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What's the biggest hotel company in the world? According to Larry Mogelonsky in Hotels Magazine, it's Airbnb, which we tried twice recently in Vancouver and enjoyed very much.
Airbnb started modestly in 2008 in a San Francisco apartment, when Brian Chesky and Joe Gebbia offered up air mattresses for rent during a conference. Appropriately, they named their site Airbedandbreakfast.com, and after three people stayed with them, they decided to create a bigger website with more listings. Voila - from a humble start, Airbnb was born. Now, there are more than one million listings in 34,000 cities and 190 countries, and Chesky and Gebbia, each worth close to $2 billion, have landed on the Forbes list of billionaires.
Guests pay Airbnb up front when booking, and the money is not released to hosts until 24 hours after check-in. Those booking rooms or homes pay a 6-12% guest-service surcharge, depending on the listing. Bloomberg values the privately held company at upwards of $20 billion (U.S.).
We paid $100 per night for two different multi-day stays in East Vancouver near McFadden Park, and for each, we enjoyed an entire first floor for ourselves, both nicely appointed, and each included cooking and laundry facilities, providing us
with far more value than a pricier hotel at far less cost.
One property was outfitted in Canadiana decor with a large map of Canada above the bed, books on Canada displayed in a bookcase, and iconic Canadian beer bottles with flowers, a neat touch for foreign tourists.
One drawback, at this location - we did briefly hear the pitter patter of little feet above us, but that was actually fun, and our hosts had warned us and provided us with a complimentary bottle of wine and snacks along with a smart TV that could stream every movie imaginable.
The hotel industry does not like to acknowledge the level of impact that Airbnb is having on the lodging industry, but my guess is that it's comparable to the taxi industry with Uber.
The Hotel Association of New York City found "a direct loss of US $451.4 million last year as a result of Airbnb," and Goldman Sachs concluded that Airbnb has already caused massive changes in the way people travel. Although consumers may be initially hesitant to try out the service, once they switch, 60% do not return to hotels. Peer to peer booking sites including HomeAway and FlipKey are here to stay. On a recent visit to Amsterdam, I discovered that every Airbnb facility (300+) was fully booked for an entire week.
Mogelonsky lists several areas in which Airbnb is superior to hotels. Airbnb has a better website and it displays its product and local area attractions much better than hotels. He argues that Airbnb engages both the guests and the property holders to rate and provide feedback on each other, akin to how TripAdvisor operates. Airbnb is one unified brand, and that it is customer friendly.
When I'm asked about my Airbnb experiences, I explain that it was much more satisfying than a hotel stay mainly because of the personal relationship between guest and property owner. Another advantage is that Airbnb has a wider range of product available translating into the fact that the customer has more choice and a wider range of price options.
Some competing businesses have criticized new smart phone-based companies in the sharing economy for evading taxes by deeming their workers as "independent contractors." Airbnb insists it does not evade taxes, noting that it pays occupancy or hotel taxes where required.
The average Airbnb stay is 4.5 nights which is was the length of each of our stays in East Vancouver compared to 2 nights per average stay at a hotel. With the cost of homes in cities such as Vancouver and Toronto, I can appreciate Airbnb as a way to help monetize assets for those trying to make some extra cash. The main worry is house trashing, but
those I have talked to have had no problems in that regard.
Besides writing for the five Niagara Postmedia newspapers, Mike has been published in every major newspaper across Canada including the Globe and Mail, Toronto Star, and Toronto Sun. He has been published in National Geographic Traveler, Buffalo Spree, Stitches, West of the City, Seniors Review and Hamilton-Burlington's View Magazine. With hundreds of reviews, photos and helpful votes, he has earned Trip Advisor's "Top Contributor Badge" and is considered an "Expert" in both Hotels and Restaurant reviews. Mike posts photos to Pinterest where he has a following of four thousand viewers.