve never lived without their being sharing economy platforms available, it’s part of your upbringing.
Nicole: Right, right. Speaking of underage, I’m just going to throw this out – we got a request from two Chinese students to come stay at our home in Los Angeles and we had to decline it because they said were not 18 and were coming unaccompanied and were coming to look at colleges from china. And they were underage, at this point they have to bring a chaperone on any platform, except for maybe a hotel. So that’s the younger generation for sure.
Jasper: So, we should probably see more growth when it comes to Airbnb and other sharing economy platforms.
Nicole: MH, absolutely.
Jasper: I love sharing economy platforms.
Jasper: Awesome, let’s see. I didn’t really see much other news. Did you have anything you wanted to mention
Nicole: Uhm, No…oh, Barcelona. Barcelona is cracking down, which I thought was very interesting that they have people on the street cross referencing some of the illegal rentals, illegal short-term rentals In Barcelona, that was really interesting I hadn’t seen that before.
Jasper: Yeah, the city has doubled their inspectors from 20-40, and they’re even planning to get it up to 100 by next year, so 100 people walking around the streets trying to find illegal Airbnb listings.
Nicole: Wow, they really must be having some kind of housing shortage there. You hear of crackdowns in cities, but you don’t hear about people on the cities, the employees actually trying to crack down.
Jasper: Yeah, I guess there’s quite a bit of local resistance there. According to the council, there’s 16,000 rentals in the city, in which nearly 7,000 are unlicensed. But they’re also planning to not renew any license, so the license that are out there are also going to expire. So, it seems like they’re really looking to completely ban any sort of home sharing from the city.
Nicole: And of course, Airbnb says whatever their housing problems are, they’re not part of it. They’re actually helping some of the locals have more income and help their quality of life, so, I don’t know. Maybe Barcelona needs to take a good look at themselves and see what’s going on with their housing.
Jasper: That’s always kind of the debate, right? Whether Airbnb takes properties off the residential market which drives the prices, or people renting out their spare rooms or renting out their apartments when they’re out of town temporarily is helping them pay the rent. That’s always the discussion that’s going on between Airbnb and enthusiasts and opponents.
Nicole: Yeah, yeah.
Jasper: Awesome, well thank you so much Nicole for joining us.
Nicole: Thank you, Jasper.
Jasper: I hope everything is going great.
Nicole: Yeah, very good. We just launched a new user interface, so it’s been keeping us busy and we’ve been getting some great feedback. We kind of upgraded for mobile because 75 percent of our users are using the guidebooks on mobile. So, it’s been a busy time for us there, and lots of new features, so it’s been great.
Jasper: Awesome, that’s good to hear. Well, thanks again. Ill speak to you in a few weeks. For the listeners, thanks for listening. Go check out the audiobook on Audible if you’re interested and we’ll see you back in a few days, Bye bye.