What is Airbnb?
Without Internet technology, people would have to book their hotel accommodations either by contacting the hotel directly or by making arrangements through their travel agents.
Now that there’s the convenience of Internet technology, travelers can choose from various online booking sites like TripAdvisor, Agoda, and recently Airbnb. These all provide you with listings of available travel accommodations. But what makes Airbnb stand out from its competitors is that it specializes in connecting the traveler or user who needs accommodations to hosts who are renting their homes, rooms, or other unused spaces for a limited period of time. In short, it’s a more private way of getting a travel accommodation that suits the traveler’s specific needs and budget.
Because of its consumer-friendly and flexible approach, Airbnb has grown throughout the years and has extended its market coverage from just budget-conscious tourists to business and even group travelers. The company is estimated to have a value of $25 billion.
So what is Airbnb all about? According to the company, it provides a “trusted” community marketplace for people to list (as owners or landlords) and book accommodations (as renters).
The types of accommodations can be anywhere from rooms, suites, cottages, apartments, houseboats, yachts, and yes, even castles.
The host (the one who listed the accommodation for rent) can be anywhere in the world, and it doesn’t cost him to do so. He can post photos (with optional captioning) of the property to rent and his profile so that prospective renters will know more about him before they decide to book. And he should provide the rental rates (all up to him as to how much he will charge), his rental conditions (ex. Minimum number of nights, check-in times, etc.) and his contact information.
The guest or renter can access the Airbnb site directly but needs to register in order to be able to book any accommodations. To find out what accommodations are available on Airbnb, travelers can use a search box provided in Airbnb and input their requirements, such as location, price range, size, number of rooms, amenities, property type, and even keywords like “beachfront property.” This will filter all the availabilities, and results will show only what the renter exactly needs.
As the guest, you can contact the host by email or mobile phone (depending on what was provided) to ask questions about the rental deal even before you book. There’s a built-in form you can fill out in Airbnb to ask your host any questions. And if you’re finally sure that you want an accommodation, just click BOOK IT and enter your payment details.
Guests pay a fee of 6-12% on top of the reservation to cover Airbnb’s customer support and host guarantee services, only upon the host’s acceptance and confirmation of the reservation request. Hosts are charged 3% for each reservation to cover processing costs. Value-added taxes (VAT) may also be charged to both hosts and guests alike for some locations. And if you use a currency that is different from what the host has used, your payment is subject to Airbnb’s exchange rates which are variable.
Advantages of Using Airbnb
There are a lot of advantages of using Airbnb for both hosts and guests. Primarily, Airbnb provides an opportunity to match guests with the right kind of hosts. If you want to rent a castle or a beach house in a country of your choice, chances are there’s one listed on Airbnb.
Hosts and guests can get to meet each other prior to the dates of stay. As the host, you know exactly the number of people coming and what they need. As the guest, you will know what to expect in term of rent conditions and amenities. Guests can even ask the host questions about key tourist spots in the area and how to get to them. Hosts can provide valuable information about the area (ex. Main attractions, tidal conditions, air temperature, transport facilities, equipment to bring, etc.) The service quality is also more personalized, especially if the traveler is booking a room in the host’s home, just like in a bed-and-breakfast setting.
And of course, rental prices may tend to be much lower compared to standard hotel rates. You can rent an entire three-bedroom house for a fraction of what it may cost for three rooms or a suite in a hotel. With the Airbnb guarantee, you can be sure that your accommodation will be available at the right time.
Disadvantages of Using Airbnb
Along with the benefits, there are also some risks and disadvantages of using Airbnb rentals. For the host, there’s the risk of property damage or loss, whether intentional or not. For the guest, there have been isolated incidents of security breaches (especially at night) that are beyond control depending on the peace and order situation of an area.
Guests may not be entirely honest about their backgrounds when they close a deal with a host. However, these comprise only a minority of the total host-guest experience, and most Airbnb arrangements have been smooth and satisfying for both parties. There have been cases of fraud as well. People represent themselves as hosts but are not the real owners of the property.
These unsavory experiences and other risks may be limited by using Airbnb’s security features, such as Verified IDs, profiles, secure payment platform, and the Host Guarantee, and also by reading reviews of guests who have rented the property you are interested in. Hosts can talk to their insurance companies as to how to protect their properties from damage by guests.
Finally, hosts and guests alike should be aware of local laws that may restrict or even forbid rentals of property, especially zoning or administrative codes. For instance, some cities may require hosts to acquire permits or licenses. Guests should also be aware that they could be liable as well when they rent properties without knowing that it is illegal to do so. In some states and countries, hosts also need to pay income taxes for rentals.
good day i would like to enquire about the strategies that airbnb can use in order to protect themselves from hotels.
what ways can they maximise their revenue?
what strategies do they use to maximise occupancy?