[ADVICE] Wanted input from the AIRBnB community!

[Aquariouse0]

Hay Guys,

A few guys and I made a new 'Airbnb' type startup due to our experiences with AirBnB. We wanted to get as much community input as we could before we begin to launch. Below is a list of things we've implemented that we wanted when we used Airbnb. If you have any advice or anything to add PLEASE do no hesitate to let us know.

New Features so far: -2% Host Fee -5-10% Guest Fee - 10% of earning from your local complex, neighborhood or etc go back to the community for local repairs, HOA fees or whatever your community agrees to use it on. This is so over time the value of your neighborhood will improve thus the value of your home does too.

WEBSITE:http://localit.tk/ (we will use a tk domain until we launch, then were switching over to a .com)

Once again ANY input is appreciated, we want this to be a community effort!

[David-and-Fiona0]

So you use Airbnb community group to market your competitive start up? Classy : ( 

[Aquariouse0]

It not to market it per say I'm just an individual trying help fix what I've seen wrong in a certain market.  In all honesty, I might not even fully launch it if  the majority are actually satisfied with the current market. Just trying to consult with others that might have had some of the same experiences I've had before making a move. Though i can easily see how it would come off that way.

[Allison2]

There sure are a lot of things I'd like Airbnb to improve on! While I appreciate the spirit in which you're adding the community give-back portion, you're essentially forcing me to pay additional tax.

You reduced the host fee by 1%, but reduced what I can charge by 10% with the community give-back portion.

I already pay 6% to my state in direct use tax, fees to my city, and 30% in income tax to state, and federal taxes. The property taxes in my city are also quite high, about 10% of my annual income. While I'd love to see improvements in my neighborhood, I don't live in a HOA and "donating" those funds to my city would definitely not be a good use of MY profits - my neighbors would never see the impact of those dollars. I already give back by providing free lodging to charities, employing locals to help clean and maintain the place, and pointing guests to great local businesses.

The administration of getting those funds into the correct (and hopefully not fraudulent) hands sounds like a nightmare. What about people who live in unincorporated areas? Their money is going to end up in some county slush fund that will never have an impact on their neighbors.

Frankly, I wouldn't sign up with an outfit that was going to pull more money out of my pocket.

[Aquariouse0]

Hi Allison, 

First thanks for the input i really appreciate it! yes managing the 10% give back so that it does not fall into the wrong hands will be a nightmare, as I'm still trying to find a way to do that. The 10% wouldn't be coming out of the host funds, it would be from the profit that was earned from the site. Do you think i should get rid of the whole 10% idea all together? What would you add to Airbnb if you could? Once again thanks for the input!

[Allison2]

I like the community give-back concept, because it addresses some of the issues confronting Airbnb right now directly, but it would be a tough sell if your overall fees are higher than ABB's (you're proposing up to 22% - ABB is up to 19%)

Any time you're taking a cut - whatever the purpose, it's coming out of host's pockets. It's just the economics of it.

If a guest is willing to pay $100 to stay with me, but would go to an alternative if I charged a dollar more, we've found the max price.

If I deal with them directly, I may just need to pay a transaction fee to a credit card - let's say it's the same as your host fee 2%. So $98 goes to my pocket.

If the guest & I pay a site to match us, whether you call it a guest fee or a host fee, it still means I can't charge as much because they'll go elsewhere as soon as we go over $100. I'm happy to pay you a cut for your service, but if your fee is $10, now I can only charge $88.

If you add another % for community, let's say an equal amount to your cut, that's still coming out of my pocket. Now I can only charge $78 before the guest looks for alternative lodging. (And after taking 30% off for taxes and paying my friend $30 to help me clean, I'm making less than $25 for that $100 booking)

Perhaps I'm misinterpreting you and you mean you'll use 10% of YOUR profits to put back into the communities that funded the site. If so, that's cool, but still sounds like a logistical headache. Perhaps better to donate to well-respected charities.

The things that cause me the most headache with Airbnb are lack of guest education (on the difference between Airbnb & hotels, on the communication necessary, on how ratings work), glitchy/poor math on website, harrassment over ratings (two 4-star ratings shouldn't set off alarm bells), and the ability to get a live CS rep who is empowered enough to address issues. I'd also like a way to add taxes to a guests' bill without extra fees being added for that amount.

More competition in this market is a good thing, so I wish you luck!

[Aquariouse0]

What do you think about having a 10 min mandatory annual virtual class that educates the guest on such info? And the tax suggestion sounds great, going to start working on a way to code that in. Math and formula wise what specifically do you mean? could you please elaborate, if you don't mind. And once again thank you for taking the time out your day to provide this input, I appreciate it!

[Allison2]

My intuition is that a ten minute video will be left to play without much engagement. Perhaps pop-up text that walks you through elements of a listing when you're a new user? I'm sure there are web designers who could tell you what types of education approaches are most effective.

I just want a spot where I can input what % of my booking price needs to be charged as a sales tax & don't need to add it for each reservation.

It's pretty straighforward: I pay 6% use tax to the state of MI, so example:

Room charge $100 x 2 nights = $200 (this is the amount I expect, minus host fee. If you charge 2%, I'd get $196)

Your company's service charge (let's say 10%) = $20

MI state use tax = $12 (.06x$200 - the room charge, not taxing your cut)

Total= $232

If you're willing to take on submitting the tax to the state on my behalf, great - but that's another logistical headache with the number of cities, states, etc. If not, pay it to me without adding it into my 1099/income reporting - I shouldn't have to pay income tax on a sales tax that just passed through my hands.

[Aquariouse0]

Thanks Allison,

Awesome, we've added the custom tax and pop up walkthrus in, thanks for all the advice and support. We also sent a message to AirBnB in hopes that they might make these corrections themselves.