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EP188: This Week in the World of Airbnb

Sometimes you get away because you want to, and sometimes you get away because you have no choice. Airbnb news this week features stories of both—from Americans heading to Britain to enjoy an affordable escape to Floridians fleeing the imminent threat of Hurricane Irma.

Jasper is joined by Glenn Carter, Head of Marketing at Hostfully, to discuss the incredible jump in Airbnb visitors to Britain since Brexit, as well as the heartening story of the Miller family who found refuge from the hurricane barreling toward Florida with an Airbnb host in Indiana who offered his listing for free. They also cover the fire at a New Zealand Airbnb that sent its Malaysian guests to the hospital, highlighting the need for safety precautions and the difficulty of enforcing the Responsible Hosting Guidelines.

It wouldn’t be a Get Paid for Your Pad news episode without the latest developments in vacation rental regulations, so Glenn and Jasper are duty-bound to discuss the German host who managed to get away from the municipality’s very strict Airbnb rules via a lawsuit against the State of Berlin, and a rule-following host in Iceland who learned why so many hosts list on Airbnb illegally.  Finally, they explain the surge in cryptocurrency startups who seek to get away from platforms like Expedia and Airbnb entirely, using blockchain technology to decentralize the travel industry.

Topics Covered

Article #1: Airbnb Host Waives Cost for Jacksonville Family That Evacuated Due to Irma

  • Airbnb activated Disaster Response Program (through September 29th)
  • Free listings in NC, SC, GA, AL and IN
  • Miller family from Jacksonville traveled 795 miles to New Albany, IN
  • Kids have special needs
  • Brought pets
  • Airbnb host Brandon Thompson waived fee for family

Article #2: Airbnb Urges Housing Reform in Berlin After Court Overturns Permit Rejection

  • Very strict short-term rental regulations in Berlin, steep fines
  • Host took State of Berlin to court and won
  • Judge granted permit to rent for 182 days/year
  • Municipalities willing to compromise will see increase in tourism dollars
  • Efficient use of space when resident on holiday
  • Location-specific rules based on tourism, location

Article #3: An Airbnb Owner Speaks Out

  • Airbnb host in Iceland travels with circus for work
  • Out of country up to six months/year
  • Following rules, complicated permitting process
  • Commercial operators should be taxed as businesses

Article #4: Christchurch Airbnb Fire a Wakeup Call for the Accommodation Industry

  • Malaysian family hospitalized after fire in New Zealand Airbnb
  • Did not have fire escapes, other safety measures
  • Airbnb encourages hosts to install smoke alarms, carbon monoxide detectors
  • Hosts also urged to provide fire extinguisher, evacuation plan
  • Difficult to enforce Responsible Hosting Guidelines
  • Airbnb providing 36,000 ‘free’ smoke detectors
  • Debate around adhering to same safety standards as hotels
  • Could be easy win for Airbnb

Article #5: Airbnb Sees 80% Jump in Visitors to Britain

  • Influenced by Brexit, decrease in value of £
  • More affordable for Americans, Canadians
  • Average UK host makes $4,000 /year (36 nights)
  • Average age of host is 43
  • Fifth largest geography for Airbnb globally
  • Benefits for growing # of hosts over 65 (e.g.: supplemental income, social aspect)

Article #6: Winding Tree is the New Kid on the Blockchain Set on Disrupting Airbnb and Expedia

  • Envision world where platforms out of picture
  • Seek to decentralize travel industry, all done on blockchain tech
  • Startups raising millions of dollars
  • Would eventually make Airbnb obsolete

Resources Mentioned

Article #1: abcnews.go.com/Lifestyle/airbnb-host-waives-cost-jacksonville-family-evacuated-due/story?id=49765932

Airbnb Disaster Response for Irma Evacuees

Article #2: techcrunch.com/2017/09/08/airbnb-urges-housing-reform-in-berlin-after-court-overturns-permit-rejection/

Article #3: grapevine.is/mag/interview/2017/09/06/an-airbnb-owner-speaks-out/

Article #4: stuff.co.nz/business/96709482/christchurch-airbnb-fire-a-wakeup-call-for-the-accommodation-industry

Airbnb Responsible Hosting Guidelines

Article #5: usnews.com/news/technology/articles/2017-09-11/airbnb-sees-80-percent-jump-in-visitors-to-britain

Article #6: thenextweb.com/money/2017/09/08/1075124/#.tnw_hBqgZfRx

Winding Tree

“This is the First Real Estate Development to Accept Bitcoin as Payment” in Fortune

Airbnb News Facebook Group

Connect with Jasper

Email: jasper@getpaidforyourpad.com

Twitter: @GetPaidForUrPad

Instagram: @GetPaidForYourPad 

Facebook: www.facebook.com/getpaidforyourpad

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Complete Transcript for Get Paid for Your Pad Episode 188

Jasper: 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.

AD: Before learning about Aviva IQ, I used to spend so much time managing my guest communications manually. Now, with Aviva IQ’s automated service, my workload has reduced by 80 percent. Did I mention its free? Automate your Airbnb messages now at www.AvivaIQ.com.

Jasper: Welcome to Get Paid for Your Pad. My name is Jasper, I’m your host and today I’m hosting this episode with the one and only Glenn Carter, head of marketing for Hostfully. Glenn, how’s it going?

Glenn Carter: It’s going good Jasper. How are you?

Jasper: I’m good, man. Are you safe from Hurricane Irma there up north in Toronto?

Glenn: Yeah, I’m in Montreal and we are very far away from the tragedy that’s unfolding down south. It’s amazing watching the footage on the news about what’s going on.

Jasper: Yeah, it’s crazy. Actually, my country was affected a little bit too. We have a few tiny islands in the Caribbean. One of them is called St. Martin. I think about 70 percent of the infrastructure has been wiped out. It’s pretty horrific the damage down there.

Glenn: There’s just getting down to planning the disaster response. And what a massive undertaking that will be.

Jasper: Of course, and as always Airbnb has created a special page where people can either find shelter or as an Airbnb host you can sign up to provide free accommodation to people who had to flee for the storms. If you google hurricane Irma Airbnb, free listings, I’m sure you’ll find it. I took a look at the website. There’s quite a lot of homes being offered for free. All across the south east, actually. There’s people offering up their homes along North Carolina, South Carolina, Georgia, Alabama, even in Indiana. There’s actually an article on ABC News that talks about a family from Jacksonville. A family of four with two dogs, the children have special needs. They drove 795 miles to stay with Mr. Thompson in Indiana. He offered this family to stay at his home for free. A little shout out to Mr. Thompson. He has a dance studio called So into Dance. Props to him for having this family and letting him stay for free.

Glenn: For all those Airbnb hosts out there that still have space, there’s still time to sign up. I know Airbnb is waiving all their service fees to book properties in these areas. I think up until the 28th of September. I encourage all Airbnb hosts out there to contribute and offer up some space.

Jasper: Yeah, September 29.

Glenn: Okay

Jasper: Let’s see, there’s a little success story in regulation land. As most people probably are aware, Berlin is one of the places in the world where Airbnb has been made almost impossible, especially if you want to rent out an entire home. There’s very strict regulations on Airbnb hosting in Berlin, and very high fines, up to 100,000 euros. There’s one host who didn’t agree with the strict regulations. He took the state of Berlin to court because he wasn’t allowed to rent out his home on Airbnb. He didn’t get a permit and he didn’t take no for an answer. He took the state to court and he won. The court ruled he should be allowed to rent out for 182 days a year. Which is interesting, because that’s exactly half a year minus one day. I guess the thought from the judge was, if you live in a house and you’re away, you should be allowed to rent out your place so that space can be used efficiently and doesn’t rest empty. The limit was set at less than a half year, I guess 182 days is just less than half year. It’s an interesting time frame, especially when compared to other cities London and Paris where it’s like 60, 90, and 120 days

Glenn: It was interesting to see this number, because like you mentioned Jasper, in other areas, they were much lower than 180 days. For Berlin being so anti- Airbnb, going 182 days was a bit change of heart. The decision was from the Berlin administration court. It was good for Airbnb because it overturned the initial decision that effectively banned short-term rentals. In order for other Airbnb hosts now to be given the same permit, they’d have to go through the same court process, which isn’t really sustainable. But it’s a step in the right direction. It’s a tone that other municipalities across the globe are taking to compromise. If it’s your primary residence you should be able to rent it out for a certain period of time. I think it’s definitely a step in the right direction. I think for major European cities as well I think this is going to give more accommodations options for tourism as well. I think there was another article about the UK and how there’s been a surge in Airbnb hosts there. I think municipalities are going to realize as well that as they learn to compromise with Airbnb, they’re going to see an increase in tourism dollars which helps out their local economies.

Jasper: Yeah, exactly. That’s an interesting discussion to have. I think most people agree that outside of the busy cities, the larger cities, people should be allowed to do Airbnb. If you own a property then, I believe you should be able to do whatever you want. I can see the arguments against that in the larger cities where there’s a housing shortage. But I think outside of the larger cities everyone can kind of agree. Right? But then the question is, how long should be people be allowed to rent out in the busy city centers? I guess the general consensus is that if you live somewhere and you go on holiday, you should be allowed. It doesn’t help anyone that your apartment is sitting empty. That’s the whole idea of Airbnb. It’s using resources in a more efficient way. Empowering people to make that space available when they’re not using it so other people can use it. I think that’s the part that everyone agrees on. I think that what not everyone agrees on is then how long should people be allowed to do that. Because it’s one thing to rent out your place when you’re on holiday and it’s another when an investing firm buys up a bunch of apartments, lists them on Airbnb without the intention of ever living in the space. I think those are the two ends of the spectrum, and most people will pick some point in the middle. Some people will say 30 days is reasonable, who goes on holiday for more than 30 days. But then, there are people who travel a lot for work. For example, there was an article about a host in Iceland, which is an interesting article because this is a host who wants to play by the rules. Her name is quite complicated to pronounce, let’s call her Maria. She works for a circus and she has to travel a lot for work. She might be out of the country for 3,4,6months. If there’s a rule that says that you can only rent out one month, that means the apartment is going to sit empty for the other time she’s out of town, which again, doesn’t really help anyone. This is a complicated discussion. What are your thoughts on that, Glenn?

Glenn: I think more and more people are traveling for work and I agree that people should be allowed to do with their own property assuming they’re not affecting anyone else’s ability to enjoy life. In condo buildings, I see the argument, where if I live next to an Airbnb rental, every couple day there’s new tenants in there. I live in Montreal, it’s a big party city. A lot of young people here. I can see the argument where if I own a condo in a high-rise, I don’t want to be living next door to that. On the other side of the coin, there should be a certain amount of days, I should be allowed to rent out my own property while I’m away. That gives me some extra income I can spend in the local economy. On the commercial side, it’s tricky. It’s not as cut and dry. Commercial shouldn’t be allowed while home owners should. I’m just thinking beach communities, some of the biggest businesses, and these communities are beach rental properties. Are we now saying that they should be allowed on the Airbnb platform because they’re commercial operators? I don’t think so. They’re huge providers of jobs in these communities and they drive a lot of tourism dollars in the local economy. I think it’s a difficult discussion to have. There’s a lot of grey areas. I think Berlin is a step in the right direction, and cities are realizing there’s a lot of compromises. Back to commercial operators, I’m not saying commercial operators should be treated the same as hosts, they certainly should be paying the same taxes that a hotel would. As long as they adhere to municipal guidelines and bylaws, I think they should be allowed to operate on Airbnb.

Jasper: And you think that should be the case as well for busy city centers? Like downtown Manhattan, places Like that?

Glenn: It depends. It’s a case by case. Which is why I’m really encouraged by seeing Airbnb negotiate at local level with these different municipalities. What’s true for beachfront San Diego isn’t true for Manhattan. I think downtown Manhattan might be a different story where someone shouldn’t be allowed to buy up – maybe like Vancouver where housing prices are sky-high and so are rents. Should someone be able to buy up an entire floor of a condo building and do Airbnb instead of long-term rental, thereby putting stress on the already tight long-term rental market? Probably not. I think in most cases, like I mentioned before, it’s a case by case basis based on municipality and tourism industry. I think negotiating and coming up with location specific regulations is a smart idea.

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Jasper: There’s been an incident in New Zealand where a family from Malaysia, a family of ten, was admitted to a hospital after suffering from burns and a smoke annihilation after escaping a fire in a 3-story summer house in a neighborhood called Clifton Tyce. The house was completely burned down. This raises the issue that’s being discussed as well. The issue of safety. Airbnb has been advocating hosts who install safety equipment, but obviously not everyone is doing that if you’re renting out a room or a small house, are you really going to install smoke detectors and carbon monoxide detectors and fire extinguishers and create evacuation plans. For most people that’s a step too far. I’ve never seen it in the Airbnb’s I’ve stayed. But Airbnb now is stepping up the efforts to make people aware of the safety situation in their Airbnb. They’re talking about providing 36,000 smoke detectors for free. But the article states that on the website on the terms of conditions, it means the cost of the alarms will be deducted from future hosts payments. It gives rise to a discussion about what extends to Airbnb providing the same type of safety precautions as hotels do

Glenn: I think there’s an opportunity for Airbnb to step up here. I know they have responsible hosting guidelines and those adhere to safety precautions and government safety regulations. I don’t know if they’re enforcing that or if there’s way to enforce that. If I have a long-term rental property in Montreal, every couple years, I have to submit a document to the government saying I have updated safety equipment, saying I tested everything and it’s up-to-date. I don’t know if that’s something that Airbnb can enforce or wants to enforce, but I think there’s an opportunity for exactly like you said to provide free fire detectors for hosts that want them. They did the photography thing for a long time. There’s an opportunity for Airbnb to step up. It’s going to happen again. The Airbnb critics are going to jump all over it, showing it’s, an example of wayward capitalism and unregulated, illegal rentals gone bad. I think Airbnb should be getting in front of this.

Jasper: the hotel industry has always argued that Airbnb should be exposed to the same regulations as the hotels are, which I think isn’t a valid argument. If you have a hotel building with 50-100 rooms, that could be a labyrinth to find your nearest exit. If you’re staying in a small apartment, you know where the exit is, you know where the front door is. You don’t need a safety cart with information about evacuation routes. Just run for the door.

Glenn: I mean, comparing someone’s condo that’s an Airbnb rental to a hotel is completely ridiculous. Most hosts in first world companies there are guidelines for insurance purposes. I know my building here in Montreal, they come every year and test the fire alarms. I know it’s a case-by-case basis. It’s an easy win, at least on the fire side, it’s an easy win to provide fire detectors to Airbnb hosts who want them.

Jasper: Absolutely. Let’s see what else is out there in the news today or this week. Britain is a very popular place for travelers using the Airbnb platform. Airbnb has seen an 80 percent jump in visitors to Britain in the las year which is quite the substantial increase. Apparently, this has to do with the value of the pound going down quite a bit as a result of the Brexit. One pound now equals 1.33 US dollars where as a couple years ago it was 1.60, 1.70. So, Britain has gotten a lot cheaper for Americans. It’s going back to the 1950s where Americans could come to Europe and live like a king. So, a lot of Americans are taking advantage of that and traveling to England, not just Americans I guess.

Glenn: Don’t leave us Canadians out!

Jasper: I heard the Canadian dollar is doing pretty well, no?

Glenn: yeah, we’re actually doing pretty well. Our economy is rebounding nicely and our central bank is raising interest rates, which is good and bad. I’m thinking of packing my bags and taking a tour to London myself.

Jasper: I encourage that

Glenn: It was an interesting article. I was intrigued by the data it showed that the average UK host earns 3,000 pounds, which is about 4,000 US per year and they host an average of 36 nights per year. This drive home the point to me that this is mom and pop operations of people earning a couple extra bucks. $4,000 a year, that’s a lot of money to some, but we’re not talking about an extra income. This is ultra-part time. Not full-time rentals. Another interesting thing was this increase in activity in UK makes this the fifth largest geography for Airbnb globally. There’s lots of data to comb through, but the average age of the host in the UK was 43, so I found that quite interesting.

Jasper: Did you expect it to be younger?

Glenn: I thought it would be younger. But we’re seeing – actually the fastest increasing demographic was people over the age of 65 decided to host. Maybe retirees are looking for side projects to keep them busy and social. I’ve written about this before and I know you have as well, Jasper. While the sharing economy platforms are generally are a fantastic retirement gig for a lot of people. There’s so many benefits for staying social and active and meeting new people and supplemental income. It’s great for retirees.

Jasper: Absolutely. By the way, different topic, are you into Bitcoin or Blocktain?

Glenn: I’ve obviously heard of it, but I’m not overly familiar with it.

Jasper: There are a lot of platforms now that are raising money through these digital currencies. It’s called Winding Tree. These companies envision that in the future we won’t be needing centralized platforms like Airbnb to match demand and supply. They envision a world where this could all be done on the Blocktain technology. Obviously, we’re in the very early stages and it’s a big question mark if this is going to happen, but I did find it interesting because when you look at these companies, they’re raising a lot of money. There’s all sort of companies lining up in the Blocktain space and raising millions of dollars, which is kind of crazy and reminds me of the .com times and you had as tart up and you were doing something with the internet, just showing you were getting users was enough to get investors to pour money in the economy. Anyway, I’ve been talking to people behind AtLant, which is definitely an interesting platform. I don’t understand it. I’ve been talking to the people behind it. Hopefully I’ll get someone from it on the podcast to explain how it and Airbnb could be combined and how the Blocktain technology could make Airbnb obsolete.

Glenn: That’s a bold statement. I don’t really have an opinion on that because I’m not familiar with the technology. It’s definitely making a splash. There’s a condo in Manhattan that’s accepting Bitcoin as payments in the unit, and that’s the first time that’s happened.

Jasper: Bitcoin is definitely becoming more accepted in businesses. I will say that the question that I have is that do these businesses hold onto those or do they convert them back into local currency? Do the companies, for example, BitPay. If you order something online with bitcoins, what will happen is the intermediary will take the bitcoins and will sell them to the local currency and will provide the business owner with the local currency. In my opinion, I’d be interested to see if companies are going to allow payments in bitcoin and hold on to them. We’ll see what’s going to happen in the future. All right, Glenn. Thanks so much for joining me today and discussing the news in Airbnb. It was a pleasure and I look forward to talking to again in about 3-4 weeks or so.

Glenn:  yes, Jasper. You, too. I hope you enjoy Stockholm. Do you have any specific tourism plans on the go today?

Jasper: I’m here actually participating in a coaching program. I’m going to be working for the next few weeks, so not too much time for sight-seeing.

Glenn: All right, well good luck and great chatting with you as always.

Jasper: For the listeners, thank you for listening. I hope you enjoyed this podcast episode. And of course, on Monday we’ll be back with another one, so I’ll see you then. Bye bye.