Airbnb has now been serving the public for the last ten years and has single-handedly changed the way many of us travel around the world. As the title implies, Airbnb first came into our lives in the summer of 2008, with the bizarre and completely revolutionary idea of utilising your own personal space as a room-rental business. This allows ordinary individuals to sell their own personal spaces for money, paid securely and directly into their bank account. As a result of this successful business model, Airbnb now operates in over 191 countries across the globe.
How did Airbnb begin?
The story behind Airbnb is well known. It all started with three youngsters — Nathan Blecharczyk, Brian Chesky, and Joe Gebbia — who were living together in San Francisco where they couldn’t afford the rent. They made the decision to buy three blow-up mattresses and advertise to host guests in their flat, with the promise of breakfast included. This, along with the fact that San Francisco has many design conventions and an overall lack of hotel availability, meant the three roommates had happened to stumble upon an idea which would eventually be worth over $20 billion.
They purchased the domain name “airbedandbreakfast.com,” and the ball started rolling, with them eventually ending up on every cover of every financial magazine and being regarded as some of the most power young entrepreneurs in the world . The first guests showed up and paid $80 for the room. From that point on, Airbnb began turning into the hospitality giant we know and mostly love today. (I also believe it is important to place a disclaimer here, due to the fact that most of the time if an individual asks you to sleep in his/her attic on a blow-up mattress, 99% of the time it would probably be better to just get a hotel room.)
However, one of the most important yet forgotten parts of the Airbnb story is the fact that the team over at Airbnb had funding rejected numerous times, with many investors shaming the idea and believing it would never be able to work. Still, like Zuckerberg, Gates, and Jobs before them, they rose past adversity and, in doing so, transformed the face of hospitality.
How does Airbnb affect the hotel industry?
The introduction of Airbnb had a huge impact on the hotel industry, as is evident in the overall growth of Airbnb since it was first launched. As the popularity of Airbnb increased, hotel demand decreased. Not only did this lead to a decline in hotel bookings, but this also meant a loss from other sources of revenue (including a hotel’s restaurant, bar, room service, or taxi service). Due to the affordability and convenience of Airbnb, it seems the hotel business needs a massive overhaul if it is to maintain its presence in the hospitality industry.
The ethics of Airbnb
Despite the popular opinion of Airbnb’s users, the peer-to-peer property rental service has faced its share of criticism. Besides its numerous law suits regarding who governs the use of somebody’s private home, Airbnb has been plagued by a handful of users exploiting rental laws to stay in an Airbnb-affiliated property past the agreed end date.
Another unintended consequence of Airbnb’s business model is that in major cities around the world, it prices out local residents from their homes. Because landlords and landladies can make more money off renting out flats to Airbnb users, it would be more lucrative for them to convert more of the flats in their buildings to Airbnb properties instead of renting them out as homes for local residents. Thus, these residents are unable to bear the expense of their formerly-affordable housing and are driven to find a home elsewhere.
Airbnb haven’t addressed these or other concerns regarding the ethics of their company, though it would seem increasing property regulation would come at the expense of growing their business, which they are not keen to do. It’s up to them to decide which values will direct their business.
Airbnb provide an affordable and convenient place to stay to those who might not have been able to pay for it. While Airbnb make it cheaper to travel the world, it’s easy to forget what this costs.