Why Airbnb Sucks Now
-An open letter to Airbnb
I have a confession...
I love using Airbnb. I’ve used it countless times in multiple countries. For wanderlust stricken 20-something gen z kids like my friends and I, Airbnb offered an affordable alternative to hotels. Allowing us to travel in a way that is congruent with what we want out of a vacation.
Here’s why Airbnb worked for us. Last year, my friends and I went to Japan. This was a big group. Seven of us total. For a few of us, me included, this was our second time in the country. For others this was the first. All of us are in our 20s. Like many young people, our travels prioritize new experiences, cultural-immersions, and adrenaline chases. While the allure of five-star hotels with spas and breakfast tempt us, it simply isn't worth the cost for younger travelers who have different ideas of a vacation in mind. Airbnb allows us to travel together as a group without much of a hassle. We can prioritize the experience we want, for a cost we’re comfortable with, and we (usually) don’t feel that we must trade too much.
However...
Airbnb absolutely sucks. For cities. For Travelers. And for the hosts themselves. We’re going to explore this in greater detail starting off with the most contentious.
Cities
One of the main issues with Airbnb is that it causes long lasting problems for the cities they operate in. Airbnb has gone from a service that allows users to experience life like a local to one of a global gentrification scheme. It has become more lucrative for investors to buy up properties in cities like Lisbon and Barcelona (the latter of which has recently banned the site)
Airbnb for this very reason) and to rent them out. However, it's not to local Lisbonites and Barcelonians who combined have a monthly salary less than the average American. Instead, they rent out to tourists on Airbnb. This has become a popular investment model all over the world. The economic toll that such a model has on the residents of a city is dire and has been noted by residents.
Picture of graffiti that I took in Gracia, Barcelona
This isn’t good for Airbnb. Rather than coming up with solutions that address the concerns, Airbnb has ignored them and faced the consequences. Barcelona and New York City have agreed to ban short-term rentals in the city. One can hardly blame the elected officials. Airbnb has enjoyed few regulations compared to hotels and there's very little winners because of it.
Even here in the United States, we are facing a strange reality where someone has an easier time finding a place to rent on Airbnb than actually buying a home. At a time where consumers are facing high inflation, high interest rates, and rising unemployment rates, the public needs more productive solutions. Airbnb entrepreneurs are hurting the American (and international) consumer.
“The result is there are currently 65% more homes listed for rent on Airbnb than listed For Sale”
Nick Gerli, June 2023, Reventure APP
Travelers
As I've said, when booking for an Airbnb, I make the active choice to trade amenities and luxury for convenience, affordability, and accommodation that meets my travel style. Because I'm not looking for 5-star service, I’m quite flexible on what kind of accommodation I look for. However, I too have my limits.
Tokyo, September 2023. My friends have left to go back to the states. I had an extra day to myself. I prefer it this way so I can wrap up any last-minute purchases and say goodbye to the city. I booked an Airbnb for myself. This Airbnb was a mess. The host asked me to delay my check-in time after I had already showed up, telling me they had to clean up the apartment. This becomes a nuisance when you have to carry your luggage around everywhere. So, I rented out luggage storage in the area and explore the neighborhood. When it was finally time to check in, I made my way to the apartment. I’m not sure what sort of cleaning they did, but it was not at all apparent and didn’t match the time spent at all. The apartment was putrid, littered with trash and condoms. This was a complete shock to me. I booked an apartment in a relatively good neighborhood from a host with a rating over 4 stars. I couldn’t understand it.
This is the problem for Airbnb from the perspective of the customer; there is no quality control. Just about anybody can become an Airbnb host, there’s no training in customer service, there's no standards that have to be applied other than what's legal. Airbnb users are at the mercy of what the reviews say and what they can afford. This becomes a problem for not only travelers, but also for Airbnb, whose reputation is increasingly looking less like the hotel alternative and more like a glorified motel service.
Hosts
Airbnb has created a gold rush in the tourism industry. Millions of entrepreneurs looking to buy properties solely for the purpose of renting them out on Airbnb. But every gold rush must end, and the end for this one is right on the horizon. Tourism is an elastic good and is one of the first sectors to get hit during economic downturns.
“Airbnb shares dropped 14% in after-hours trading after the company reported second-quarter earnings that missed analyst expectations and warned that it’s seeing signs of slowing demand from U.S. customers.”
Barcelona is the latest to join a growing list of cities that’s fed up with the company and have decided to make policy changes against them. Barcelona has decided to outright ban short-term rentals completely by 2028. Investors have difficult choices to make. Not only must they stomach the cyclical problems of the tourism sector, but they also face very real possibilities of being forced to sell their homes at a loss due to regulations.
Records show that in many counties all over the United States, there has been a significant drop in revenue from May 2023 to May 2024
Solutions
I want Airbnb to succeed. It’s a genius service but it needs a lot of work to realize its potential. Government regulation and implementing measures for quality control can drastically change how the service works.
Regulations
Airbnb and cities should work together to find a balance between revolutionizing the tourism industry while still respecting local economies. Cities like Barcelona have a few options. One idea I pitch to is to limit Airbnb to only certain neighborhoods. Rather than banning Airbnb for the entire city, perhaps Barcelona would consider allowing the company to operate in some neighborhoods that aren’t as high demand for locals. Another is for Barcelona to limit the number of Airbnbs that operate by neighborhood. Lastly, Barcelona and Airbnb could consider capping prices on many homes to be more reflective of the local economy. Whether Airbnb and Barcelona choose one of these solutions or a combination of all three, it would still be better than the current zero-sum game being played. This way, locals don’t need to compete with tourists for their very survival and Airbnb doesn’t need to be locked out of an entire market.
Quality Control
The ease of Airbnb is that anybody can become a host. But maybe not everyone should be. Airbnb says they may perform background checks on hosts, but I urge that it becomes a standard practice that ALL hosts undergo a strict background check. What should also occur is a training course that Airbnb launches for hosts, training them to better represent the Airbnb brand. At the end of the day, no matter how many legal contracts show that these hosts are their own bosses and independent, they still are representatives of the Airbnb brand, and their actions have consequences for the company, travelers, and even the economy of a city.
If Airbnb implements these two specific changes, the company can see a great turnaround, which is what someone like me wants to see. We don’t want to stop using the service. We love Airbnb. However, we don’t want to contribute to a system that is harmful to local economies, and we certainly don’t want to pay for low quality services.
Citations
“America: Average Monthly Net Salary (after Tax) (Salaries and Financing) by City.” Www.numbeo.com, www.numbeo.com/cost-of-living/region_prices_by_city?displayCurrency=USD&itemId=105®ion=019.
Goswami, Rohan. “Airbnb Shares Drop 14% on Earnings Miss as Company Warns of Slowing U.S. Demand.” CNBC, CNBC, 6 Aug. 2024, www.cnbc.com/2024/08/06/airbnb-shares-drop-14percent-on-earnings-miss-as-company-warns-of-slowing-us-demand.html. Accessed 27 Aug. 2024.
Hall, Laura. “What Does a World without Airbnb Look Like?” Www.bbc.com, 2 July 2024, www.bbc.com/travel/article/20240701-what-does-a-world-without-airbnb-look-like.
“Reventure App.” Reventure.app, 2023, blog.reventure.app/content/airbnb-owners-are-being-forced-to-sell. Accessed 27 Aug. 2024.
