The basic problem of AirBNB was that it was never going to scale. Individual condo owners will never be able to compete with the efficiencies of scale of hotels. Having cleaning staff have to drive from building to building can never compete with a bunch of rooms in a single hallway.
The AirBNB concept does make sense for a few niche applications:
Small rental units in locations where big hotels aren’t viable. (Think remote mountain cabins.)
Actual lived-in homes for people who are traveling and don’t mind strangers staying in their house while they’re away.
Neither of these scale. Cabin rentals can compete because it’s not viable to build a hundred unit hotel on top of a remote mountain. But that market can’t scale. Cabin rentals already have their own rental networks, and there are only so many of them. People renting out their actual residences can compete with hotels. You already have to pay your mortgage anyway, bringing in a short-term renter adds little marginal cost. But this model can’t scale, as very few people actually want to rent out their own homes while they’re out.
But AirBNB pulled the usual Silicon Valley bait-and-switch. Corner a market with unsustainably low prices, then raise them. The bait got many people to purchase rental units with the goal of renting them on AirBNB. But this was never going to be sustainable. Once AirBNB stopped subsidizing the rentals, the landlords have to raise the costs (both monetary and policy costs) to actually make the business profitable. And they simply cannot compete with the economies of scale of hotels.
Airbnb as a service for homeowners to rent to visitors is a great idea. Want to rent out your basement to weary travellers? Heres a service to do that.
Buying 20 single family homes to generate passive income is an incredibly stupid, antisocial, and dystopian idea.
The basic problem of AirBNB was that it was never going to scale. Individual condo owners will never be able to compete with the efficiencies of scale of hotels. Having cleaning staff have to drive from building to building can never compete with a bunch of rooms in a single hallway.
The AirBNB concept does make sense for a few niche applications:
Small rental units in locations where big hotels aren’t viable. (Think remote mountain cabins.)
Actual lived-in homes for people who are traveling and don’t mind strangers staying in their house while they’re away.
Neither of these scale. Cabin rentals can compete because it’s not viable to build a hundred unit hotel on top of a remote mountain. But that market can’t scale. Cabin rentals already have their own rental networks, and there are only so many of them. People renting out their actual residences can compete with hotels. You already have to pay your mortgage anyway, bringing in a short-term renter adds little marginal cost. But this model can’t scale, as very few people actually want to rent out their own homes while they’re out.
But AirBNB pulled the usual Silicon Valley bait-and-switch. Corner a market with unsustainably low prices, then raise them. The bait got many people to purchase rental units with the goal of renting them on AirBNB. But this was never going to be sustainable. Once AirBNB stopped subsidizing the rentals, the landlords have to raise the costs (both monetary and policy costs) to actually make the business profitable. And they simply cannot compete with the economies of scale of hotels.
It’s also good for family reunion or just traveling with your own family or kids and want a kitchen/ multiple rooms.
Airbnb as a service for homeowners to rent to visitors is a great idea. Want to rent out your basement to weary travellers? Heres a service to do that.
Buying 20 single family homes to generate passive income is an incredibly stupid, antisocial, and dystopian idea.
Wasn’t that the original idea? I swear when my friend first used it he made it sound like crashing in a spare room.