Airbnb celebrates another win in its pursuit to target the business traveler, announcing a new partnership with co-working space giant WeWork. The convenience of booking a desk through the Airbnb app benefits both companies, and the move is sure to boost use for hosts with the Business Travel Ready designation.
Hostfully President and Co-founder, David Jacoby, joins Jasper this week to chat about this victory for Airbnb, as well as other success stories in the headlines, including a PR victory in the quick activation of the Open Homes program in both Las Vegas and California, and the report of Airbnb’s exponential growth in India.
But it wasn’t all rainbows and unicorns for Airbnb in the news this week. While the platform is making gains in India, it continues to struggle in the Chinese market. Jasper and David discuss how Airbnb’s biggest competitor in China is raising capital with an eye to expand overseas. They wrap up today’s episode with the story of a host who was arrested after his Airbnb guests discovered a hidden camera in the smoke detector. Listen in to understand what qualifies as a ‘surveillance device’ per the Airbnb Terms of Service policy and the smart lock technology available to hosts with security concerns.
- Wildfires in California (17 over 115,000 acres)
- 20 deaths, 1500 homes destroyed
- Airbnb activated Open Homes
- Airbnb could offer hosts gesture, incentive
- WeWork has raised $10B in capital
- Promotes WeWork through Airbnb
- Targets business traveler
- Potential discount on co-working space for Airbnb guests
- Chinese competitor raised additional $300M capital
- Looking to expand overseas
- 650K listings currently
- Could eventually match Airbnb
- Advantage in market of Chinese traveling overseas
- Airbnb experiencing rapid growth in India
- Easier to gain traction, more open economy than China
- India very poor country ($1,700 average annual income)
- Travel within India increasing significantly
- Room for Airbnb to grow
- Couple noticed camera in smoke detector
- Host banned from Airbnb, arrested
- Claimed not turned on when guests there
- Disclosure of surveillance devices required by Airbnb Terms of Service
- Unclear if one-way camera connected to doorbell would qualify
Email David at firstname.lastname@example.org
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Complete Transcript for Get Paid for Your Pad Episode 195
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.
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Jasper: Welcome everybody, another episode of Get Paid for Your Pad. Last week I was all by myself because I had some internet troubles, but today, I’m very happy to be hosting this podcast with the only and only, David Jacoby. David, welcome. How are you?
David: Hey, hey. I missed you last week, Jasper. I was up all night. You didn’t call you didn’t write.
Jasper: Were you worried about me?
David: I was so worried.
Jasper: Well, I’m still alive. I got back from a short trip to El Nido, which is in the Philippines, really an amazing place.
David: Sounds neat-o
Jasper: yeah. Did some scuba diving, just chilling out on some beaches.
David: Glad you had fun there and glad you’re back somewhere we can connect.
Jasper: Yeah, absolutely. I’m going to be in Tai Pei for two months, so I’ll have a stable internet connection, which makes my life a lot easier.
David: Awesome. All right.
Jasper: So, I heard there’s some stuff going on in California. There’s wildfires and stuff?
David: Yes, it’s crazy here. It’s serious stuff. This is probably the biggest fire in greater bay area in Northern California in a long time. The famous Oakland Hills fires years ago, but apparently, it’s worse than that. Even here in San Francisco you can smell it. My wife a couple of nights ago asked me if I could smell smoke. We looked all over the house to see if our house was on fire and we couldn’t find it, so we opened the door and we started walking around the block to see if any of our neighbors’ houses were on fire. I couldn’t believe it was coming from miles away, over the water. But the winds are strong, the fire is strong and people are being advised to stay inside here in San Francisco, but enough about here, it’s really devastating up north. Almost 20 people I heard have died. Homes are being destroyed. IT is a big deal.
Jasper: I’m reading here that at least 1,500 homes and structures have been destroyed by a series of 17 fires across 150,000 acres of land. That’s a large area. Airbnb has opened up their Open Homes program for those who are affected by the fires. This is the 6th time they’ve used the open homes feature this year. Just a wee, or so ago they opened it up after the terrible event that happened in Las Vegas. People can participate. If you google Airbnb open homes program, you’ll be able to find the link so people can open their homes from October 9- October 31. There’s already a good amount of people who have opened up their homes.
David: They did a great job moving quickly on this. The fire started happening Sunday night. By Monday afternoon the announcement had gone out, I think this is wonderful what Airbnb does. They implemented once a while ago and started implementing it more. I think they get a little too much credit compared to the actual hosts. It’s the hosts who should be getting a lot of the credit, it would be cool if they gave the hosts a discount or credit or coupon, because they are giving up actual paying guests potentially. A really big shout out to the bay area homes who have opened their homes to people who need it, as well as Las Vegas and Houston and Florida, as well as the other places. Some kind of credit.
Jasper: You make a good point. I guess Airbnb could offer some travel credit to the hosts opening their homes. Or offer them to forgo the 3 percent fee for a number of bookings.
David: There’s a bunch of things they can do. The world it really seems, is falling apart. I was speaking with a vacation rental management company in Barbados today and I was asking, how are you doing from Irma and the other hurricanes. She said we weren’t hit as bad, but enough about me, how are you doing in San Francisco with the fires? Between earthquakes in Mexico and fires, something weird is going on Jasper.
Jasper: Apparently there’s a typhoon coming up here in Tai Pei, so I might get my share of natural disaster as well. Let’s talk about We Work. Airbnb has partnered with We Work, the Airbnb for shared office space. I would say. Although it works different. The idea is you pay a certain amount of money per month, you get an office space somewhere. I didn’t realize this, We Work has turned into a pretty big company. They received a $4.4 billion investment from soft bank to see how much funding they’d received. This company was founded in 2011, that’s like three years after Airbnb, and they’ve raised almost $10 billion, most of the money coming from Soft Bank. That kind of shocked me. That’s a lot of money. They must be valued around $15-$20 billion, not that much less than Airbnb. Did you know they were getting so big?
David: They are one of the prizes, people call them unicorns, well over a billion. One point of clarification, they are less the Airbnb of office space and more of the business that gets spaces all over the country, if not the world, and you can go in and rent the space out. IT’s all owned and leased by one company as opposed to their other sites that are getting popular, Breather, it’s really more the Airbnb model where it’s local people, maybe have an extra office space and they want to rent that out to someone, like renting out a room on Airbnb. Just a clarification on the difference.
Jasper: That makes sense, thank you for clarifying. Airbnb and We Work declared their partnership but they didn’t discuss any details, but I imagine the way it works is that if you rent an Airbnb you can rent a desk at the We Work spaces for a couple of days for a good rate, is that what you imagine as well?
David: yeah, so you can do that anyway. You don’t need to necessarily have a We Work membership to work at a space for a day. They have different plans, you can get a monthly plan. You can use it for a day. It almost sounds like a cool advertising deal with Airbnb, maybe if you select you’re a business traveler, maybe it will serve up the option if you want the We Work space, too. I don’t know if you get a special discount, but I imagine Airbnb is getting some sort of commission on that. It seems like a win-win for the business traveler.
Jasper: I’d imagine, you’d have to get a discount, right? Otherwise, it’s nice for Airbnb if you get a commission. If you offer an incentive, way more people would actually use it.
David: I imagine way more people would use it anyways, cause not everyone is familiar with it. And if they’re on Airbnb and it says ‘hey, do you want free WIFI and a desk and a printer?’, that alone, just that you can do it in the confirmation process on Airbnb, that could be a benefit.
Jasper: It makes a lot of sense. I wasn’t too familiar with this We Work thing, but I rented, once I was in Paris and I rented an Airbnb and I had to record a podcast and the WIFI wasn’t strong enough, and I was in a rush, so I went on Airbnb and found a different apartment and messaged the host and asked to rent it one night, I just need it for a couple of hours and then, within an hour or so I was at the other Airbnb doing the podcast.
David: I’m really doing a podcast can I rent it, seriously?
Jasper: I was literally like I need strong Wi-Fi within an hour or two, I wasn’t sure where to go. I guess I could have checked out we work, but for the recording I need the space to be quiet. I need to be allowed to speak. A lot of these co-working spaces, you need to be quiet so you don’t disturb your people
David: They have a combination for open space and private offices if you want
Jasper: what do you think of the idea of adding Airbnb listings of renting out a spare room with a desk for a couple hours or the day?
David: For a couple of hours is kind of weird, and not in the Airbnb model. I think they’d really have to expand the filters and search options, you know, is it really going to be significant if you rent for the day. That’s what other sites are trying to make the niche for. Breather comes to mind, I feel like there are a few others. That really is focused on you need an office space for a couple of hours, or you need a big meeting, or you’re traveling and need a place for a few others. I think there are other companies trying to fit that specific niche.
Jasper: I think it’s really clear that Airbnb is trying to target the business traveler, it’s clear they’re looking for growth in that area. Talking about investments, Airbnb’s main rival in China, a company called Tujia, we’ve talked about I before. They just raised $300 million and now valued at $1.5 billion and they are looking to expand overseas. What are your thoughts?
David: That’s a huge announcement on their end. They really are ramping it up in the Chinese market. It’s an area that Airbnb has been trying to get a foothold in, they’ve been trying for a while, they had a couple of trips and falls, the person overseeing that left a few months ago. It will be interesting to see what happens. IT reminds me of Uber trying to make it into china. If you’re not local, it’s harder.
Jasper: The Chinese government definitely prefers the Chinese companies and probably puts retractions on foreign companies. It’s hard to do well in china, we’ll see how it goes. In any case, Tujia now has 650,000 listings, Airbnb apparently has 4 million now. With this investment, there’s a good chance they’ll be growing quite a bit. They could become bigger than Airbnb. China is a huge market. There’s 1.3 billion people there, if they manage to drive out the competition, like what happened to Uber, that could be pretty big. They have a lot of listings in japan as well and if they manage to take a bigger market share in some of the other Asian countries, the Asian market is huge if you include India as well, by the way there was an article about India. Airbnb is actually growing very fast in India. I was thinking about China and India. In terms of population, they’re almost the same now. I was looking at population growth twenty years ago, it was still a very big difference. But India has really caught up, and now there’s almost as many people. India is a very interesting market for Airbnb. It’s easier to get traction in India than China, the economy is a little bit more open as well. I think people in India are more western focused. On the other hand, India is a very poor country, still. I was looking at the average income, they are listing on the 140th richest country in the world out of 200, they have ab out $1,700 income per year, especially compared to the US at $57,000. They are growing very fast in India. For Airbnb, India would be a good bet to try and grow.
David: Yeah, absolutely. Travel within India is increasing significantly. Travel and leisure from locals as well as it is becoming a popular tourism destination. As well as medical tourism, people going to get some surgery or something. They can do it significantly cheaper there. There was a company that was the Airbnb of India for a while, called Stayzilla. At the beginning of the year they’d announced they were either sunsetting or pivoting, I checked out their website, it’s still up. I’m not sure what the change was. It seemed like things weren’t going well for them. IT feels like Airbnb is filling a big gap. There’s huge room to grow and I don’t know if there’s much competition for them
Jasper: I can see Airbnb becoming pretty big in India. Is there anything you wanted to mention?
David: Going back to the China Market. Not only is there big competition for travel within China, but all the local Chinese who are traveling overseas, that is a huge market as well. If Tujia gets it right and really grows as the trusted spot for locals, they can easily expand for listings outside of china, too. They really have a strong advantage to grow in the greater Asian countries and beyond.
Jasper: Absolutely. Let’s keep an eye out and see how they grow compared to Airbnb. Right now, it’s like 650,000 vs. 4 million, so Airbnb still has a big size advantage. We’ll see how it goes.
David: That’s for 4 million around the world, I don’t know if Tujia is focused on the world yet, I wonder what the comparison is in china or near china, it’s probably a lot closer.
Jasper: Mhmm, yeah. Absolutely
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Jasper: One news item that’s been in the headlines a lot, has to do with someone in Florida, an Airbnb host in Florida, had installed hidden cameras in Airbnb. There was a couple staying at the Airbnb and they were looking at the smoke detector and it looked weird, there was a camera in the smoke detector, and later, after the police came, they discovered a second camera. Obviously, Airbnb banned this host. The police have arrested him. His defense was that he was using the camera for private events. He wasn’t, he didn’t have them turned on when the Airbnb guests were staying there. But then the police noted that if that was the case, then why did he hide the cameras. It sounds very shady to me.
David: That definitely sounds fishy. It’s a bummer these stories keep popping up, and the press loves pouncing on them. There’s a million vacation stays and the random outliers get all the press. You don’t read the article that there were 999,000 stays last night and there were all wonderful. Obviously, this stuff happens and you need to watch out for stuff like that, I don’t know what else to say about that.
Jasper: The reasons I want to bring it up was because in the Airbnb terms of service, a host has to disclose any surveillance devices in the home. As you mentioned to me, if you were planning to install like a smart lock with a doorbell with a camera inside, what’s interesting to me is what counts as a surveillance device and how do you disclose it? Do you, can you just write it in your listing? I can imagine some Airbnb guests, I mean Airbnb guests are notorious for not reading the description, a lot of people won’t read it if you mention it in the description? What are your thoughts on the camera in the doorbell?
David: Absolutely, thanks for bringing that up. It’s something I’ve been looking into. I’m going to get a smart lock and looking into the different options and the video doorbells, so Ring is a popular one here in the United States. I’m looking into August, which has both a combination of a smart lock keypad and the doorbell. It’s a one-way video, so I can see them. So, if I’m traveling somewhere and my guests can’t get in, I can see who it is and press a button and unlock it for them. I don’t want to have to rely on a key that a guest might lose or a guest might forget to put back in a lock box. There is a slippery slope. I can see a guest thinking “now they know when I arrive, but always knowing when I’m coming and going.” I think one clear line is that this is outside, and not an invasion of privacy. This is having a camera that isn’t in the house, not hidden in the bedroom. Needing to put that in the listing, that’s fair, and I have no problem to say, “for your security we have this lock and video doorbell to make sure no unwanted guests are there.” I think it’s helpful to keep additional guests from coming. You rent it out to one person and then there’s ten, which may be against your house rules. It’ll protect you against that. Someone who might want to do something like that, if you advertise that you have this, now they’ll know better and go for another listing instead. I’ll keep you in the loop of how the decision-making process goes.
Jasper: How does this video doorbell work? Do you get a notification on your iPhone and you see me standing there and you have a button where you can open the door?
David: yes, that’s exactly it. With August specifically, it’s connected to the lock. Ring, the popular one, has a couple of cool bells and whistles, you can’t unlock the door, it’s just the doorbell. If anyone has other ideas, let me know. In addition, if there’s movement by your door you’ll get a notice.
Jasper: That’s pretty useful.
David: I like the idea of controlling everything remotely and the doorbell is connected to the lock. There’s a lot of different companies, I think that’s the next step for the vacation rental host.
Jasper: Awesome, well, we’ve already talked for 25 minutes, so, we have come to the end of this episode. It’s funny because before we started recording, David asked me if I had any questions from Airbnb hosts this week, and I actually have a lot of them because you were thinking we didn’t have enough content to discuss. But when you and me get talking David, it never stops.
David: Amazing how time flies like that, Jasper. Just one other thing I wanted to get a shout out to anyone who is heading to the vacation rental management association conference in Orlando next week. I’ll be there and I’d love to meet any listeners, if I could just send out my email it’s my name David@hostfully.com. Please let me know if you’re going to be there, I’d love to meet up for a drink.
Jasper: Awesome. And with that, we’ve come to the end of the episode. Good luck with the conference. I wish I could join you, but it’s a bit far away for me right now. Good luck, I’m looking forward to hearing some insights. For all the listeners, thank you for listening. I hope you enjoyed this episode and of course, we’ll be back on Monday with a new episode and next Friday we will be discussing the news. I hope to see you then. Bye-bye!