"Back To Our Roots".. So Why Is Airbnb Promoting Hotels Over Homesharers?

[Super47]

Brian Chesky, Open Letter, May 5 2020

Travel in this new world will look different, and we need to evolve Airbnb accordingly. People will want options that are closer to home, safer, and more affordable. But people will also yearn for something that feels like it’s been taken away from them — human connection. When we started Airbnb, it was about belonging and connection.This crisis has sharpened our focus to get back to our roots, back to the basics, back to what is truly special about Airbnb — everyday people who host their homes and offer experiences. .

For many homesharing and small local hosts out there, Brian Chesky's eulogising above was music to their ears.. a beacon of hope for a brighter future - a future where the wonderful, warm hospitality they provide for their guests and the invaluable, tireless work they've been doing for years - work that has been the cornerstone in building Airbnb's reputation, brand image and fortunes from the ground up - might once again be recognised, and valued, by this company to which they've devoted so much of themselves, and their lives. 

Yet 5 months on, and it's a very different reality as Airbnb floods the 'Private Rooms' searches with Hotel Rooms, Boutique Hotel Rooms, Serviced Apartment Rooms, and Hostel Rooms - with the majority of the Pro and commercial offerings proudly sporting the 'No Fees To Guests!" banner, which Airbnb has assured them will boost their business dramatically and and increase their bookings by a whopping 17% - 21%. At whose expense, though? 

A quick search this week of Airbnb listings for London, 2 guests, Nov 20 - 22, Private Room filter selected, returned the listings below at Numbers 1 and 2 in the search. Five of the top 10 listings shown to me were either 'Room in Boutique Hotel' or 'Hotel Room', and only one of the Top Ten listings was a private room offered by a Superhost.

Bear in mind too, that hotel listings can also be found by selecting the 'Hotel room' filter on the regular site, and additionally, are listed on the Airbnb-owned Hotel Tonight portal (which they splashed out around $450 million on. also in April of 2019) So hotel rooms are effectively getting 3 times the exposure and promotion, that regular private room listings are receiving. (The performance of existing company investments will be a very crucial component in Airbnb's IPO prospectus, of course) 

The very first listing in the search returns that I was shown is an OYO listing. OYO Hotels and Homes is an extremely shady and controversial 'hospitality chain' outfit - once again, fronted by an arrogant kid in his 20's - in which Airbnb invested a reported $150 - $200 million in April of last year. They frequently have god-awful reviews - this one which Airbnb saw fit to return as the first choice in my search is a 3.67 star rating - and the company's toxic culture and shameful, exploitative business practices were exposed in the New York Times earlier this year.. 

At SoftBank’s Jewel in India: ‘Toxic’ Culture and Troubling Incidents at OYO
https://www.nytimes.com/2020/01/02/technology/oyo-softbank-india.html

Yet Airbnb still sees fit to blatantly promote these substandard listings over and above the private room listings of long-serving, highly-rated exemplary Superhost homesharers. Ask yourselves - if there is any truth in Airbnb's "back to our roots" claims at all, or indeed, if there is any real place for homesharing or small local independent hosts in Airbnb's future 'roadmap' - why that would possibly be?

 

 

 

[Super47]

If the worst does come to the worst @Sharon1014 (which is looking increasingly likely for all the reasons you mention, plus the added complications of further regulatory crackdowns worldwide, looming legal challenges, the almost certain repeal of Section 230 in the US, the new Digital Services Act in the EU, an exodus of both hosts and guests to competitor platforms due to chronic customer service, payment, tech and operational issues, an unprecedented erosion of trust amongst the platform user base etc), then it's highly unlikely that hosts will actually get a red cent that they're owed because its extremely doubtful that there'll be anything left in the pot.

Quote from CNBC on the punitive terms of the $2 billion bailout (mostly in debt) that the company was forced to agree to earlier this year.. 

Airbnb is paying about 9% interest on the new debt, the people said. That's a slightly lower rate than the interest rate on the debt piece of the announced funding round from last week, which was a mix of debt and equity. For the debt portion of that financing, Airbnb is paying about 11.5%. Silver Lake and Sixth Street Partners are participating again after also putting money into the prior deal.

The newest round comes with a reduced rate because it's first lien, meaning the investors will get paid out first in the event of a default

[Sharon1014]

@Super47   Not in the least surprised the investors have first lien (on what exactly, that would have to be physical assets of some description, followed by any cash assets).   I wouldn't mind seeing the detail in that particular bit of documentation.   Both the lien and the high interest rate are indicative of investor caution, even lack of confidence.

And you are exactly right, when a business that is a "platform only" goes belly up, it's not like they actually have loads of physical assets to liquidate or to act as a surety for investors, which does make them extraordinarily vulnerable to stock price plunges.

I figure that the creditor priority list will go something like this

1. Major investors (liens, other exit or default clauses)
2. Minor investors (shareholders)
3. Contractor Firms owed for company work
4. Direct Employees
5. Outsourced CS and other contract employees
6. Guests
7. Hosts

[Super47]

@Sharon1014

Well considering that Booking priced $3.25 billion of its debt offerings at around 4%, the eye-watering terms of the deals Airbnb entered into, do smack more than a little of desperation. Other potentially interested parties declined to invest at all unless Chesky was ousted.

I'd say you're pretty close to the mark with that creditor priority list.

And now, there's the latest twist.  Curiouser and curiouser. What do you make of this..??

Airbnb Tells Shareholder Group That Board Has Approved Share Split

https://www.bloomberg.com/news/articles/2020-10-25/airbnb-tells-shareholder-group-board-has-approved...

[Sharon1014]

Very interesting @Super47 

Booking has somewhere around 75% more market share than ABB to my knowledge, so not surprised they sliced off a much better deal.  It does speak to the level of risk in ABB and also raises curiosity around the final market cap of ABB post launch.

The stock split prior to IPO is also pretty fascinating.  The purpose being to make the shares cheaper - target audience - mom n pop investors (the dumb money) ensuring as much exposure as possible to as broad a liquidity base as possible, which is turn helps the beneficiaries of the pre IPO 2:1 split have a wider audience to offload their increased share volumes to.

Along comes pandemic Wave 2, and NASDAQ looking rather wobbly for a bunch of south traffic.  Having lots of buyers (at affordable prices) able to soak up the offering is going to matter.  The board is already one step ahead of the game.

Just my 2c.

[Super47]

Couldn't agree more @Sharon1014. Can't say I'm surprised at any of this though - I had a horrible dread that this was how it was going to go. Also indicates a potential lack of interest from the institutional investors.which in itself, paints a very dark picture. Once again, it's the inexperienced little guys that are going to fall for the hype and ultimately, suffer the pain when the sh*t hits the fan. But as long as the original investors have had their megabucks cash-out on IPO day, that's all that matters, isn't it? 

[Rebecca181]

@Super47 Airbnb initially built its entire business by taking advantage of the "inexperienced little guys" (and gals) - Meaning, us home-sharing hosts. So, they are obviously quite adept at this strategy by now; thus, manipulating the mom-and-pop investors will be a piece of cake.

[Heidi588]

I always search for "entire places," and I've noticed and get irritated that a lot of hostels list under "entire place" and it's just a bed in a dorm. Also a lot of hotel suites with kitchenettes. I've finally started using the filter to specify what kind of place I want. I didn't know and still don't know what a serviced apartment is, but I don't select it. 

This is a bit off the topic, but it relates to my point about entire places. I found an amazing stay and I'm so glad I asked the host questions. There was a gorgeous private terrace, I wanted to know if it's closed in or if there are stairs. Turns out, the entire place, an apartment in a home, is between floors and there are stairs with no doors, so anyone visiting the tenant on the top or bottom floor could walk right into the "entire place" I would have been staying in. I really was heartbroken, she's not ready to install doors yet, it's planned for later. I gently advised her that it would be helpful to put the openness of the space in the listing, that there would be an expectation of a door with a lock for an entire place. 

I found another listing once for "entire place," it was a sofa bed in the living room of the host's apartment. 

Maybe I sound like an entitled whiner, but I spend a lot of time searching for my next long-term stay, and it gets obnoxious to weed through all this extraneous, irrelevant ish.

@Super47, I'm not a host, but I'm totally supporting you. There are so many hotels listed and that's not what Airbnb is (ostensibly) about. Someone eschews a hotel booking platform and goes looking on Airbnb for a different kind of stay, but then gets distracted by a nice and affordable hotel room...or maybe is experienced with the Airbnb platform and prefers using it over a hotel platform even though they prefer hotels, and hey look, a hotel room on Airbnb...and then a local host gets screwed. 

Can I just say, the other thing that irritates the ish out of me is when I search for a stay in a particular city, and there will be stays for nearby cities interspersed with the local listings, and it takes forever to find the listings for that particular city. For instance, I was looking in a small city that borders Mexico City, and I kept getting tons of results mixed in for Mexico City, I don't think I ever saw all of the listings for the city I wanted. That screws over the local hosts, as well as makes the guest frustrated in trying to find a stay (I'm gonna yell here) WHERE THEY ACTUALLY WANT TO STAY.

I'm glad I found this forum. It helped me realize that I wasn't the only one gaslighted by the platform and customer service; the company does it to everyone, guests and hosts alike. I would use a different platform, but the only one that comes close is VRBO, and they don't do monthly rates, only nightly, so I can't ever find anything I can afford that's as nice as what I find on Airbnb. 

[Sarah977]

There are some hosts who list their places in error as far as "entire place". It isn't necessarily nefarious, trying to trick guests, although sometimes it might be a deliberate misrepresentation to make it sound attractive. They just don't understand the categories and the way Airbnb presents the options to hosts and describes them when a host first signs up can be confusing to some.

There have been new hosts who have posted here who had small, family-run hotels who were shocked, wondering how someone was able to book all 6 rooms for the price of one. They never knew that they needed to create a separate listing for each room, and just had all the rooms on one listing, with a price for one room.

I hear you on the issue of other areas being included when you do a search. Hosts absolutely hate that, too. The town I live in is about a 45 minute drive from Puerto Vallarta. If a guest wants to vacation in Sayulita, which is a big tourist draw all on its own, they aren't going to book a place in Puerto Vallarta, and vice-versa. Yet if you search for Sayulita, all these places in PV come up. 

Airbnb seems to think that towns which are an hour away from each other are just like different areas of some big city like NY or LA. It must be really frustrating for guests.

@Heidi588 

[Ian-And-Anne-Marie0]

@Super47  @Helen3 

Do all OYO Hotels need to wear masks all the time? And what's this '3.78' rating?? How are they still managing to ACTUALLY host with their level that low level of service?!

That's ALL too very convenient.

@Airbnb @Catherine-Powell  If you could throw some light on this situation - you wouldn't be treating us all like mushrooms.

Thanks.

[Super47]

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[Super47]

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[Susan89]

Airbnb blocked a perfectly good reservation this week and I lost income, because they were going to have a fictitious party? The guests were told to book another room or a hotel. We messaged back and forth; they were a lovely couple wanting to have a safe getaway in my clean, very cozy space. They called CS and nothing could be done. I live on my property and I should be able to decide for myself whether I think having guests here are a risk. One of them had three positive reviews. I could go on and on. This "rule" needs to be changed immediately. I hope it never happens again.