Airbnb's Chickens Coming Home To Roost

[Super47]

Extremely troubling developments for Airbnb in the light of the impending IPO. For several years now, the company has actively and deliberately sought to keep hidden the true scale of the takeover of the platform by professional property managers and commercial entities, preferring instead to sell itself on its increasingly mythical 'live like a local' image. However, with full disclosure being a key and critical element of US Securities Laws, it appears that it may now finally be compelled to lay bare the real data. 

The truth always comes out in the end. 

"Dozens of affordable housing groups and community organizations that have long accused Airbnb of exacerbating housing shortages are taking their grievances to U.S. financial regulators just as the short-term rental giant prepares to go public.

In a letter to the U.S. Securities and Exchange Commission viewed by The Information, the groups complain that Airbnb hasn’t complied with rules limiting short-term rentals in many cities. They contend that Airbnb should be required to disclose more information to investors about how many rentals on its site are run by professional property managers"

https://www.theinformation.com/articles/airbnb-opponents-take-fight-to-sec-ahead-of-ipo

[Super47]

Lol! Oh dear lord - give me strength..  even the emojis are censored here.?? Because a cartoon pic of a plop  would be sooo much more offensive to grown adult sensibilities than the words "pile_of_poo", right? There aren't enough rolling eye emojis in the world for me to express my feelings on this one..

Truly, we're all living in cloud-cuckoo land.. 

[Sharon1014]

@Super47   ummm, why don't you just tell us what you REALLY think? 😂 😂 🤣

Robin has a nice tin of turd polisher, am sure he would loan it to you  😁

Fear not, all will be well.  Pinocchio wants to be a real boy, his wish is about to be granted.  Exciting times ahead.

Ted Talk = priceless. 😆

[Super47]

@Sharon1014

Let me tell you a little story (Catherine Powell did remind us of the vital importance of 'storytelling' in her introductory video) 

Once upon a time, not so very long, long ago, the Fairy with the Turquoise Hair reached out to Pinocchio, who was being a bad, bad puppet. Fairy urged Pinocchio to examine his conscience, encouraged him to be honest, brave and true and implored him to redeem himself by changing his grubby, greedy ways and by learning to treat others with kindness, dignity and respect.

Sadly, Pinocchio (who turned out to be the much more malicious Pinocchio from Collodi's original dark 1881 Giornale dei Bambini tales, rather than Disney’s whitewashed loveable rascal version), ignored the Fairy's wisdom, opted not to mend his errant behaviour and instead, chose to become even more rogue, malevolent and destructive than ever before. 

In doing so, he inadvertently set the wheels in motion then, that would ultimately seal his own fate - a fate that looms closer and closer with each passing day. Time has run out for the puppet's redemption, or salvation, and the whispers in the wind say there'll be no fairytale endings or wishes coming true for this wretched, wicked Pinocchio. 

"As a man sow, shall he reap" 

The End. 😏

[Super47]

@Sharon1014

That's the $18 billion (down from $38 billion) question that they've built a global corporation from avoiding. What makes it all the more egregious is that a 2018 investigation by the CPC (Consumer Protection Cooperation Network) into Airbnb's unfair commercial practices and illegal terms, concluded with the EU Commission ordering Airbnb to clearly identify whether a listing is offered by a private, individual host  or a commercial operator in order to align with European laws, as failure to do so is deceptive, misleading and unfair to consumers. Airbnb was given until Jan 1, 2019 to comply, or face enforcement. 

See below for further information on the case and to see twinnie questioning former Head of Core Hosts, Laura Chambers, as to why Airbnb had apparently wilfully neglected to comply with the EU ruling. (about halfway down the page) And over 2 years after the original directive, they're still in non-compliance. 

https://community.withairbnb.com/t5/Airbnb-Updates/Laura-s-Letter-What-I-learned-staying-with-privat...

[Christine615]

I think Airbnb should apply the EU requirements to the US and other countries. Private hosts are getting creamed by the "jumped in to make a profit and write off depreciation LLC's that popped up." I am LIVID that Airbnb called me constantly to go lobby the city council for legal status and once passed, allowed a lot of unregistered third-party, multiple unit investors to move in and buy up affordable housing and disrupt neighborhoods. They don't even enforce compliance to the "no more than 8 people" and "no more than one unit per building" rules when they allow new listings.

Honestly - they saw "sucker" written on the faces of our local Council and allowed a local lawyer who has been circumventing zoning laws for his own use to help guide them. It's a bloody mess here in my city.

[Super47]

@Christine615

"I think Airbnb should apply the EU requirements to the US and other countries.."

They don't even apply the EU requirements in the EU, @Christine615. For a short while after the ruling came into force on Jan1 2019, they made some half-hearted attempts to make it look as if they were working towards compliance but that soon went by the wayside as soon as the dust settled.

"I am LIVID that Airbnb called me constantly to go lobby the city council for legal status and once passed, allowed a lot of unregistered third-party, multiple unit investors to move in and buy up affordable housing and disrupt neighborhoods"

Exactly the same patterns have been repeated in towns and cities all over the world. Small independent hosts and homesharers are used as Trojan horses in the regulatory battles with city councils and municipal authorities, purely as a cosmetic exercise, then Airbnb stealthily swamps their markets with listings from professional and commercial entities - many of them foreign investors and speculators, many more of them illegal operators. (Airbnb has already proven just this weekend how very closely they're entangled with the dodgy mega-host operators - and the extremes they're willing to go to, in order to protect them and keep them on the platform - with the reinstatement of Domio after they were exposed by the media for a litany of shady and illicit practices)

They can play the "back to our roots" and "refocusing our attention on our core host community" cards to embellish their IPO narrative all they want, but only the blindest and most gullible are swallowing their blatant - and increasingly obvious - lies anymore. 

[Super47]

@Christine615 @Sharon1014 @Cormac0 @Anna9170  

The reality is, the numbers of homesharers and small independent hosts have been plummeting in every market worldwide for a long time now, since well before COVID, while the numbers of professional operators continue to skyrocket. WSJ reported earlier this year that a third of all Airbnb "hosts" in the US now operate between 2 and 24 listings, while a further third run 25+, and those numbers have undoubtedly increased exponentially since the pandemic hit.

Below are some examples from around the world of the current  percentage of private room listings in popular markets that have been badly affected by 'professionalisation', and unfortunately, its a rapidly spreading trend (not long ago, the split was far closer to at least 35/65 in most regions, and up to 50/50 or more in many others.

Kansas City 26%

Rio 25%

Chicago 24%

Atlanta 21%

Seattle 20%

Tokyo 19%

Dubai 18%

Vienna 17%

Lisbon 17%

Copenhagen 16%

San Diego 15%.

Austin 15%

Prague 15%

Tel Aviv 14%

New Orleans 11%

Paris 9%

Honolulu 8%

Nashville 7%

[Sharon1014]

@Super47   Interesting data but there could also be other reasons why the private room listings have tailed off, not least of which is that with experience, some private room hosts may have just not wanted to continue (damages, theft, problem guests, short term need to plug cash-flow problems since addressed etc).  Another possibility is that comparing percentages may not be accurate either, i.e. there could still be just as many private room listings as there were before but the number of entire apartments or houses has increased, making the private room listing % look smaller when it actually isn't.

I'm also not sure why the numbers would have increased exponentially, since many STR's have now gone to the LTR market or been sold, notwithstanding that in-home hosts have likely suffered the most due to Covid.

None of which is to say there hasn't been an impact on private room listings, perhaps there has been, but it would just need broader statistical analysis to make that argument stick.

I think the core issue for guests, is to know whether there is an authentic local host who is readily available, or whether the property is being managed by a larger operator (bec. this has an impact on the level of service guests can expect).

[Super47]

@Sharon1014

I do agree with the points you make, but this is by no means meant to be any sort of a statistical analysis (that's way beyond my capabilities! 😉) - rather, a snapshot of the current state of play in each market. And there are, of course, unique factors affecting all of them, but there are also clear patterns 

Worth noting too that the numbers of private room listings in cities with tighter regulations remain higher, as would be expected (but still falling, just quite a bit slower) For example.. 

New York 43%

Amsterdam 34%

Toronto 32%

Dublin 37%

Berlin 36%

Many Asian markets still seeing higher private home listings too.. 

Bali 38%

Seoul 34%

Ho Chi Minh 32%

Bangkok 30%

[Sharon1014]

@Super47   Very interesting.  Agree re the stats, one would need access to a raft of internal data to substantiate.

[Super47]

Also, during the summer, Airbnb proudly announced their Top 10 trending 'rebound' destinations. The picture is even bleaker there..

The top 10 trending destinations in the US were:

1. Big Bear Lake, California
2. Miramar Beach, Florida
3. Panama City Beach, Florida
4. Smoky Mountains
5. Hilton Head Island, South Carolina
6. Destin, Florida
7. Myrtle Beach, South Carolina
8. Branson, Missouri 
9. Palm Springs Desert, California
10. Port Aransas, Texas

Below are the numbers and percentage of private room listings in those markets 

1. Big Bear Lake - 51/2939 (1.7%)

2. Miramar Beach 19/4909 (0.4%)

3. Panama City Beach 66/9941 (0.6%)

4. Smoky Mountains - 

     Gatlinburg  65/3131 (2%)

      Pigeon Forge 24/1758 (1.3%)

5.  Hilton Head Island 18/6118 (0.3%)

6.  Destin 35/5415 (0.6%)

7.   Myrtle Beach 169/6876 (2.4%)

8.   Branson 60/2282 (3%)

9.   Palm Springs Desert 103/2946 (3%)

10.  Port Aransas 4/2116 (0.2%)

[Ian-And-Anne-Marie0]

@Super47 

Below are the numbers and percentage of private room listings in those markets 

1. Big Bear Lake - 51/2939 (1.7%)

2. Miramar Beach 19/4909 (0.4%)

3. Panama City Beach 66/9941 (0.6%)

4. Smoky Mountains - 

     Gatlinburg  65/3131 (2%)

      Pigeon Forge 24/1758 (1.3%)

5.  Hilton Head Island 18/6118 (0.3%)

6.  Destin 35/5415 (0.6%)

7.   Myrtle Beach 169/6876 (2.4%)

8.   Branson 60/2282 (3%)

9.   Palm Springs Desert 103/2946 (3%)

10.  Port Aransas 4/2116 (0.2%)

SHOCK !!

That is not "Getting back to our roots" by any stretch of any imagination.

[Ute42]

.

@Ian-And-Anne-Marie0 

These are all vacation rental destinations. That's where the money is. 🙂

[Super47]

@Ian-And-Anne-Marie0 @Ute42

As it happens, the migration of traffic from urban to resort areas is a happy consequence of the pandemic for Airbnb, and dovetailed perfectly with their plans to wrestle control of those markets away from the local independent vacation rental owners and homegrown property management companies, who have been quite happily and capably operating independently in those regions for decades, long before Airbnb was even heard of. 

"The online juggernaut isn’t satisfied with dominating urban markets. Airbnb wants to take the beaches and the mountains, too, in the battle for short-term rental bookings. So the company is becoming savvier in how it approaches local property managers" 

Airbnb Doubles Down on Professional Vacation Rentals in Resort Areas – Skift

0ct 16, 2019 

https://skift.com/2019/10/16/airbnb-homes-in-on-professional-vacation-rentals-in-resort-areas/amp/

[Super47]

@Ian-And-Anne-Marie0 @Ute42 

Coincidentally, the Extenuating Circumstances policy was also a major issue mentioned in that Skift article above, as something which deterred professional operators from 'partnering' with the platform. 

Airbnb's Sept 24 Press Release regarding the new Extenuating Circumstances policy states..

"Today, Catherine Powell, Airbnb’s Head of Hosting announced modifications to Airbnb’s policies regarding cancelations and highlighted our work towards providing guests travel insurance options in the future. The changes were informed by her consultation with hosts and guests around the world and will apply to reservations that begin on or after January 20, 2021"

Well firstly, Catherine's video most certainly did not "highlight our work towards providing guests travel insurance options in the future" (That was a later hastily-inserted addition in the corresponding written material)

Also, the claims that "the changes were informed by her (Catherine's) consultation with hosts and guests around the world"  are rather disingenuous. As referenced in the article, Clara Liang - then Airbnb VP and GM of Luxe and Professional Hosting - had already stated at the Vacation Rental Management Association conference in October of last year, that Airbnb recognised that the EC policy was being abused.  Ms Liang also stressed that as part of their attempts to win professional property managers over and schmooze them into hopping on board the Airbnb gravy train, plans were already afoot to make changes to the policy - solely because the Pros hated it so much and it was an impediment to many from signing up. (So in reality, nothing whatsoever to do any wishlists small hosts might have brought to the table during  cosy little workshop chats or 'listening' sessions, however the company might try to spin it)

Hasn't stopped Airbnb themselves from abusing both hosts and guests alike with that very same EC policy for almost the entirety of this year though, unfortunately.