The hotel lobby has crossed a line this week with an ominous ad linking Airbnb to terrorism. Airbnb spokesperson Peter Schottenfels referred to the commercial as ‘an outrageous scare tactic’ and argued that the big hotels sponsoring the ads have lodged terrorists themselves.
Today Jasper is joined by Noah Neiman, Hostfully Co-Founder and Head of Product, to offer their takes on the tenuous argument made in the attack ad and share their recent adventures dealing with short-term rental hosts making unexpected requests. They also cover the incredible growth of Tujia, Airbnb’s Chinese competitor, and the staggering boost in Airbnb bookings associated with the solar eclipse taking place August 21st.
Listen in to learn how Airbnb CEO Brian Chesky handles his lengthy to-do list, and how you might handle a bad review that stems from charging a guest for damages. Noah and Jasper conclude with a question from the Facebook group around Smart Pricing. Learn why Airbnb has an incentive to keep prices low and how you can use an alternative third-party service to determine the optimal price for your listing!
Article #1: New York City’s Hotel Industry Links Airbnb to Terror in Harsh Ad
Article #2: Ctrip Keeps Supporting Tujia ‘WeChat Hotels’ to Engage in Shared Housing
Article #3: Airbnb Expects its Biggest Night Ever in South Carolina Thanks to Total Solar Eclipse
Article #4: The CEO of Airbnb Starts Each Morning with a Simple but Effective Twist on the Standard To-Do List
Q1: A guest spilled red wine on my table runner. Should I take part of the deposit to cover the cost? I am worried about receiving a poor review in retaliation.
Q2: Airbnb Smart Pricing doesn’t reflect the optimal price for my listing. Why?
Email: [email protected]
This episode is sponsored by Aviva IQ. Aviva IQ automates messages to your Airbnb guests. It’s also free!
Complete Transcript for Get Paid for Your Pad Episode 176
Jasper: Welcome to Get Paid for Your Pad, a definitive show on Air Bnb hosting, featuring the best advice on how to maximize profits from your Air Bnb listing as well as real life experiences from Air Bnb hosts all over the world. Welcome.
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Jasper: Hi everybody and welcome to another news episode of Get Paid for Your Pad. Today we have a new co-host, he’s one of the co-founders of Hostfully and also the head of new products. So, Noah, welcome and thank you for joining.
Noah Neiman: Thank you Jasper.
Jasper: It’s good to meet you. Would you like to give a brief introduction and how you got started with Hostfully?
Noah: Sure. I got started with Hostfully as a co-founder. I’m a former apple employee and an engineer and an avid traveler. And when David and Margot, the other founders approached me with this idea, I thought it was fantastic. I used travel rentals as a renter and a host. And as a renter, I found the whole arrival process, the check-in process, the experiencing the local environment process frustrating. You’d get there and there’d be a 3-ring binder with laminated sheets stuffed with all kinds of different information, I’d read it and be very disappointed in content and quality. When David and Margot approached me with this concept of an app that would effectively replace this binder guide book and I thought, man, this is a brilliant idea.
Jasper: That’s great. Before we go to the call, we were chatting a little bit, you had an interesting experience in your travels using VRBO in France. Do you want to elaborate a little bit on that?
Noah: Yeah, yes. I found a VRBO in France and it seemed like a beautiful place and the price was much better. So, I booked a VRBO and I booked the two Air Bnbs on the same trip, one in New York and one in Paris, but the VRBO didn’t have the payments enabled. In trying to pay for the listing, the owner wanted me to do a bank transfer, which for Europeans is simple, but for Americans it’s expensive and challenging and I wasn’t sure if this was right, so I didn’t want to do it ahead of time. She wouldn’t take credit card or a pay pal, so I thought I’d pay with cash. So, I arrived with two 500 euros, and she wouldn’t take them, she said they were too large. So, she made me go to the bank to get smaller denominations — half the banks are closed, the other half wouldn’t exchange because I was a customer. It points to the challenges the guests and the hosts have not using Air Bnb and the Air Bnb payment system. Compared to staying in a hotel, this would never happen. I think it’s something hosts should be aware of to try to make their accommodations more efficient for guests.
Jasper: Yeah, it’s interesting. I don’t understand this. If you book on VRBO, you’re supposed to pay through the platform?
Noah: You can, but she didn’t have that enabled. IT’s an option and it’s relatively new. In the past, fortunately I’d pay with a check or Paypal. But those wouldn’t work in this instance either. So, cash was my only option.
Jasper: How does VRBO make any money then?
Noah: They make money just from the listing. The hosts pay to be on there.
Jasper: Right, got it. Okay. I had an interesting experience too, I stayed in NYC for two and a half weeks, and I was sharing it with a friend – it was $3,600 for a two week stay in a really nice apartment in SoHo. Then, after I left, the host hit me up with a $300 cleaning fee. He didn’t charge the cleaning fee to begin with, I figured it was just included in the price. He sent me a request and he responded and I said he should be charging the fee ahead of the stay, otherwise include in the price. HE was telling me that the apartment was dirtier than he could expect. But anyway, I’ve never had that happen before. Maybe he told Air Bnb and he’ll try and claim that money. Let’s dive into the news of this week, I think there’s one that’s been dominating the news. The recent ad the hotel industry has created. I think it’s going to air July 31, by the time this goes live it’ll have been airing for a few days. They’re putting Air Bnb in a very dark place, they’re trying to relate it to terrorism now, because apparently in Manchester when there was a terrorist attack, that person probably stayed in an Air Bnb. Now they’re saying Air Bnb is dangerous, you don’t know who’s in your building, are you safe? That kind of stuff. It’s kind of crazy. What are your thoughts on that?
Noah: I think it’s a giant mistake for whoever is paying for this ad. The risk that this comes back to reflect negatively on them is rather larger. The terrorist did stay in a short-term rental, but it was not an Air Bnb, so the link is even less. I don’t know.
Jasper: That’s a good point. I didn’t see that it’s stated in the article, it wasn’t even an Air Bnb. Even if it was. Has a terrorist ever stayed in a hotel?
Noah: Exactly. Or eaten at a fast food restaurant? Or gotten gas?
Jasper: Took the train? Took a bus? Went to the supermarket? The message is when we wake up in the morning we should lock the door and stay in bed all day, because we’re not safe.
Noah: I’m surprised someone paid to make and run this ad. I won’t be surprised if it gets taken down shortly after its put up.
Jasper: There’s an Air Bnb spokesman, Peter Schottenfels, he responded to the ad, he said it’s an outrageous scare tactic by hotels, who themselves have the history of acts of terror. The short-term rentals are the one place safe – he said that some of the terrorists involved in Sept. 11 were staying in hotels. It’ll be interesting to see how this goes down, but I think they’re crossing a line here.
Noah: Yeah, I agree.
Jasper: Anything else to share on this topic?
Noah: Just that to reiterate that I wouldn’t be surprised if this ad didn’t run for very long, if it runs at all.
Jasper: There’s a news story about one of Air Bnb competitors in China, called Tujia, and it’s going very fast. It saw triple digit growth since 2016, which means its growing much faster than Air Bnb at this point. One of the interesting things is the way they distribute, they tied up with a very popular messaging app in China, and they also partnered with C-Trip, a big travel website, compared to Priceline or Kayak, they’re using these channels to distribute the listings. I was kind of thinking, it would be interesting for Air Bnb, searching on all these search engines, why not add vacation rentals? Google did that. It would be interesting.
Noah: I remember two years ago with Air Bnb, they mentioned that growth in Asia was their main goal. I haven’t seen numbers to support in the last two years I see a lot of local competitors trying to emulate Air Bnb model, I see other industries failing without a local partner and I wonder if Air Bnb is going to go that route or try to go it alone.
Jasper: It’s very hard, you see it like in China or Brazil as well where the government is involved in a lot of the businesses. There tends to be a paramount of corruption as well. It’s hard to get businesses to grow. We’ll see. Air Bnb is expecting its biggest night ever in South Carolina. There’s going to be a total solar eclipse. Have you seen one?
Noah: I have seen one. In Germany. In 2000. If anyone has the opportunity to see this eclipse I recommend you go. I wouldn’t be surprised if Air Bnb broke a record in many states. The eclipse is going to start in Oregon and travel across the United States.
Jasper: It’s going to happen on August 20. There’s still plenty of time to find a place if you’re interested in seeing it. They’re expecting bookings on Air Bnb to be 5x higher than usual, so that will probably drive the price.
Noah: As you can expect, the eclipse isn’t in metropolitan areas. The places where it’ll be are rural places. The hotels are probably quickly filled up. It’ll give residents the opportunity to rent our bedrooms on Air Bnb. I encourage anyone who can see it to do so.
Jasper: Also for hosts who are staying in that area, these are the type of events you would miss in terms of raising your price. If you’re not aware this is going to happen and suddenly everyone is raising your prices. This is how I find out about some of the conferences in Amsterdam. I started looking into it and one of the biggest events in the country was the month my Air Bnb was being booked. There pricing apps, you can use —
Noah: Do you use any of the dynamic functions?
Jasper: I’m always using Beyond Pricing.
Noah: Did it work for you?
Jasper: This was before these apps existed and I was spending hours weekly trying to optimize prices and uses formulas.
Noah: Gave you tried the Air Bnb internal service?
Jasper: I have. I got a question from one of the listeners about the Smart Pricing app, and we’ll get into that after the news. We have a few more articles to go through. I find a funny article on the business insider about the morning routine about Brian Chesky, the Air Bnb CEO. I always find it interesting to get a glimpse, obviously it’s pretty crazy. He has a morning routine. He makes a list of everything he wants to accomplish in the morning. Then groups the tasks together. Then says, “what action could take care of all the items in the group.” Then you refine until you have just a few tasks. You don’t need to do all those 20 things, I do 3 big things and the other things will happen as outcomes. IT’s similar to one of the investors on Shark Tank, I find it pretty interesting. People who have ideas, they pitch them to investors, it’s interesting to see their analysis. Barbara, she has a similar way. Do you ever use To-Do lists?
Noah: Absolutely, it’s critical. Brian uses an app or software or pen and paper?
Jasper: It doesn’t say. Do you use an app?
Noah: No, I use notes and a notebook.
Jasper: Old school.
Noah: Old school. I mean, we use software and features for Hostfully. We have projects in that software.
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Jasper: Awesome, so let’s go into the questions being submitted by listeners. I picked a few. The first question has to deal with turning in damages, this question is from Brooke from the Get Paid for Your Pad Facebook group that you can join if you want. There’s a guest who spilled red wine on the table runner. The runner cost $35, I have a $100 security deposit, but I’m afraid my guest will write a bad review in retaliation for taking part of the deposit. That’s a good point. I’ve never been charged any money after I stayed in Air Bnb, and now that the host is trying to charge me $300, I haven’t written my review yet, and I feel like it’s unfair and it influences my opinion on my host. I haven’t decided what I’ll do for my review. The question really is, should I ask for that money back or not?
Noah: My thoughts are that I should. I wouldn’t want to set that precedent. The risk is real for the review, but with Air Bnb mediation, you could request that review be moved because it’s unfair. It’s something I struggle with, when I have less than 5-star experience, what do I do? I want to protect future travelers, I want the host to be better, but I feel guilty about leaving a 2-star review.
Jasper: I think in this case, the cost is $35, the person has the security deposit. I’m not sure if everyone understands how it works. I’ve never charged the deposit myself. When you charge the deposit, you’re not actually guaranteed to receive that money. Before the next guest arrives, or within 14 days, you have to request the money and the guest can choose to accept or decline, if the guests declines, then Air Bnb will mitigate, or get involved, and come to a resolution. Even if you’re charging it, you’re not guaranteed to get that money. You have to supply documentation. For all the hosts out there, if you have damages, take pictures and put in your claim immediately before your next guests arrive. That can be a tight window. I used to have back to back all the time. You only have a few hours sometimes to put in the claim. If you’re hosting and you have a cleaning person and you might not be aware of the damage, that’s the reason you’re using the deposit, you want to be refunded for damages. Also, this host isn’t making a lot, the total amount of the stay was $120. That’s like 30 percent of the stay. Like, my stay in New York was $3,600, and if I break a wine glass, which I did, and the host is trying to charge me for it, if I’m paying that much and break like a $5 wine glass, but if you’re losing 30 percent off the amount you’re receiving, you should get that covered. I wouldn’t worry too much about the review. You can respond to it, I think the response is based on the fact that I charged for damages, which I think is fair. I think people understand if you have tons of good reviews and then one bad review, it won’t destroy your business. I think everyone knows that it’s hard to satisfy everyone. Having the odd 4-star review isn’t a big deal.
Noah: I do wonder about the super host status; my understanding is one negative review will remove you from the program.
Jasper: No, you need 80 percent 5-star reviews. Let’s say you have 10 groups of guests, ten reviews. You have 8 positive reviews, you have eligibility for the program. You’re referring to cancellations. If you cancel one reservation, you can’t be a super host anymore unless you contact Air Bnb and explain some extreme circumstance. Let’s move on. I have one more question I want to address that has to do with Air Bnb smart pricing. This is from Nina. Her pricing constantly suggests lower pricing that doesn’t give the optimum price for her listing. I think that’s correct. I’ve heard this a lot and noticed it myself. You have to think about the interest of the guest and the host, they’re not in a good position to advise on pricing, so they generally recommend a lower price than is optimal because they want to keep guests interest. They like to brand Air Bnb as lower than hotels. It’s in their best interest to keep the prices lower. Do you have experience with this?
Noah: Anecdotally, I’ve heard the same. I can see how there’s a conflict for all the reasons you mentioned. Air Bnb wants to steal dollar share from hotels, there’s a big conflict between those two groups, as the story we mentioned earlier points to. Air Bnb does have incentive to keep prices low. I recommend using a third-party service to see if they’re more accurate for her listing.
Jasper: I’d recommend that as well. Thanks Noah for co-hosting this episode with me. Good luck with everything at Hostfully. I hope to speak to you again another time.
Noah: Thank you Jasper. It was nice speaking with you.
Jasper: All right, and for the listeners, thanks for listening. And of course, Monday, there will be another episode of Get Paid for Your Pad. I hope to see you then.