AirBnB started in 2008, and it's a website where you can rent out your home for a short period of time. AirBnB is not a hotel. It's a platform for renting out private properties, which makes it ideal for owners who want to make extra income by temporarily renting their homes to travelers or tourists.
I used to love AirBnB and thought it might fulfil the promise of sharing economy while actually being a big boon to the hospitality industry. From the perspective of a world traveler (I have traveled over three million miles, mostly for business) I have stayed in a lot of AirBnBs with mixed experience.
While this appears nuts, (because it is) my own experience as a formerly-regular AirBnB user, it’s becoming the norm, though not always in such egregious amounts. Years ago, renting out your place as an AirBnB was a free-for-all; today local regulations as to fees you need to charge and days per month/year you’re allowed to rent have dramatically complicated things.
While some cities have made an exception to their regulations for AirBnB, New York City has not. The main issue is that AirBnb is in direct competition with hotels and other lodging establishments, which are heavily taxed and regulated by City Hall. If you're considering renting out your property through AirBnB, it's important to know that there are additional costs involved; many homeowners end up paying thousands of dollars just in taxes per year.
Today, there is no doubt that AirBnB can be expensive. It's not uncommon to find your room choice in a major city costing more than staying at an average hotel. The most expensive AirBnBs I've seen were over $200 per night, while my cheapest hotel stay was only $75 per night. If you are looking for a bargain on accommodations, then AirBnB might not be the best option for you today even if it might have been on the past.
Part of the issue with AirBnB today, at least from my experience and research, is a dramatic change in the profile of who owns the AirBnbs we stay in. In the old days (for me, my AirBnB golden age was 2010-2013, when I was traveling 300K+ miles a year and usually staying in AirBnBs) the vast majority of owners were actual people looking to rent out their place and make some extra money. That profit, of course, drove in more individual and corporate speculators. In other words, big companies that set up multiple AirBnBs as full-time properties invest a lot of capital into acquiring and maintaining these properties and, obviously, expect a really nice return on their investment.
From the consumer perspective, AirBnB is definitely a buyer-beware issue today. As is the case with any travel service, what you don’t know might actually be designed to hurt you.
Krenar Camili, a New Jersey lawyer, points out an important legal aspect for us to consider:
“Any time we are asked to enter into a contract for travel services, we need to read the terms closely. AirBnB and other sharing economy services have made this more important, but the same holds true even if you’re booking a hotel or a flight. Can you cancel? When? What are the penalties involved? These companies will sometimes try to make the terms difficult to find. You should always remember that when the price looks too good, there’s probably a reason for that.”
Part of the problem with AirBnB is an emotional one. Lots of people, me included, have nice memories from our history of staying in AirBnBs. I’ve talked to a lot of people over the years who have had their most luxurious stays in Airbnbs with amazing hosts who all made them feel right at home and even helped them avoid eating out every night or spending money on taxis by letting them borrow their bikes or cars when needed.
But for many people, these good ol’ days of using the sharing economy to get better things for less money are long gone. Perhaps nothing illustrates this today better than trying to rent an AirBnB and get the kind of deal we used to find. While we can all long for bygone days, they aren't coming back.
About Aron Solomon
A Pulitzer Prize-nominated writer, Aron Solomon, JD, is the Chief Legal Analyst for Esquire Digital and 24-7 Abogados. He has taught entrepreneurship at McGill University and the University of Pennsylvania, and was elected to Fastcase 50, recognizing the top 50 legal innovators in the world. Aron has been featured in Forbes, CBS News, CNBC, USA Today, ESPN, TechCrunch, The Hill, BuzzFeed, Fortune, Venture Beat, The Independent, Fortune China, Yahoo!, ABA Journal, Law.com, The Boston Globe, NewsBreak, and many other leading publications.