Open Letter to the Airbnb Community About Building a 21st Century Company
press.atairbnb.com
press.atairbnb.com
With Airbnb, you really have no idea what you're going to get until you get there. The platform skews heavily in favor of hosts, and most listings I see have stricter cancellation policies than your average hotel and zero recourse if the host decides they want to cancel on you last minute.
I don't know why you would be embarrassed to admit that. I prefer hotels as well. I also don't think there is any connection that working in tech means you are automatically prefer Airbnb.
I agree with all of the reasons you listed. And when you add in all the fees now I think hotels are actually more compelling now. Problem with your room? You generally get a new room just by picking up the phone.
There's also something that no one talks about this short term sublets is that the hosts' neighbors are the ones who have to deal with most of the annoyance of having a new tenet every week or so.
Likewise, Cabs are much cheaper and faster to grab than Ubers in my NYC neighborhood (east village). Don't believe the hype...
Everything in the world could be solved by fixing how people act, but obviously the world doesn't work that way so societies resort to other means.
Hotels are a more consistent experience and there is a baseline of quality and service that you can rely on. Refunds or room exchanges are easier when there are problems (the AirBnB resolution process is stressful when there is the potential for conflict with the host), plus you get charged when you checkout, not having to pay the full amount in advance when you book.
Had a really bad experience with AirBnB where PUD showed up to shut off the power to the place we were staying with no notice that left us scrambling.
I really don't get this kind of opinion, just because it is so binary. Hotels are great when you need to quickly check-in and check-out, although the experience vary grandly and they can get pretty bad and pretty expensive.
On the other hand if I want to feel "at home", if I want something cheaper, if I want a kitchen and if I want something well located. Airbnb is always the answer.
There's something really impersonal about staying in a hotel that you don't get with an Airbnb (although some airbnbs are pretty bad as well).
I remember almost all the airbnbs I've stayed at. I usually forget about how a hotel room looks a few days after checking out. Try to think about this, you'll be surprised ;)
Also, in cities, I'm not sure I even want to spend enough time in wherever I'm staying to have a memorable experience. The city is the experience, not the place I'm staying. Not that I hang around where I'm staying most places but definitely not in cities. Or if I do, it's because I'm working :-/
Really? How "at home" can you feel when you are in a total stranger's home?
>"If I want something cheaper, ..."
This is certainly not always the case.
>"if I want something well located."
Right, because all hotels are always in some completely undesirable part of town, far away from anything and everything.
>"Airbnb is always the answer."
No, it is not.
Have you tried it? I've heard that argument before but I do feel "at home" when I'm travelling and airbnb'ing. When you're coming back to a hotel after a dinner or a night drinking it just doesn't have this feeling. As I said I still remember the Airbnbs I've been to just because I felt like I "lived" there for a while.
> This is certainly not always the case.
It is constantly the case in my experience. I've airbnb'ed in France, HongKong, Japan, the US, the UK, China, Switzerland, Spain, Portugal, ...
> Right, because all hotels are always in some completely undesirable part of town, far away from anything and everything.
For the same price, yes.
> No, it is not.
I'll still recommend you to give it one more try!
Yes I've stayed at people's houses whom I didn't know very well. I don't think paying for the experience would have made me feel any more "at home."
>"When you're coming back to a hotel after a dinner or a night drinking it just doesn't have this feeling."
Exactly but it has the feeling of "wow someone came in and cleaned, there's fresh towels, toiletries, water and the bed is made." And I don't have worry about playing games with reviewing people or being reviewed.
Lots of people just go home when they want to feel at home.
Say what you will but in my own anecdotic experience (I travel a lot) I do feel like I’ve lived in these cities for a bit when I airbnb there. And I still remember all these airbnbs even after many years.
Your credential signaling - "I travel a lot" adds no weight at all. I too travel, most of the year and have been around the world more than a few times at this point in my life. Living like a local is about many things - establishing friendships and relationships with people that live there, its about establishing a routine, its about having life experiences there. But it most certainly has nothing to do with staying in a hotel vs staying in an Airbnb.
Well I'm glad I did then, because I truly feel at home when I stay in an Airbnb, and I don't feel at home when I'm staying in a hotel.
Of course living in a city is about more than just having a home, but it gives you that feeling, for a bit.
> "I travel a lot" adds no weight at all
Of course it adds weight. I have the actual experience of living in different cities (and different continents) and I've been staying at airbnbs and hotels enough to understand the difference. Now again, these are just my personal anecdotal experiences, but saying that it is absurd is absurd. You can't objectively think that living in someone's "home" is not more homely that staying in a hotel.
It is almost always a worse experience than a hotel. Also hotels get screwed on taxes in a way airbnb doesn't.
But I’ve found that Airbnb is great when traveling in a small group — hanging out in a home with communal rooms is awesome.
He must be a damn good exec who was recruited left and right during his 37 years at Amex and, now that he's retired, he's going to mentor the top execs at the top companies [2]. Exciting development for both Airbnb and Facebook.
[1] https://www.recode.net/2018/1/18/16905386/facebook-ken-chena...
[2] https://www.nytimes.com/2017/10/18/business/american-express...
This is the dinosaur who will transform Airbnb into an "infinite" 21st-century company??
Here's the ridiculous story of how Ken Chenault's old-school ways cost Amex their Costco relationship and chopped their customer base by 10%.
https://www.bloomberg.com/features/2015-how-amex-lost-costco...
The Costco guys were tickled by how meticulously Amex choreographed Chenault's movements.
Ken Chenault would have an advance team come to our office before he visited. They planned everything — where he would enter the building, the route to the boardroom, where he’d sit at the table.
Soon after the breakup with Costco, JetBlue ditched Amex for Barclays and MasterCard. Fidelity may also be thinking about canceling its affinity card.
I love AirBnb and I hate being negative about Brian's post but I stopped reading there. Perhaps this is AirBnb's reality but it certainly isn't the reality for 99.999% of other companies, who aren't dwelling in unicorn land. Companies don't think finite because it's fun, but because they have to. Because there are bills and salaries to pay and shareholders to satisfy. Because there are people who expect a return on their investment in a finite time, because their lives are finite and because their kids will grow up a finite time before they enter college.
Don't get me wrong, as a founder there's not much I despise more than short-term thinking, but if a strategy can't work within a time frame of, say, a couple years it's kinda worthless. It's hard enough to plan and predict 2 years into the future and god knows what's 5 years from today. Why be concerned with infinity?
1. AirBnb is a global market place. It’s much more difficult to build a global market place and its much easier to defend your moat once you are a global marketplace. Travelers from all over the world want to visit all over the world. There is a chicken and egg problem when you start. This benefit applies to Uber to much lesser degree because they are a city level market place. Most riders ride in their home city majority of their time.
2. Repeat business between travelers and hosts are much lesser compared to other gig economies. While people might get tempted to cut a direct deal with their cleaner or dog walker after a few good experiences, it’s much less likely to happen with AirBnb. Same benefits applies to Uber.
There wasn't a very good company to do all this through in anything like a consolidated way before. There were some vacation rental companies but none were very good. My parents rented out their vacation home in Mexico for many years and would absolutely have used AirBnB had it existed at the time.
How about you tell me how Airbnb is contributing to vacancies in crowded real estate markets? Or what you are doing about cities introducing regulations that will make Airbnb essentially the same as a hotel? Why are condos starting to ban Airbnb rentals?
It kind of feels like Airbnb knows they are on shaky ground and this memo is step 1 of reinventing themselves to prevent their collapse.
The regulation question is a real issue for AirBNB and I agree that they ought to be telling their shareholders and their hosts what their plan is.
In NYC, you can rent a room out as AirBnb if either of the following:
1. the rental is long term
2. you are present in the apartment while the guest is staying
3. short term rental while owner is absent
That is when AirBnB does not help the housing market and some cities have rightfully legislated against that case.
AirBNB doesn't seem as bad as Uber, but there have been many questionable decisions .. and cases like the London guy whose guests threw a massive party and caused like 3k GBP in damages:
http://observer.com/2017/03/airbnb-nda-damage-in-london-afte...
No where in this letters were the words, "We've made some mistakes" or "we need to get better" ... unless I missed it? It's like they're not even addressing serious customer issues.
Uber was much more problematic in terms of culture (at least until recently, if you're inclined to be generous) and they seem to have been more directly involved in actively thwarting laws, etc. And they've created this big gig economy workforce that is barely scraping by in most cases. On the other hand, with relatively few exceptions, existing taxi companies--and especially those built around medallion monopolies--were extremely user-friendly and generally pretty awful in a lot of places.
AirBnB, on the other hand, seems at least more reasonable as a company but has still turned largely a blind eye to its hosts evading their legal requirements in a way that's arguably much more damaging to communities than Uber.
You are choosing one person over the other. More people are serviced through this mechanic. A lot more. You can argue that you want more long term tenants than short term tenants in a city, but thats a preference. In absolute value, having more units available for Airbnb service more people and more value, otherwise it wouldnt be profitable to do so.
This is also a consequence of onerous legal responsibilities on long term leases. SF city government has to get their shit together for building more housing, not blaming that Airbnb is harming its constituents. (because it is, as visitors are not constituents of the city)
I don't see why this is necessarily bad. If short-term renters provide better value to the owners, why should they be deprived of this opportunity?
Maybe if the government just wants to have a Disneyland with rich apartment owners who rent everything out and zero long-term residents, they'd go along with AirBNB, but then these people wouldn't be in government, they'd work as resort managers. And they'd be voted out of office and be replaced with people from the community who actually care about said community. Also, tourists go to a city to experience its vibe, it'd be kinda interesting if they go somewhere and all they see are other tourists.
This dichotomy bleeds over into arguments about welfare state, supply-side economics vs high upper income taxes, etc. You can argue that people should be able to create value and earn however possible, but I'm going to disagree with that view. I think regulation and limits are appropriate in some cases, this being one of them.
The regulation question is huge. Airbnb can't survive thousands of cities implementing different kinds of regulations.
Because their business actively contributes to these shortages, and the associated human suffering... While evading hospitality taxes.
> AirBNB is, if anything, helping this problem in many cases by allowing people to compensate for the expense of living in a crowded real estate market by renting out rooms
That's a minority use case. More commonly, landlords take rentals off the market, to let out on AirBnB.
NIMBY regulators are the ONLY significant contributor to long term shortages in affordable housing. In other words, the local voters are the ones responsible for their own pain.
There is no single lever that you can turn, and solve the housing problems of Seattle, Portland, San Francisco, Philadelphia, or NYC.
Blaming voters for this situation is like saying that the 2008 financial crisis happened because of voters. Technically correct (We could have - in theory - elected someone who could have appointed someone who could have appointed someone who could have stopped that particular disaster), but not in any meaningful sense.
The developers who provide overwhelming amounts of funding for political campaigns are generally the ones trying to build new housing. So they're the opposition to the NIMBYs, they're your friends in this case.
>razor-thin profit margins on non-luxury condos
If the profit margins are razor thin, then there's probably an over-supply.
>setbacks
lolwut?
>foreign millionaires, local millionaires
The best way to fight them is to allow supply to increase at a rate to meet the market demands such that buying property and leaving it empty is a bad idea. Or at least isn't harmful to others who will still be able to find supply.
>rent control
This is again, something the local voters have done to themselves.
>parking requirements
If you build a new condo or whatever that has no parking you're probably going to go broke because no one will want to purchase your condos.
>inadequate transit, low land taxes, demand for school districts
Luckily we'll be building a bunch of new expensive properties who will be paying new higher taxes. Or better yet, we'll have AirBnB places that pay the same taxes, and bring in tourists who will pay sales taxes, etc. but won't be using most of that infrastructure like public schools.
>the average homeowner having most of their wealth locked in a single illiquid asset,
This is not something that stops new development, unles those average homeowners are the NIMBYs.
>limited capital gains taxes on property appreciation.
This certainly isn't something that stops new development. In fact, it should encourage it.
>There is no single lever that you can turn, and solve the housing problems of Seattle, Portland, San Francisco, Philadelphia, or NYC.
Sure, there's no SINGLE lever, but the biggest lever that will have the most impact is to let the market decide what kind of housing and how much to provide.
I get what he's going for here, but this phrasing just sounds too TED-talk-y for me. I also don't get what they'd change as a result, but I guess that's TBD.
“Where every city is a village, every block a community, and every kitchen table a conversation. ”
Didn’t he get the memo that many people explicitly want to be in cities for the very reason that they are disturbed by the social dynamics of villages (everyone knows everyone and is involved in everyone’s business)?
I love Airbnb but I would hate if every city becomes a village.
Also, this talk about building an infinite company. I’d argue that in the current public debate about tech’s power, this actually can sound a bit threatening.
As he mentions in the letter, they are friends. I’m sure he’s knee deep in most of Sineks’ philosophy on orginzations and products.
"I'll never forget that time my advisor told me to institutionalize my intentions to minimize conflicts," he said, wiping a single tear from his eye.
If you really want to build community and meet people, you should try Couch Surfers. It's part of the real sharing economy, not the bullshit sharing economy.
If by "they" you mean NIMBY regulators who won't allow more housing to be built, then we agree. This is not AirBnB's fault or responsibility.
But more to the point, this was the original comment I'm responding to:
>They need to address the issues around people leaving flats empty after people leave and turning them into permanent AirBNBs instead of renting out room to people who actually live there.
If the NIMBYs weren't allowed to have a strangle-hold on supply, then it wouldn't be a problem for the wider market if some property owners turn their units into AirBnBs.
[1]: https://www.bloomberg.com/news/articles/2016-07-11/airbnb-fa...
Really makes me admire guys like Buffett who manage to build long-term empires without the need to write manifestos like this.
Pick one.
Up next, the merger of WeWork and AirBnB?
AKA, the gov't.
That's why I've built CryptoCribs (https://www.cryptocribs.com) to enable repeat users to share their homes without paying a middleman
That is how you bamboozle all the rubes into buying your worthless garbage. If it sounds all high tech and futuristic, it has to be awesome, right? See also: Ethereum and all it's weird futuristic terminology like "gas" and stuff...